Commodity slump continues as demand concerns overshadow supply risks’

While the demand outlook remains bleak, supply concerns are also picking up as restrictions hit operations.

Commodities traded largely higher on March 24 amid a relief rally triggered by correction in the US dollar index after the Fed announced fresh aggressive measures to support its economy and financial markets.

The Fed and central banks across the globe have infused huge liquidity in the last few days to minimise the economic impact of the virus outbreak. Governments are also taking fiscal measures to complement easing measures.

While governments are taking all possible measures, market players remain unconvinced as the virus outbreak remains out of control, threatening to have a severe impact on global growth and thereby demand for commodities.

Commodities traded largely higher on March 24 amid a relief rally triggered by correction in the US dollar index after the Fed announced fresh aggressive measures to support its economy and financial markets.

The Fed and central banks across the globe have infused huge liquidity in the last few days to minimise the economic impact of the virus outbreak. Governments are also taking fiscal measures to complement easing measures.

While governments are taking all possible measures, market players remain unconvinced as the virus outbreak remains out of control, threatening to have a severe impact on global growth and thereby demand for commodities. markets continue to stare at challenging times. The longer it takes to control the virus, the greater will be the demand impact, however, it is unlikely that supply may remain unaffected. In such a scenario, it is likely that we may see some stability in commodities with tighter supply.