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Below are Views On Commodity Article 14th December 2021 By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel One Ltd 

Gold

On Monday, Spot Gold ended the higher by 0.25 percent to close at $1786.9 per ounce as investors remained cautious ahead of the outcome of the US Federal Reserve meet scheduled during the week.

The US Central Bank policymakers are scheduled to meet on 14th & 15th of December’21. Markets will have a keen eye on the US FED policy meet for cues over the timeline of tapering the expansionary policy.

Gold remained under pressure in the earlier week as better than expected US CPI data and increasing restrictions across borders in wake of the new Omicron virus boosted appeal for the Dollar making the Dollar priced commodities less desirable for other currency holders.

Also, drop in the number of US unemployment claims in the earlier week signaled towards an improving labor market which boosted markets risk appetite denting appeal for the safe haven, Gold. Markets kept a keen eye on the developments in the US economy in order to anticipate the Federal Reserve's interest-rate hike timeline.

Gold prices might remain steady as markets will keep an eye on the 2-day US Federal Reserve meet.

Crude Oil

On Monday, WTI Crude prices ended lower by 0.53 percent to close at $71.3 per barrel. Oil prices remained afloat after reports from OPEC also started that the impact of the new variant of the covid19 virus would not be have a severe impact on the global Oil demand.

The gains for Crude were capped following lower than expected withdrawal in the US Crude inventories and a stronger US Dollar. As per reports from the US Energy Information Administration, crude inventories were reported lower by 0.2 million barrels in the earlier week while the markets expected a fall of 1.5 million barrels.

Moreover, disruptions in major Oil consuming nation China following the debt crisis in their property sector further pressured market sentiments.

Improving demand outlook for Crude as worries over the new Omicron coronavirus variant's eased might continue to support Oil prices in the week ahead.

Markets assessing the impact of the Omicron virus on global Oil demand amid bets over an hawkish approach by the US FED might weigh on Oil prices higher.

Base Metals

Most Base metals on the MCX traded higher on Monday despite of a stronger US Dollar as China's pledge to increase infrastructure investment next year supported market sentiments.

China’s Industrial production and investment data due this week is expected to throw some light on the demand prospects in the largest metal consuming nation.

Also, China’s central bank vowing to cut the reserves requirement for Banks in an attempt to support economic growth and Base metals demand.

A stronger U.S. currency makes dollar-denominated metals more expensive for holders of other currencies, which hampers demand.

A meeting of the U.S. Federal Reserve this week could further boost the dollar if the central bank decides to take a more hawkish approach.

Increasing Zinc and Copper inventories amid a stronger Dollar ahead of the outcome of the US Central bank meet might keep investors cautious.

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