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Below is quote On Gold ended marginally lower by 0.01 percent to close at $1813.4 per ounce By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd 

A dovish approach by the US Federal Reserve underpins Commodities

Revival in markets risk appetite weigh on gold whilst Oil prices plummets on over supply worries.

Gold

On Monday, Spot Gold ended marginally lower by 0.01 percent to close at $1813.4 per ounce. Revival in markets risk appetite drifted some of the investors away from the safe haven asset Gold.

Gold prices ended higher last week as the US Federal Reserve kept interest rates unchanged and didn’t give any fixed timeline on tapering of its expansionary approach in wake of the delta variant of the virus and a weaker labor market.

Markets will continue have a keen eye on the US non-farm payrolls report due later in the week for cues on the health of the labor market in the world’s largest economy.

However, a weaker US Dollar post the accommodative approach by the US FED and increasing cases of the new variants of coronavirus limited the fall in the bullion metal prices.

Strengthening of the US Dollar ahead of key US economic data due later in the week might drag Gold prices lower.

Crude Oil

On Monday, WTI Crude plunged over 3.6 percent to close at $71.3 per barrel as worries over slow growth in China’s industrial sector and increase Oil production by OPEC raised over supply worries on the global Oil market in turn undermining the prices.

Oil prices rose last week as depleting US Crude inventories and an accommodative stance by the US FED underpinned market sentiments. However, Oil prices gave up some of its gains made last week as OPEC’s plan to boost output by 400,000 barrels per day from August’21 to December’21 amid marginal expansion of China industrial sector and wide spread of the virus ignited oversupply worries in the global markets.

Also, as per Reuters survey, the OPEC groups Oil output rose to their highest levels in over a year in July 2021 which further pressured Oil prices.

However, a weaker US Dollar and bets on a sustained growth in the global Oil demand levied some support for Oil prices.

A bleak demand outlook following the slowdown in China and widespread of the new variant of the coronavirus amid increase Oil production by OPEC might continue to weigh on Oil prices.

Base Metals

Industrial metals on the LME ended mixed in yesterday’s trading session as slow growth in the manufacturing sector of major economies, US & China, clouded the demand outlook for industrial metals.

As per data from the National Bureau of Statistics (NBS), China’s official manufacturing Purchasing Manager's Index (PMI) dipped to 50.4 in July’21 from 50.9 reported in June’21. In July’21, industrial activities in China grew at the slowest pace in 17 months reflecting the dismal weather conditions, disrupted supply and high raw material costs. Also, stern environmental norms in an attempt to reduce carbon emissions might further limit China’s industrial output. Signs of slowdown in the largest metal consuming nations might be a set back of the entire base metals complex.

Copper

LME Copper ended marginally lower by 0.3 percent despite of the disrupted supply chain as bleak demand prospects arising from top metal consumer China undermined market sentiments.

After months of negotiation, the union of workers at BHP’s Escondida Mine (located in Chile), the world’s largest Copper reserve, rejected the company’s final offer on Saturday. This takes the negotiations to the next step which is government mediation, a last attempt to avoid a strike. As per reports, the talks might last for 5 to 10 days in an attempt to bridge the difference failing to which the strike would begin.

An evident slowdown in China industrial sector clouds the demand prospects in the world’s largest metal consuming nation which might continue to pressure the industrial metals.

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