Commodity Capsule: Gold prices edge marginally higher; base metals gain; oil prices rangebound

Commodity Capsule: Gold prices rose slightly on Wednesday, taking some support from a pullback in the dollar and Treasury yields; focus remains largely on the Jackson Hole Symposium later this week.

Yellow metal saw some relief this week as the dollar rally paused at two-month highs, while Treasury yields fell slightly after reaching over 20-year peaks.

Markets are now focused squarely on Federal Reserve Chair Jerome Powell's address at the Jackson Hole Symposium on Friday.

Analysts warned that Powell could flag an era of higher US interest rates

Any signals of higher US rates are likely to spark more losses in gold despite recovery this week, gold prices were still trading close to five-month lows.

Base metals gain, PMIs in focus

Industrial metals benefited from weakness in the dollar, with LME copper along with aluminum, and nickel surging to two-week highs.

Market sentiment was helped by a rebound in Chinese stocks due to cheap valuation and Beijing's measures to stabilise the yuan after an about 5 per cent fall against the dollar this year.

Spot markets in China saw more copper buying after prices fell for three consecutive weeks. Expectations of better demand from September onwards lifted buying.

Investors are awaiting a slew of purchasing managers’ index (PMI) readings from the US and Eurozone, due later in the day, for more cues on global manufacturing activity.

Readings from Japan and Australia showed some resilience, although the outlook remained under pressure from souring sentiment towards China.

Focus was on any more stimulus measures from China after the People’s Bank disappointed markets with a smaller-than-expected interest rate cut this week.

China is facing a slowing post-COVID economic recovery due to headwinds from weak spending and a potential property market crisis.

Oil prices rangebound as markets weigh rate hikes, China gloom

Oil prices hover in a tight range on Wednesday, as markets weighed weak demand indicators from China and the prospect of further US rate hikes against potential supply tightness.

Markets await hints on the outlook for interest rates when Federal Reserve officials and other Central banks head to Jackson Hole Symposium later this week.

Markets are frustrated as pledged stimulus in China has fallen short of expectations, including a smaller-than-expected cut in a key lending benchmark.

US crude stocks continued to fall, dropping by about 2.4 million barrels in the week ended Aug. 18-- American Petroleum Institute.

The weekly report from the Energy Information Administration is due on Wednesday.

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