IGI Logo

Below are Views On Gold ended lower by 0.4 percent to close at $1767.9 per ounce By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Gold

On Wednesday, Spot Gold ended lower by 0.4 percent to close at $1767.9 per ounce. Spot gold prices remained under pressure after the US Central bank indicated towards sooner than expected tightening of the expansionary policy.

Federal Reserve Chair Jerome Powell hinted towards a sooner than expected hike in the interest rate followed by tapering of the bond purchase program which might begin by November’21.

Hawkish signals by US FED Chair gave strength to the Dollar which weighed on the Dollar priced commodities like Gold. A increase in interest rate will increase the opportunity cost of holding the non interest bearing bullion

Gold also felt some pressure after worries over the impact of China’s property developer Evergrande's debt crisis on the global economy eased after the group said it would pay some bond interest due.

While US FED kept the policy unchanged, hints towards a hawkish approach in the months ahead might weigh on Gold prices.

Crude Oil

On Wednesday, WTI Crude gained about 2.4 percent to close at $72.2 per barrel as tighter supply worries and depleting US Crude inventories outpaced the global uncertainties and underpinned Oil prices.

As per reports from the Energy Information Administration, US Crude inventories dipped by 3.5 million barrels in the week ending on 17th September’21, surpassing the market expectation of a 3.3 million barrel drop. Gradual resumption in the US refining activities after the two hurricanes which the US gulf coast led to the withdrawal in US Crude stocks.

Also, reports stating that some of the Oil producing units in the Gulf of Mexico are expected to remain offline until the end of this year due to damage from Hurricane Ida further hinted towards a tighter Oil supply from US.

Sooner than expected tapering of the expansionary policy by US Central bank might weigh on Oil prices. However, tighter supplies and depleting US Crude stocks is expected to levy some support.

Base Metals

On Wednesday, most industrial metals on the LME and MCX ended higher after worries over Evergrande debt crisis eased. The Chinese property developer Evergrande Group stated that it would make interest repayments on its domestic-issued bond on the due dates.

The People's Bank of China infusing more liquidity into the banking system in an attempt to avoid a credit crunch further supported market sentiments.

However, hawkish comments by US Federal Reserve Chair Jerome Powell at the two day policy meet supported the US Dollar which capped the gains for the Dollar priced industrial metals.

Copper

On Wednesday, LME Copper ended higher by 3.5 percent to close at $9286 per tonne as easing worries over default by Chinese property developer and boost in liquidity by China’s central bank underpinned Base metal prices.

Easing worries over Evergrande Crisis and worries of potential Shortage in the global markets might support industrial metal prices. However, indications of a tighter policy by US FED in the months ahead is expected to put some pressure on the base metals complex.

Above views are of the author and not of the website kindly read disclaimer