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Below are Views On Commodities scale higher after massive losses in the past week By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Commodities scale higher after massive losses in the past week.

Worries over widespread of new delta variant covid19 virus levied some support for Gold while boost in markets risk appetite underpinned Oil and Industrial metal prices.

Gold

On Tuesday, Spot gold ended marginally lower by 0.04 percent to close at $1728.7 per ounce. The bullion metal scaled higher earlier in the session as mounting concerns over the widespread of the new Delta COVID-19 variant continued to undermine market sentiments.

Threats over further slowdown in the global economic recovery as many nations impose fresh curbs following the surge in infected cases helped Gold put a pause to the recent fall in prices.

However, expectation of a tighter economic policy and hike in the interest rates following the robust economic figures and hawkish comments by US FED officials supported the US Treasury yield and the Dollar which pulled the non-interest bearing Gold lower.

Renewed restrictions due to the fast-spreading Delta variant of coronavirus might continue to support Gold prices. However, investors are expected to remain cautious ahead of the key US economic data scheduled later in the week.

Crude Oil

On Tuesday, WTI Crude ended higher by 2.72 percent to close at $70.2 per barrel as investors took advantage of the low Oil prices after the recent fall.

Also, strong US economic numbers and increasing gasoline consumption supported market sentiments which further levied some support for Oil prices.

However, a stronger Dollar, mounting worries over bleak demand from China and widespread of the Delta variant of the Covid19 virus continued to keep the prices in check.

Oil remained under pressure in the earlier sessions as dismal trade data from China in July’21 and renewed restriction in major Oil consuming nations clouded the outlook for the global Oil market.

Optimism infused by the robust US economic number might overshadow the virus woes and continue to support Oil prices. Officials US Crude inventory data due later in day.

Base Metals

On Tuesday, Industrial metals on the LME traded higher ahead of the key Chinese economic data scheduled in the coming days. However, bets on a sooner than expected tapering of the expansionary approach by the US FED limited the gains for base metals.

Fresh round of energy consumption norms imposed by southern China's Guangxi region (prime Aluminium producing region) further hampered the already disrupted supply chain. These restrictions come inline with the similar energy consumption norms imposed in the earlier months in the Yunan province. That, coupled with the recent floods in China’s major industrial regions pointed towards a potential shortage of Aluminium in the global markets which eased pandemic worries and supported Aluminium prices.

Copper

On Tuesday, LME Copper prices ended higher by 1.6 percent at $9520.5 per tonnes whereas MCX Copper price were up by 1.2 percent to close at Rs.734 per kg following worries over disrupted supply.

BHP’S Escondida mine, world’s largest Copper deposit & Andina copper mine (operated by state-owned Codelco) located in Chile have rejected the respective company’s offers igniting worries over a potential strike. That, coupled with the labor union at JX Nippon Copper's Caserones mine walking off the job on 10th August’21 after the workers and the company fail to bridge the gaps despite government mediation.

Boost in markets risk appetite and a disrupted supply chain might continue to support the base metals complex in the days ahead.

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