Commodity Capsule: Brent crude oil steadies; Gold shrinks; Copper under pressure I Watch video

Commodity Capsule: Oil prices rose slightly on Thursday after steep losses in the prior session.

Recovery in the dollar largely offset optimism over data showing a substantial drop in US oil inventories over the past week.

EIA showed that US crude inventories shrank by over 17 million barrels in the week to July 28; the highest ever in nearly four decades. 

Increased risk aversion, after ratings agency Fitch downgraded US sovereign rating, spurred oil traders to take some profits off the table.

Both contracts were trading almost 2 per cent down this week, after five straight weeks of strong gains.

The dollar shot up this week, shrugging off the Fitch downgrade as data showed some resilience in the U.S. economy.

Stronger-than-expected private payrolls reading on Wednesday aided strength for the dollar index.

Focus is now on the meeting of the Organisation of Petroleum Exporting Countries on Friday.

Saudi Arabia is expected to extend a 1 million barrel/day supply cut into September.

Gold sinks as dollar surges on strong payrolls data

Gold prices edged lower on Thursday, nursing steep losses for the week.

Signs of a resilient US economy and job market pushed up fears of rising interest rates.

Yellow metal slid nearly $30 over the past two days, with December futures pulling further away from the key $2,000 an ounce level.

Official data showed that private payrolls grew substantially more than expected in July.

The reading boosted the dollar and ramped up concerns over a strong labor market, ahead of official nonfarm payrolls data due on Friday. 

Yellow metal saw little haven demand, even as a cut to US sovereign rating by Fitch spurred risk aversion in other financial markets.

Copper under pressure as China stimulus hopes wane

London copper extends weakness on Thursday.

Metals witnessed a sell-off in the prior session, sparked by the downgrading of the US credit rating.

Fitch on Tuesday downgraded the United States to AA+ from AAA.

Weighing on the metal market was a strong dollar, hovering four weeks high.

Copper prices fell sharply this week on waning optimism over more Chinese stimulus.

Chinese officials offered scant details on how said measures will be carried out.

China's economic data pointed to a continued decline in business activity. 

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