Better than expected manufacturing data from China has given hope of a faster recovery in the International economy, having a positive impact on the prices of crude oil and base metals, while affecting gold prices negatively. In the coming days, commodities prices will depend on the recovery that the Chinese economy registers from the impact of Coronavirus.
Here’s how different commodities performed on March 31st.
Gold
China’s better than expected economic data and the hope of recovery of the world’s second-largest economy pulled down spot gold prices on Tuesday. The price of gold plunged over 3 percent to close at $1571.7 per ounce. Moreover, appreciating U.S. dollar made the yellow metal expensive for other currency holders and further pressurized gold prices. China’s industrial sector PMI surged to 52 in March 2020 from a record low of 35.7 in February 2020.
However, lockdown in the rest of the world to counter the Coronavirus pandemic kept the markets cautious and limited the downfall in gold prices.
Robust stimulus infusion by the U.S. Federal Reserves and other major central banks to fight the outbreak of the lethal virus continued to boost the appeal for the bullion metal in the world markets. In the coming days, appreciating US dollar and upbeat economic data from China might dent the appeal for the safe-haven asset, and push the prices lower.
Silver:
On Tuesday, Spot silver prices ended higher by 0.59 percent to close at $14.5 per ounce whereas the MCX silver ended lower by 1.04 percent to close at Rs.40,894.0 per kg.
Crude Oil:
The talks between the US and Russian presidents to stabilize the crude oil prices in the international market had a positive effect on the WTI crude prices on Tuesday, which ended higher by 1.94 percent to close at $20.5 per barrel. In March, crude oil prices had crashed on the worries of global lockdown lasting for months.
Multiple nations have announced a lockdown in an attempt to counter the deadly virus which has led to the curtailment of aviation and road transport, coupled with a halt in the industrial activities. This has proved to be a major factor in bringing down crude prices. The OPEC+ deal collapsed earlier in March, triggering the race for the greater market share between major oil producers, Russia and Saudi Arabia.
Outlook concerns of oversupply in the global markets coupled with the expectation of a surge in U.S. Crude inventory levels might continue to weigh on the prices.
Base Metals:
Positive manufacturing data in China led to a rise in the prices of base metal on the LME on Tuesday. China’s manufacturing sector PMI soared to 52 in March’20 after falling to a record low of 35.7 in February’20. A sudden surge in the factory data figures eased down the market concerns and improved the demand prospects for industrial metals. Appreciating the US dollar made the industrial metals expensive for other currency holders which limited the uptrend in prices. However, the protracted lockout witnessed around the globe in an attempt to stop the rapidly spreading Coronavirus led to a halt in industrial activities in a lot of nations that weighed on the base metal prices.
Halt in auto production in Europe and the U.S. amid tumbling car sales witnessed by the Chinese economy signaled that the impact of the Coronavirus pandemic might be much severe and hamper the demand prospects for industrial metals.
Copper:
On Tuesday, LME Copper prices ended higher by 0.44 percent to close at $4769.5 per tonne as the closure of multiple mines coupled with robust factory data posted by China supported the red metal prices.
