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

Increased worried regarding the new coronavirus relief bill from the U.S. dented the Gold and Crude Oil prices. Growing demand for Oil from China might extend support to Crude Oil prices. Base metals ended mixed on account of increased demand for the industrial metals from the world’s largest consumer, China.


Gold prices ended lower by 1.6% as the strengthening of the U.S. Dollar dented the appeal for Dollar-denominated Gold, making it less attractive among other currency holders.

The Dollar rallied after U.S. Treasury Secretary Steve Mnuchin expressed chances of a deal over the new coronavirus relief fund not happening before November’20.

Chinese economy continued to expand rapidly in September’20 further pressurizing the yellow metal’s prices. China’s increased industrial activities projected improvement in the overseas demand and a boost in investors’ risk appetite.

However, the International Monetary Fund expressed concerns over the outlook of many emerging markets amid an alarming increase in the virus cases, which in turn limited the losses for the safe haven, Gold.

A hope over additional corona relief fund from the U.S. before the upcoming presidential elections is likely to support Gold. 

Crude Oil

WTI Crude ended marginally lower by 0.7% amid appreciating Dollar and widening impact of the pandemic, which further pressurized the Oil prices.

The resumption in Libya’s largest Sharara Oil fields after the force majeure was lifted increased worries over the global supply of Oil while bleak demand prospects continued to be a headwind.

OPEC projected a weaker recovery in demand for Crude Oil due to the destruction caused by the pandemic.

China’s Crude Oil imports increased by 17.5% and stood at 11.8 million barrels per day in September’20 as some of the cargoes finally cleared customs. The growing demand for Crude for the world’s top Oil consumer limited the losses.

U.S. Energy Information Administration reported a decline of 3.8 million barrels in the U.S. Oil inventory, which further supported the Crude prices. Furthermore, expectations of a new corona relief bill from the U.S. are likely to support Crude prices. 

Base Metals

LME Base metals ended mixed with Nickel being the highest gainer. China’s improved economy supported the industrial metals while a stronger U.S Dollar made the metals expensive for other currency holders.

International Nickel Study Group projected increased demand for Nickel to 2.52 million tonnes in 2021 compared to 2.32 million tonnes in 2020. Moreover, increasing demand for stainless steel and the fast-growing Electric Vehicle segment is expected to support the demand for industrial metals.


LME Copper ended lower by 0.2% amid an alarming increase in the coronavirus cases across the globe. Strengthening of the U.S. Dollar further dented the red metal’s prices. 

Robust increase in China’s demand for metals and increased hopes over a new coronavirus relief bill might keep the industrial metal prices elevated.

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