Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd
An alarming increase in coronavirus cases in Europe and North America, along with the entire world, might continue to dent the appeal for base metals and crude oil among investors. Gold, however, attracted investors amid increased uncertainty over the new coronavirus relief bill by the U.S. before elections. Crude Oil prices dented further on account of bleak demand prospects and increased oil production.
Gold
Gold gained 0.1% during the last week on account of increased worries over the pandemic. Furthermore, uncertainty regarding the additional stimulus aid by the U.S ahead of the elections boosted appeal for the yellow metal among the investors.
U.S. Dollar weakened as House Speaker Nancy Pelosi reported advancement in talks with the White House Officials regarding the new coronavirus relief fund. However, the lack of signs of an actual agreement between both the parties kept the prices within the check.
Gold, which is considered a hedge against inflation and currency debasement, gained about 25% in 2020. The rise was on account of lower interest rates and additional liquidity infused by the global central banks.
Global coronavirus cases surpassed 41.7 million, which further boosted the appeal for the safe haven, Gold. Also, reinforcement of pandemic triggered curbs in Europe extended support to the yellow metal.
However, the lack of definitive signs of agreement over the additional coronavirus relief fund might weigh down Gold. Gold prices might trade sideways on MCX in today’s trading session.
Crude Oil
WTI Crude ended lower by 2.52% as the widening impact of the pandemic clouded the demand for Crude Oil. However, OPEC and its allies’ decision to extend production cuts limited the losses.
An alarming increase in the COVID-19 cases all across the globe, including Europe and North America, reinforced lockdown, which further pressurized the Crude prices.
There has been an increase in Libya’s Crude Output, as its largest oil field, Sharara, resumed production amid bleak demand prospects also dented the Oil prices.
According to the Energy Information Administration, U.S. Crude inventory increased by 1.9 million barrels last week signaling, weaker Oil demand.
A resurgence of the pandemic and reinforcement of lockdown might further push oil Crude prices lower. Oil prices might trade slightly lower on MCX in today’s session.
Base Metals
Most of the metals on LME ended in the green during the last week on account of China’s increased industrial activities and a lower U.S. Dollar.
China’s GDP rose about 4.9% from July’20 to September’20, which further extended support to industrial metal prices.
China’s primary Aluminum production stood at 3.16 million tonnes, which were 7.9% higher as new smelters introduced in China and increased production.
According to the International Lead and Zinc Study Group, the global market for Zinc and Lead is heading towards a possible surplus, reflecting a fall in countries outside China.
Copper
LME Copper ended higher by 1.9% during the last week amid expectations of a new stimulus deal by the U.S. Robust increase in China’s economy further supported the red metal prices.
However, an alarming increase in the COVID-19 cases and stalled talks over the new bill might weigh down industrial metals. Copper prices might trade sideways on MCX in today’s session.
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