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

Chances of sub-optimal coronavirus relief aid from the U.S. dented the Gold and Crude Oil prices. China’s increased industrial activities also weighed down gold. The resumption in U.S.’s Oil production activities increased the supply while bleak demand continued to weigh down Crude Oil prices. Base Metals ended in the green due to increased demand on account of China’s increased exports and robust industrial activities.

Gold

Gold declined by 0.4% and closed at $1921.9 per ounce. The chances of a smaller stimulus aid by the U.S. dented the yellow metal’s prices.

President Trump demanded a limited coronavirus relief bill that clouded the outlook for the safe haven, Gold – which is used as a hedge against inflation and currency debasement. However, White House officials and the Democrats continued to try and bridge the gap and to work out an agreement on a comprehensive bill. 

A rapid expansion in China’s economy in September’20 reflected improved overseas demand and balanced recovery. This boosted the risk appetite among investors while pressurizing the Gold prices.

Moreover, uncertainty over additional coronavirus relief aid and an appreciating Dollar might weigh down the Gold prices.

Crude Oil

WTI Crude went down by 2.8% and closed at $39.4 per barrel as U.S. Oil production activities resumed. Furthermore, chances of a smaller corona relief bill by the U.S. weighed down oil prices.

Hurricane Delta that risked the energy production in the U.S. Gulf of Mexico eased over the weekend further denting the oil prices.

Resumption of Libya’s largest Sharara Oilfield after the force majeure was lifted is expected to increase the global oil supply. However, bleak demand prospects continue to be a considerable headwind.

The resurgence of the COVID-19 cases and increased worries over the reinforcement of lockdown in the world’s significant economies further dented the Crude Oil prices.

Base Metals

Base Metals on the LME ended in the green amid increased demand. A balanced recovery in China overshadowed global worries and underpinned the industrial metals.

A robust increase in China’s industrial activities in September’20 reflected development in the overseas demand and stimulus-driven infrastructural growth which uplifted the base metal prices.

China’s exports rose for the fourth consecutive month as more and more economies resumed activities post the pandemic. However, possibilities of a smaller stimulus aid by the U.S. and an alarming increase in the coronavirus cases clouded the outlook for industrial metals.

Copper

LME Copper ended lower by 0.38% and closed at $6737.5 per tonne amid appreciating U.S. Dollar. The hopes over smaller stimulus aid by the U.S. further weighed down the red metal prices. 

A rapid increase in China’s industrial activities might levy some support to industrial metals.

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