Hopes over possible coronavirus vaccine support Gold, Crude, and Base Metal prices

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

Hopes over coronavirus vaccine by Pfizer Inc. after successful trials and no safety concerns supported gold, base metals, and crude oil prices. The commodities’ prices were further supported as the global central banks came back in action to fight for the economic revival of countries to the pre-pandemic level.

Gold

Spot Gold ended higher by 0.8% and closed at $1876.5 per ounce amid hopes over additional stimulus aid by the global central banks, which boosted the yellow metal’s appeal.

Central banks are expected to continue helping economies revive to the pre-pandemic level, which helped the safe-haven Gold gain grounds.

An alarming increase in the COVID-19 cases in the U.S. and Europe further supported the yellow metal prices. 

Expectations of the COVID-19 vaccine from Pfizer Inc. infused optimism among investors, which dented the gold prices earlier. Successful trials of the vaccine, and no safety concerns raised hopes of getting a vaccine against coronavirus among the market players.

Expectations of further stimulus aid by the global central banks to fight the war against coronavirus might further support the Gold prices. Gold prices are expected to trade higher on MCX in today’s trading session.

Crude Oil

WTI Crude ended higher by 2.6% and closed at $41.4 per barrel amid hopes over a possible vaccine to fight against the pandemic, which further elevated market sentiments.

However, a surge in coronavirus cases, along with worries over fresh lockdown and increased oil production from Libya, kept the gains in check.

The Organization of Petroleum Exporting Countries (OPEC) and its allies are all set to put a further cut in the Oil production in January’21 by 2 million barrels per day from the current 7.7 million barrels per day.

However, aligning the oil markets and bleak demand prospects in the global oil market assessed some production scenarios changes. 

Lower Dollar amid the hopes over a possible vaccine by Pfizer Inc. elevated the Oil prices. However, increased oil production from Libya amid bleak global demand prospects might keep the prices within the check. Oil prices are expected to trade higher on MCX in today’s trading session.

Base Metals

Base metals on the LME ended in the green. Hopes over an increase in additional stimulus aid further supported the industrial metal prices.

China’s exports witnessed a significant expansion of 11% in October’20, projecting the revival of the world’s second-largest economy, which further elevated the industrial metal prices.

Furthermore, hopes over the vaccine and global central banks to provide aid against the virus weighed down the U.S. Dollar making Dollar-denominated industrial metals cheaper for other currency holders.

Copper

LME Copper ended higher by 0.23% and closed at $6932 per tonne amid a weaker Dollar and increased hopes of additional stimulus aid by the global central banks. Hopes over a possible coronavirus vaccine are likely to support the base metal prices further. Copper prices are expected to trade higher on MCX in today’s session.