BREXIT: Impact on Commodities

BREXIT is impacting overall global market and concerns are stopping markets from making gains. The commodity market is also affected because of sudden drop in equity markets and currency markets. Right now, precious metals are gaining in commodity markets. Following are the illustration on various commodities.

Precious Metals

Commodity prices have been impacted on BREXIT day. The precious metals have surged on uncertainty in the global capital markets. The gold prices have increased by 6.64 per cent and is trading at Rs 31835 on commodity exchange. Meanwhile, silver also is trading high by 3.72 per cent and is trading at Rs 42714 on MCX.

Crude

The crude oil futures are trading at 46.94 with a reduction of 6.39 per cent on June 24. The UK has about just 1.6 per cent of world oil demand, so crude should not be too affected by a BREXIT. The crude oil prices may move according to currency fluctuations in global markets. The US dollar may move upwards in short term period. Meanwhile, many research houses are predicting crude oil prices may move more than USD 65.

Aluminium, copper, zinc and other industrial metals are also being watched out on BREXIT move. The prices of these metals may hit high in near term if  US dollar strengthens.

Natural gas

The natural gas declined by 1.04 per cent on MCX and is trading at 180.2. There will be impact of BREXIT on natural gas on short term basis. The benchmark National Balancing Point contract is an important reference price for the European gas market. On BREXIT wave, the NBP contract could rise sharply, impacting other gas markets such as the Netherlands.