By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd
Expectations of additional stimulus aid by the U.S. underpinned the yellow metal prices while granted support to the Base metal and Crude Oil prices. Reports over the speedy recovery of President Trump further dented Gold prices. Additional corona relief aid supported Crude prices while bleak demand prospects capped the gains. China’s weeklong holiday limited growth in industrial metal prices.
Gold
Spot Gold ended lower by 1.87% and closed at $1877 per ounce amid appreciating Dollar. U.S. President Donald Trump’s speedy recovery after being diagnosed with coronavirus last week too weighed down the prices of the yellow metal.
Gold is considered a hedge against inflation and currency debasement. Hence, expectations among investors regarding further stimulus aid after House Speaker Nancy Pelosi and Treasurer Secretary Steven Mnuchin made efforts to bridge the gap between both the parties’ dented Gold prices.
The rise in Gold prices was limited further by China’s robust industrial growth. China’s increased industrial activities in September’20 reflected an improvement in overseas demand boosting investors’ risk appetite.
President Trump halted negotiations over the additional stimulus bill to support the U.S. economy until the upcoming elections. This is likely to weigh down Gold prices. Gold prices are expected to trade lower on MCX in today’s session.
Crude Oil
WTI Crude ended higher by 3.7% and closed at $40.7 per barrel amid hopes of further corona relief aid by U.S. and optimism among investors after President Trump’s speedy recovery.
Hurricane Delta approached the U.S. Gulf coast, forcing many energy companies to shut down, which provided additional support to Crude prices.
Failed wage talks triggered a strike that led to the closure of six Norwegian offshore oil and gas fields. Risk in the output of 330,000 barrels as more workers joined the strike elevated Oil prices.
However, the resurgence of the COVID-19 virus and worries over the reinforcement of the second round of lockdown kept the Crude Oil prices in check. Oil prices are expected to trade sideways on MCX in today’s session.
Base Metals
Base metals ended in the green on LME after reports of President Trump’s recovery and amid rising hopes over additional stimulus aid by the U.S.
Industrial metal prices were however kept in check by worries over the second wave of COVID-19. Weak demand prospects for Oil ahead of weeklong Chinese holiday further limited the growth.
China’s industrial activities that gained momentum in September’20 reflected development in overseas demand and stimulus-driven infrastructural growth.
According to the National Bureau of Statistics report, China’s official manufacturing Purchasing Manager’s Index stood at 51.5 in September’20.
Copper
LME Copper ended marginally higher by 0.02% and closed at $6530 per tonnes amid rising COVID-19 virus and dented demand prospects for the red metal.
However, labour negotiations in Chilean mines having a combined capacity of 2.8 million tonne underpinned Copper prices. Copper prices are expected to trade lower on MCX in today’s trading session.
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