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Mr. Prathamesh Mallya AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Weak U.S. Dollar supported the spot gold and base metal prices. Expectations of an additional stimulus aid by the U.S. further supported the prices of the yellow and the industrial metals. Crude oil prices were however dented by a rise in COVID-19 cases and bleak demand prospects across the globe. 

Gold

Spot Gold ended higher by 0.90% and closed at $1897.70 per ounce amid a weaker Dollar. Yellow metal prices were further supported by hopes of additional stimulus aid by the U.S. 

U.S. Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi worked on bridging the gap. This further raised the hopes of an additional stimulus aid by the U.S. for economic revival post the pandemic, which supported the Gold prices.

Furthermore, the losses in the Gold prices were limited by the rising number of COVID-19 cases across the globe. 

Political uncertainty that lies ahead of the first presidential debate between the U.S. President Donald Trump and his Democratic rival Joe Biden continues to keep the market under caution. This is likely to keep the Gold prices steady.

Crude Oil

WTI Crude ended lower by 3.23% and closed at $39.3 per barrel amid the widening impact of the pandemic. Bleak demand prospects for the Crude in the pandemic led market has further weighed down the Crude prices.

A resurgence of the new COVID-19 cases across the globe has dented the global Oil market. Increased worries over the reinforcement of lockdown in major economies further undermined the outlook for Crude Oil.

Libya and Iran increased their Oil exports despite the production cuts imposed by the OPEC further weighing down the prices for the liquid gold.

However, hopes of additional stimulus infusion by the U.S. limited the fall in the Crude Oil prices. 

Base Metals

Base Metals on the LME ended positive amid weaker Dollar. Further hopes of stimulus infusion by the U.S. elevated the prices for the industrial metals. The outlook for the industrial metals was however dampened by worries over the second wave of the pandemic in various economies.

Base metal prices recovered after recovery in China’s economy and massive stimulus infusion. However, the prices were kept in check on account of the lack of signs of long-term recovery.

Global Nickel market surplus was dragged down to 8,900 tonnes in July’20 from 14,700 tonnes as reported by the International Nickel Study Group.

Copper

LME Copper ended lower by 0.41% and closed at $6572.0 per tonne amid declining U.S. Dollar and a robust recovery in China. Gains in copper were further capped by a sudden rise in the LME inventory.

Growing demand from China and hopes over additional stimulus infusion by the U.S. might support the industrial metal prices.

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