Oil, gold, and silver futures rose Tuesday, as did iron ore as risk worries eased in commodity markets.
Oil prices rose 3% in volatile trading on Tuesday as Wall Street surged and the International Energy Agency (IEA) increased its oil demand forecast for 2020, but worries continued about a second wave of coronavirus cases in the US and China (which imported a record amount of oil in May).
Brent crude futures ended the session up $US1.24, or 3.1%, at $US40.96 a barrel in Europe while in New York, US West Texas Intermediate crude (WTI) rose $1.26, or 3.4% to settle at $US38.38 a barrel.
A record increase in May retail sales revived hopes of a rapid economic recovery, with sentiment also lifted by UK data showing reduced COVID-19 death rates in a trial of a generic steroid drug – but that was only for patients with severe breathing problems requiring the use of ventilators not for all sufferers of COVID-19.
In its monthly report, the IEA forecast oil demand at 91.7 million barrels a day (BPD) this year, up, 500,000 BPD from its May estimate.
The agency said the rise was due to higher than expected consumption during coronavirus lockdowns and the upturn in China and the record imports last month.
But the IEA warned that the collapse in global aviation meant reduced airline demand would depress global consumption until well into 2022.
Comex Gold futures settled higher on Tuesday, finding support after the testimony from Fed chair Jerome Powell who said that despite some upbeat U.S. economic data, uncertainty continues to surround the timing of a recovery.
Powell acknowledged that some economic indicators have pointed to a stabilization in activity and others have suggested “a modest rebound,” but “significant uncertainty remains about the timing and strength of the recovery.”
He said the Fed was committed to using its full range of tools to assure the recovery from the recession will be as robust as possible.
Comex August gold rose $US9.30, or 0.5%, to settle at $US1,736.50 an ounce – the first a gain in three sessions.
Marketwatch.com noted that Comex gold futures have been trading in a $US1,670 to $US1,770 range for about two months despite a sharp fall in the US dollar against major currencies in that time.
Other metals finished higher on Comex, with the exception of copper. July copper fell 0.1% to $US2.5645 a pound. July silver however added 25 cents, or nearly 1.5%, to settle at $US17.652 an ounce.
Seaborne iron ore prices rose on Tuesday, according to the Metal Bulletin because of a fall in shipments from Australia and Brazil.
The price of 62% Fe iron ore fines delivered to northern China rose more than 1% to $US104.85 a tonne.
