Due to the Russia-Ukraine crisis, natural gas prices have seen a record high. Whereas gold and silver are trading under pressure. Brent’s prices have remained at a high for 7 years in a row and yesterday the price of Brent had even crossed $ 91. WTI crude is also looking above $87 for the third day. Crude is seen above Rs 6500 on MCX. Crude has risen on fears of supply falling. OPEC+ will meet on February 2. Now the question is whether the crude will be worth $100. Crude prices remain at 7-year high. On January 27, Brent made a high of $91.04. Brent prices have been climbing for 6 consecutive weeks. Brent is up over 24% in 2 months. The price of WTI is above $87 for the third consecutive day. WTI opened above $87.30 for the first time in January. On January 27, WTI touched a level of $ 88.54. Crude is above Rs 6500 on MCX for the second consecutive day. Crude on MCX has gained more than 31% in 2 months.
Why did the crude fire?
Fears of a fall in supply have led to a rise in prices. OPEC+ has produced below target in December. Rising tensions between Russia-Ukraine could lead to a fall in production. The Middle East crisis has also led to a rise in crude prices. OPEC+ countries will meet on 2 February. OPEC+ will hold this meeting on increasing production in March. Investors are eyeing the outcome of the meeting. Demand is expected to pick up even as prices rise.
Natural gas prices rise
March futures of natural gas are up 10%. On the other hand, February futures are up 46%. Its prices have climbed up to a record 72% in intra-day. The Russia-Ukraine crisis has pushed up prices. Cold weather is expected to continue in the US in February. The demand for natural gas has increased in Europe and Asia. Its price is expected to increase by more than 25% in 2022.
gold and silver came under pressure
Gold has come down to $1800. At the same time, silver has come down to $ 23. The tough stand of the FED has put pressure on them. The price has also fallen due to the strengthening of the dollar. Gold on COMEX has come down to a low of 16 days. Gold has come down to 48000 on MCX. Gold on MCX has seen a decline for the second consecutive day. Gold rate on MCX is lowest in 11 days. Gold prices on MCX have fallen by about 2% in 2 days. Silver prices are below $23 on COMEX. Silver price on MCX is below Rs.62000. Silver price on COMEX and MCX is below 2 weeks.
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Why did the decline occur?
FED’s tough stance has led to the fall in prices. US FED may raise rates in March. A strong dollar has also put pressure on gold. Dollar is at 1.5 year high. Prices have also fallen faster than US bond yields. Bond yields have hit a nearly 2-year high. Lower hedging against inflation has also put pressure on gold.
WGC on demand for gold
WGC says that the demand for gold in India will pick up. Gold consumption will increase further in 2022. The demand for gold had grown by 79% in 2021. The WGC says that the year 2022 will be better than the year 2021. Retail sales of gold increased in 2021. Gold demand in 2022 is expected to be the highest in 6 years. If we look at the consumption of gold in the country, 797.3 tonnes of gold was consumed in the country in 2021. It is expected to remain at 800-850 tonnes in 2022.
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