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Below are Views On Spot Gold ended the week lower by 0.4 percent as a stronger Dollar and bets on some early tapering By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Appreciating Dollar amid widening impact of the virus continues to weighs on commodities

Widening impact of the new variant of covid19 virus dragged oil and industrial metals lower whereas a stronger Dollar continues to hamper commodity prices.

Gold

Spot Gold ended the week lower by 0.4 percent as a stronger Dollar and bets on some early tapering by the US Federal Reserve undermined appeal for the bullion metals.

The minutes of the US FED policy meet held in July’21 hinted towards a tighter economic policy in the coming months which clouded the outlook for Gold.

Also, increasing appeal for the US Currency as a safe haven following the wide spread of the pandemic made the Dollar priced Gold less attractive for other currency holders.

Gold might find some support in the week ahead as renewed pandemic led restrictions in many nations ignited worries of further slowdown in the global economic recovery. However, any signs of tapering by the US Central bank might weigh on Gold prices.

 Appreciating US Dollar might outpace worries over of slowdown in the global economic recovery and continues pressure Gold prices.

Crude Oil

WTI Crude prices plunged over 7 percent in the week gone by ahead of a gloomy outlook. Surge in the number of infected cases leading to renewed restrictions in major Oil consuming economies like Japan, US, China undermined the demand prospects for Crude.

Also, appreciating US Currency made the Dollar denominated Oil more expensive for other currency holders pushing the prices lower.

Even the larger than expected withdrawal in the US Crude inventories in the earlier week failed to support Oil prices. As per the US Energy Information Administration – EIA, Crude inventories fell over 3.2 million barrels in the week ending on 13th August’21; however, gasoline stocks rose modestly in the similar time frame.

Oil might find some support as global investors might take advantage of the low Oil prices. However, appreciating US Dollar coupled with worries over recovery in the global oil demand in wake of the Delta variant of the Covid19 virus might keep the prices in check.

Base Metals

Industrial metals on the LME as well as the MCX ended lower in the week gone as appreciating US Dollar, widening impact of the new Covid19 variant cases and slow growth in China’s economy weighed down the prices.

High raw material cost and supply constraints reflecting the fresh round of energy usage limitations took a hit on China’s industrial activities in July’21 adding to the downside in base metal prices. That, coupled with falling loan growth in China continued to hamper market sentiments. In July’21, China's new bank loans fell more than expected while broad credit growth plunged to a 17-month low which raised expectation of some policy easing to support the country's economic recovery.

However, US FED officials hinting towards tapering of the expansionary policy and mounting demand concerns overshadowed the optimism over the possible easing of the policy by China and continued to push prices lower.

Copper

LME Copper ended lower by 4.3 percent as the recent slowdown in China’s economy and rising COVID-19 cases weighed on market sentiments.

Expectations that US FED might clampdown its expansionary policy and mounting demand woes might continue to pressure industrial metal prices in the week ahead.

Industrial metals might find some support after the significant losses last week; however, slow growth in China and signs of tighter monetary policy by US FED is expected to keep prices in check.

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