Commodities: Recovery continues from the Brexit induced sell-off – ANZ

Research Team at ANZ, notes that a weaker USD amidst a broader risk-on tone saw commodities push higher.

Key Quotes

“Oil led the gains, supported by another large decline in US inventories. EIA data show stocks fell 4.05 million barrels last week to 526.6 million barrels. Crude oil production in the US also fell, down 55,000 barrels to 8.62 mb/d. Industrial metals also rose, with expectations of more accommodative monetary policies improving investor sentiment.

Despite the risk-on tone, gold continued to push higher. While the safe haven buying has abated as the shock over Brexit subsides, investors are now focused on the Fed. With expectations of a rate hike diminishing by the day, investor demand is remaining strong. Holdings in gold backed ETFs rose 5.62 tonnes to 1940.3 tonnes as of Tuesday.”