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Below are Views On Spot gold rose about 1.9 percent to close at $1792.6per ounce By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel One Ltd 

Potential shortage concerns underpin base metals

Gold

On Wednesday, Spot gold rose about 1.9 percent to close at $1792.6per ounce. The bullion metal edged closer to the 1800 mark in yesterday’s session as the increasing inflation worries boosted appeal shifted investors towards Gold.

US Consumer prices surged in September’21 and the prices are expected to increase more in the times ahead reflecting the recent spike in energy costs and disrupted supply which ignited potential inflation worries. Gold is considered as a hedge against inflation and currency debasement.

Also, the US Treasury yield and the Dollar eased ahead of the minutes of the US FED recent policy meet which further supported the Dollar priced Gold.

The gains for Gold were limited as the minutes of the Federal Reserve policy meet hinted towards commencement of withdrawal of the economic support by next month.

Gold might remain under pressure as the Dollar continued to firm on expectation of a tighter monetary policy by the US Central bank.

Crude Oil

On Wednesday, WTI Crude ended lower by 0.25 percent to close at $80.4 per barrel whereas MCX Crude dipped over 0.5 percent closing at Rs.6062 per barrel.

Oil prices eased after a solid rally since last week as increasing inflation worries reflecting the surge in Oil, natural gas and coal prices raised worries of slowdown in global growth and hampered sentiments.

The IMF slashed its growth forecast for major economies following worries over disrupted supply and spike in energy cost might be a setback for the global economic recovery.

The gains for Crude were capped as appreciation in the US Dollar made the Dollar denominated Oil less desirable for other currency holders.

Rising fuel demand given the recovery in economic activities amid tighter Oil supply and increasing natural gas prices might keep prices elevated.

Official US Crude inventory data will be due later in the day.

Base Metals

On Wednesday, most Industrial metals on the LME & MCX traded higher as power crisis forced many smelters to cut down production amid increasing global demand. Also, a weaker US Dollar made the Dollar denominated industrial metals cheaper for other currency holders.

Zinc prices rose over 4 percent on the LME & MCX in yesterday’s session following the power shortage in major economies which triggered supply concerns. Increasing power consumption norms in China and increasing electricity cost driven by power shortages in major economies took a hit on the smelting capacities.

However, investors should be cautious as the power issue might also impact industrial metals demand across borders.

Copper

On Wednesday, LME Copper ended higher by 2 percent to close at $9651 per tonne as a lower Dollar, potential shortage concerns and increasing Copper premium in China underpinned the red metal prices.

The gains for Copper were limited as in september’21 China’s Copper imports rose (month on month) as shipments held up by coronavirus pandemic curbs arrived in the country. In the first nine months of 2021, China's copper imports stood at 4.1 million tonnes, down 19.5% year-on-year. Increase in China’s Copper purchases countered worries of tightening supplies and depleting inventories across exchanges.

Power Crisis amid growing global demand might support industrial metal prices in todays session.

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