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Below are Views On Stronger Dollar and revival in markets risk appetite might lead to the second consecutive weekly loss for Gold. By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Revival in the US Dollar weigh on Commodities

Appreciating US Currency weighed on the Dollar priced commodities. Also, worries over widespread of new delta variant covid19 virusclouded the demand outlook for Crude.

Gold

On Thursday, Spot gold ended marginally higher by 0.05 percent to close at $1752.4 per ounce as an uptick in the US Dollar and the treasury yields pressured on the bullion metal.

However, slow growth in US consumer prices eased worries over early tapering of the expansionary policy by the US Central Bank which kept Gold prices elevated. As per the Labor Department, US Consumer prices rose by 0.5 percent in July’21 after increasing by 0.9 percent June’21.

Also, widening impact of the new Delta COVID-19 variant across borders continued to undermine market sentiments in turn limiting the fall in the safe haven, Gold.

Investors also kept a keen watch on U.S. President Joe Biden's $3.5 trillion budget proposals which headed towards the final passage, the House of Representatives

Stronger Dollar and revival in markets risk appetite might lead to the second consecutive weekly loss for Gold.

Crude Oil

On Thursday, WTI Crude ended lower by 0.23 percent to close at $69.1 per barrel after the International Energy Agency (IEA) voiced worries over recovery in the global oil demand in wake of the Delta variant of the Covid19 virus.

Renewed restrictions in many nations following the wide spread of the new variant of the virus ignited worries of slowdown in the demand for Oil in the months ahead.

Moreover, US prompting the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to increase Oil output further pressured Oil prices.

WTI Crude prices found some support earlier in the week as strong US economic numbers and increasing gasoline consumption supported market sentiments.

Also, a lower-than-expected fall in US Crude inventories further weighed on Oil prices. As per reports from the U.S. Energy Information Administration, Crude inventories dipped by 447,000 barrels in the week ending on 6th August’21 against the markets expectation of a decrease of 1.3 million barrel.

A gloomy outlook for the global Oil market reflecting the wide spread of the new delta variant of covid19 virus might continue to weigh on Oil prices.

Base Metals

On Thursday, most Industrial metals on the LME traded lower as strengthening of the US Currency weighed on the Dollar priced industrial metals.

However, lowering expectations of sooner than expected tapering by the US Central Bank following slow growth in US inflation data levied some support for the base metals complex.

Also, optimism infused by the US infrastructure bill underpinned the demand outlook for industrial metals. The US senate passed President Joe Biden's $1.2 trillion infrastructure plan earlier this week taking the bill towards the final passage, the House of Representatives.

Nickel prices rose on Thursday as decreasing Chinese output raised potential supply worries. China’s refined Nickel production in the first seven months of 2021 came up to 91,723 tonnes, down 15.7 percent (yoy) whereas Nickel inventories on the Shanghai exchange are reportedly down over 80 percent in comparison to the same period last year.

Copper

On Thursday, Copper prices ended lower by 0.5 percent to close at $9467.5 per tonne as appreciating Dollar undermined the red metal prices.

Lowering bets on early tapering by the US Federal Reserve and a disrupted supply chain might continue to support the base metals complex. However, a stronger US Currency is expected to limit the gains for the entire pack.

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