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GOLD

After gold prices witnessed a strong start to the week, prices on Wednesday come under pressure, as the yellow metal slipped 0.60 percent to end the day at 1715.8$ per ounce.

A bounce in the dollar index which was on a continuous decline since the all-time highs hit in the previous week coupled with a rise in the US treasury yields maintained pressure on gold prices.

The upside remained capped given the upbeat economic numbers released, as the US non-manufacturing PMI rating came in slightly higher than expected, indicating that the economy is still strong despite rising interest rates.

Outlook: We expect gold to trade lower towards 51220 levels, a break of which could prompt the price to move lower to 50910 levels.

CRUDE

Crude prices continue to remain elevated, as on Wednesday, both the benchmark crude indices help their gains to end on a higher note. The Brent ends with gains of 0.65 percent, whereas, NYMEX ends with 1.43.

OPEC+ agreed to its largest production cuts since 2020 COVID, despite a tight market and opposition to cuts from the United States and others. The increase in oil prices took it to three-week highs.

Oil prices have fallen to approximately $90 from $120 three months ago due to concerns of a worldwide economic slowdown, rising U.S. interest rates, and a stronger dollar. The 2 million barrel per day (bpd) cut from OPEC+ could spur a recovery in oil prices.

Meanwhile, the Russian Prime Minister said that the government may reduce oil production in order to counteract the negative impact of price caps imposed by the West due to Moscow's actions in Ukraine.

Outlook: Improving demand from China and cutback in production by OPEC would keep the oil prices underpinned.

BASE METALS

Base metals ended Wednesday's session on a mixed note, with Copper and Zinc ending on a lower note on the LME, whereas on the MCX, except for Copper, the rest all the metals ended on a positive note.

After reaching their highest level in two weeks, copper prices began to drop as the dollar appeared to be moving higher. The likelihood of further interest rate increases will keep the demand for metals in check. In response to smelter closures and high energy prices, other metals like zinc and lead rose.

Following Glencore's announcement that it would put its Nordenham zinc smelter in Germany on care and maintenance as of November 1st.

Energy-intensive aluminum and zinc smelters in Europe have been forced to halt or suspend operations due to rising electricity rates.

Outlook: Given the optimism from China and the production reductions at the smelters, which would constrain production together with the falling inventory in the warehouses, base metal prices are expected to remain elevated.

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