Economic growth worries may keep commodity prices under pressure

Economic growth worries may keep commodity prices under pressure

Key events in the coming week include manufacturing and services PMI from China, US consumer confidence, and non-farm payrolls report





May 29, 2022 / 02:24 PM IST





Commodities



Ravindra Rao, VP - Head Commodity Research at Kotak Securities

Just a week after commodities showed some signs of life, they have turned directionless as market players counter continued weakness in the US dollar against increasing growth concerns.

Gold retreated after testing two week high and is hovering near $1850 level; industrial metals have largely weakened while crude oil has gained but remains well below recent highs.

The trend in other asset classes also showed increasing uncertainty. Safe havens like US bond, Japanese yen and Swiss franc continued to rise while equities witnessed a mixed trend. US Dow Jones Industrial Average index recovered from March 2021 lows hit a week ago while Chinese equities are set to end little changed but are well off the lows.

The US dollar index slumped to a one month low amid lower bond yields, some disappointing US economic data, and reduced safe haven buying. Increasing debate about the US Fed’s monetary tightening stance has also caused market players to move out of the dollar.

Fed minutes