~ Copper slipped slightly last week after months-long positive run, while potential to recover today remains ~
Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd
With the whole grappling with rising COVID-19 numbers and lockdowns in major global economies, the base metals market is showing signs of weakened demand, thereby trading at lower prices.
However, hopes over recent COVID-19 vaccine trials and the news of over 90% effectiveness have had a positive impact on gold prices, not to mention the promise of a Coronavirus stimulus package from the U.S. Fed as well as the new administration from January 2021. Barring gold and crude oil, the other commodities is lower price trading is still being considered stable, owing to their performance in the previous weeks.
Gold
Gold futures on MCX have done well over the weekend, trading over the INR 50,000 mark, close to INR 50,300 / 10 grams of gold, following lower trading at INR 49,551, owing to dollar’s edging slightly lesser. It is also being attributed to the positive news coming out from the Biotech firms that are conducting vaccine trials, alongside news of discussions of a U.S. monetary relief for coronavirus. Even President-elect Joe Biden signs of more efforts in tackling the pandemic have given the yellow metal a cheer to perform better at the start of the new week.
The continued post-Diwali gold frenzy domestically has impacted the Gold prices further. Even Gold spot prices are not far behind, being pegged at INR 50,199. Today morning contracts were trading at around INR 50,400, 0.24% higher. However, the prices are expected to fluctuate marginally in domestic markets.On MCX, Gold prices are expected to trade sideways.
Crude Oil
While no changes in Spot Crude were observed, keeping the price at INR 3,124 per barrel, it has shown a positive trajectory amid a weakening dollar. The prospects are bullish, as the prices have witnessed a 2.05% increase, currently pegged at INR 3,193 per barrel.
Once again, similar reasons are being given for the upward trend i.e. the expectation that OPEC+ countries’ will keep an eye on the output in the coming months, with hope that the November meeting will fetch results leading to production cuts in the next 3 to 6 months. Globally, Brent crude traded 0.4% higher at $45.13 per barrel, while WTI crude rose 0.1% at $42.46 per barrel.
Moreover, fresh vaccine hopes are aiding the good performance, even though several countries continue to enforce restrictions on movement due to rising COVID-19 cases. In addition to this, U.S. healthcare institutions and firms like Pfizer expect the vaccine related regulation could come into passing by the end the year. Following approvals, the people will be inoculated with the vaccines, which is giving additional hope to crude oil producers and investors.
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