Gold, silver and oil see weak price action

Highlights:

• ENERGY:
  Brent crude oil futures gained 1.29%, or 93 cents, while WTI crude futures increased by 1.27%, or 86 cents. Still a poor week for oil prices.
  Natural gas futures  settled Thursday at $4.140, losing 1.8 cents. 
• METALS:
  Spot gold slipped by 0.3% to $1,799.20 per ounce.
  The Future of Silver is currently trading at $25,200.
  Copper  hiked by 0.8% at $9,566 a tonne.
• AGRICULTURAL:
  Corn futures added 1 cent to $5.54 per bushel in a volatile session.
  Soybeans futures advanced by 5 cents at $13.33-1/2 per bushel.

Oil had the worst week since March despite increases

Crude oil prices climbed on Friday but were still on track to close the week with their most significant drop since March.

Brent crude futures gained 1.29%, or 93 cents, at $72.21 a barrel, and WTI crude futures increased by 1.27%, or 86 cents, to $69.97 a barrel. However, both contracts have lost 6% this week.

According to Howie Lee, an economist at OCBC Bank of Singapore, the Delta variant is having an impact now, and many markets experience risk aversion, not just oil.

Japan is preparing to expand emergency restrictions to more areas. Meanwhile, China, the world’s second-largest oil consumer, imposed restrictions on some cities and cancelled flights. This could affect oil demand as the end of the summer travel season approaches.

However, oil prices were supported by growing tensions between Israel and Iran.

Natural gas leaked due to weather forecasts

The natural gas markets slipped at the beginning of the session on Thursday but then recovered and showed signs of strength. 

The US Energy Information Administration reported that the country’s natural gas inventories grew by 13 billion cubic feet for the week that ended July 30 against market expectations of a 21 Bcf rise.

The government storage data supported gas prices. However, sentiment changed when weather models showed that the upcoming heat was a little less intense.

Nymex gas futures contract for September delivery settled Thursday at $4.140, losing 1.8 cents. October futures slipped by 1.5 cents to $4.148.

Spot gas prices mainly remained in positive territory. However, a few locations, mainly in the West, fell into the red. NGI’s Spot Gas National Average tumbled by 2.5 cents to $4.145.

Investors are still giving a lot of importance to the heat reaching the western part of the United States. This should keep the demand for natural gas increasing. 

Corn prices are volatile ahead of USDA report

Corn experienced a choppy trading session on CBOT since the market awaits updated estimates for demand and supply from USDA next week. Corn contracts for December delivery last traded with an increase of 1 cent at $5.54 per bushel. 

Dry weather boosts soybeans 

Dry conditions in the US Midwest have supported soybeans. Besides, there have been signs of an uptick in demand. According to USDA, private exporters reported a sale of 131,000 tonnes of soybeans to China. However, the forecast for rain during the weekend and early in the next week limited the gains. 

Soybeans futures contracts for November delivery advanced by 5 cents at $13.33-1/2 per bushel.

Gold fell off 13% compared to last year

Spot gold slipped by 0.3% to $1,799.20 per ounce by 0844 GMT and was on course for its worst week since mid-June. US gold futures shrank by 0.4% to $1,801.10.

The gold price has fallen 13% from the historical maximum that it marked a year ago. Analysts attribute a decrease to the drop in consumption in China and the outlook for interest rate hikes.

The metal reached a record price of $2,075 per ounce on August 7, 2020, encouraged by investors’ doubts about the economic recovery.

Central banks already consider a rise in interest rates that has made gold less attractive this year.

Regarding price forecasts, some analysts believe that gold will once again reach $2,000 per ounce in the medium term, as the jewellery sector foresees growing demand in 2021.

Sriram Iyer, a senior research analyst at Reliance Securities, stated that US Fed officials’ hawkish comments have affected g. The number of Americans filing new claims for unemployment benefits declined further last week. At the same time, layoffs dropped to their lowest level in just over 21 years.