AfricaPress-Tanzania: THE prices of most of commodities in the world market rose in the year ending May as a result of various factors.
A significant increase was observed on prices of crude oil, from around 20 US dollars per barrel in April this year to 30.38 US dollars per barrel in May this year.
The increase was driven by demand, owing to expectations on re-opening of economies and lifting of travel restrictions in many countries.
Oil prices are forecasted to moderately increase if OPEC and other producing allies maintain the stance of production cut.
The price of gold rose to 1,715.91 US dollars per troy ounce from 1,683.17 US dollars per troy ounce, and 1,591.93 US dollars per troy ounce in April this year and March this year, respectively, owing to the continued investors’ preference for gold as a safe haven.
On annual basis, prices of all commodities decreased, except for Arabica coffee, cotton and gold.
Gold price rose because of uncertainty caused by coronavirus and US-China trade tensions, which gave gold a reputation of a good hedge.
The price is expected to further rise to as high as 1,772.1 US dollars per troy ounce, which was recorded in September 2011.
The price of oil declined significantly due to the low demand following the outbreak of coronavirus.
On Tuesday last week, gold prices eased to 1,817.90 US dollars, intraday low of 1,815.92 US dollars.
Even so, the bullion remains near the highest levels since September 2011, 1,820.61 US dollars, marked the previous day.
While tracking the reasons, US dollar weakness becomes the key concern amid the present risk-on mood. US dollar index prints a three-day losing streak while declining 0.10 per cent to 95.70.
The greenback gauge versus the major currencies recently slumped to the lowest since the early-March as market’s risk-on sentiment kept the USD bulls out of the party.
While increasing odds of the Covid-19 vaccine and receding pandemic numbers from the US could be cited as risk-positive catalysts, hopes of further stimulus from Europe and America play their roles as the key factors.
The European policymakers are finally close to 750 billion Euros of stimulus during the fifth day of negotiations.
On the other hand, the US Senators are also rolling up their sleeves to haggle over the Republican-led 1.0 trillion US dollars aid package for which Democrats put a bid at 3.00 trillion US dollars, as per the Axios
