In the course of the past two weeks, the trading on the global market went on a positive note as shown by a string of advantageous economic data curled from leading economies.
Coming back to the domestic scene, higher trading was recorded in the market as a result of foreign-funds in-flow in equities and debt markets. There is more than one percent appreciation on the Indian rupee, which is attributed to optimistic wholesale inflation data. In addition, there was a huge inflow of approximately $2.44 billion on August 20 in debt markets, which shows the highest inflow as 2009 (August precisely) produced a positive factor on the rupee. On the other hand, the demand for dollars state-operated banks on behalf of importers (as well as the dollar index’s strength) capped a steep positive movement on this currency.
And, for the main story on precious metals; spot gold recorded large negative trading due to rising global equities as well as the obvious tension relief from Ukraine and the Middle East, causing investors in bullion to lock in profits lower than $1,300 per ounce.Largely, equity markets did not heed to the news that Russia will stop an aid fleet to the eastern part of Ukraine; according to Western officials, this move may be a ploy for an invasion.
Also, the economic data released in the past two weeks revealed optimism regarding the United States economy. According to the data, U.S. housing stats bounced back significantly after two consecutive months of notable decline. On a different note, the United States consumer prices struggled to rise in the same months (July) under review.
Still on precious metals; the prices of spot silver also traded lower, which is in tune with the general weakness experienced in copper prices. Precisely, spot silver prices declined by approximately 2.6 percent two weeks ago.
Coming to crude oil; the prices of crude oil leaped by over 4 percent two weeks ago as exports from Libya bounce back regardless of the recent conflict. On the contrary, there is yet no disruption on substantial amounts of oil, even when certain drilling fields in the autonomous Kurdish region have been shut down.
And, on the production scene, there is a rise in OPEC output, above 30,000,000 bpd in July (a five-month high), while the production of crude oil in the U.S. came to an average of approximately 8.5 million barrels per day.
However, the outlook shows that both crude oil and precious metals will likely trade lower in the next two weeks to come.