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Below is the  Markets to remain cautious ahead of the US FED policy meet by Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Gold 

Last week, Spot Gold ended lower by 1.6 percent as better than expected US economic figures gave strength to the US Dollar.

Strong US economic data ahead of the Federal Open Market Committee meet scheduled on September 21-22 further raised bets towards a hawkish approach by the US Central bank which dented bullion’s appeal.

However, renewed restrictions across nations following the wide spread of the pandemic and slowdown in China limited the fall in the safe haven asset Gold.

Gold is expected to remain under pressure ahead of US FED Chair Jerome Powell’s speech at the meet scheduled in the week ahead.

Uncertainties over the US central banks stance in the months ahead is expected to keep the market cautious and Gold prices steady.

Crude Oil

Last week, WTI Crude ended higher by 2.1 percent as slow resumption of supply from the U.S. Gulf of Mexico following two hurricanes amid bets over increasing global demand kept Oil prices afloat.

the International Energy Agency (IEA) expecting the demand for fuel to recover in the months ahead which supported market sentiments.

As per reports from the IEA, US Crude inventories slipped over 6.4 million barrels surpassing the market expectation of a 3.5-million-barrel drop. The withdrawal of US Crude stocks comes in line with limited supply of from the refineries in the U.S. Gulf region.

Despite expectation of revival in global demand, appreciating US Currency and China’s planning to sell its state crude oil reserves to few domestic refiners might weigh on Crude in the week ahead.

Appreciating US Dollar, slow growth in China’s economy, gradual recovery in US Oil output and widening impact of the pandemic might be a headwind for Crude prices in the week ahead.

Base Metals

Industrial metals on the LME ended mixed last week with Aluminium gaining the most amongst the pack.

Aluminium continued to trade higher cross exchanges as depleting inventories and increasing limitation on production capacities in China in an attempt to control carbon emissions ignited potential shortage fears.

In August’21, China’s Aluminium production was down for the fourth consecutive month as power usage limitations in major smelting regions took a hit on the operational activities.

Nickel found some support towards the end of last week as government officials from Indonesia, major Nickel producing nation, stated that they might impose taxes on export of Nickel.

Copper

LME Copper slipped over 1.3 percent as slow expansion in China’s factory activity in August’21 following the fresh outbreaks of the new variant of coronavirus and supply disruptions capped the gains for the entire pack.

Potential Shortage concerns might continue to underpin prices in the Aluminium and Nickel prices in the week ahead.

However, appreciating US Dollar ahead of the US Federal Reserve policy scheduled this week and China’s plans to release more metals into the market might keep the markets cautious.

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