Metals and Energy decline ahead of key payrolls data
Commodity Online | August 07 2020
UPDATED 17:49:53 IST

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Precious Metals have been trading steady this morning as traders focus on the key government payrolls data which could provide further insights into the US employment situation. Spot Gold is trading at $2058.74, down 0.22% while Silver is down nearly three percent to trade at $28.194 currently. MCX Gold is trading unchanged at Rs.55839 and Silver is down 0.28% to Rs.75836 currently. The second US stimulus package continues to remain in limbo and the market is focused on the Nonfarm Payrolls data for July at 6.00 pm for which the pace of hiring is expected to have slowed down to 1.6 mln from 4.8 mln in the previous month and a weaker report may trigger another round of buying which could carry prices further higher in intraday and into next week. US-China tensions continue to increase and that should also support the bullish momentum intact with traders looking to re-enter the rally on any positive dips. Silver is also likely to benefit both from Gold’s momentum and renewed interest in the while metal due to the recent performance. We maintain a neutral view on precious metals in intraday. Gold is trading in a range of 56100-55600 and Silver is settling into a range of 77300-74900. We expect metals to be volatile in the evening session and maintain a bullish view in the short term.


WTI Crude Oil has steadied over the past few sessions after failing to break above critical level at $42 and near month futures are down about a percent at $41.61 whereas Brent is at $44.77, down 0.71% currently. Natural Gas has recovered from yesterday’s losses and is trading at $2.19, up 1.20% currently. MCX Crude Oil is trading at Rs.3110, down 1.33% while Natural Gas is higher by nearly two percent at Rs.166.50 currently. Crude oil traders are aware of the demand risks, on rising crude oil global supply amid this fragile global economy and increasing supply from OPEC+ and a weaker employment report today should weigh on prices and push them lower further into next week. Although Crude oil traders are still keeping some of their bullish bets on hopes that a new round of stimulus packages, by global central banks, and the continual weakening of the greenback would keep the price of crude oil above key support levels. We maintain a bearish view on oil prices and expect it to test Rs.3050 in intraday whereas gas prices should continue to remain bullish today.


Base Metals are trading lower today as the buying momentum seems to be fizzling out as the week draws to a close. LME Copper is down over a percent at $6413.25 while the rest of the metals are losing over half a percent each. Aluminum futures are up 0.20% currently. Base Metals seem to be steadying the upside momentum as demand worries continue to take hold. We maintain a neutral to bearish view on prices in intraday.


Sam Nair

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