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Below is Commodities Wrap Up and Outlook By Mr. Yash Sawant, Research Associate, Angel One

Inflation worries keep Gold afloat in the week gone 

Gold

Spot Gold gained over 1 percent as escalating inflation woes kept the bullion metals elevated during the week.

Upbeat US Consumer prices in October’21 signaled towards rising inflation levels which gave strength to Gold as it is widely considered as a hedge against inflation.

An accommodative approach by global central banks and mounting Inflation concerns has created a supportive environment for the safe haven asset, Gold.

Gold gave up some of times gains towards the end of the week as Increasing prices levels ignited worries over a sooner than expected interest rate hike by the US Central Bank which shifted investors towards the US Dollar.

Increasing prices levels might continue to support the safe haven asset Gold in the week ahead. However, a stronger Dollar might keep prices in check.

Crude Oil

WTI Crude slipped lower by 2 percent in the week gone by as build up in US Crude inventories and rise in inflation levels outpaced optimism over boost in global demand and pushed prices lower.

As per reports from the Energy Information Administration, US Crude stocks increased by 1 million barrels in the week ending on 5th November’21.

Crude prices were further pressured as the Organization of the Petroleum Exporting Countries (OPEC) slashed the demand projections for Oil in the last quarter of 2021 reflecting high prices.

A stronger US Dollar following bets over increase in interest rate might undermine the Dollar priced Oil in the week ahead.

Reports stating that the US is planning to release oil from the U.S. Strategic Petroleum Reserve to cool prices amid a stronger Dollar might weigh on Oil prices.

Base Metals

Industrial metal prices found some support towards the end of the week after China’s Evergrande Group paid a long overdue interest to its bondholders which supported market sentiments.

Also, limited supply from China and depleting inventories across exchanges continued to hint towards a tight supply market which further supported Base metal prices.

Industrial metals on MCX remained under pressure earlier in the week as the Evergrande property crisis, stern energy usage limitations and the recent spike in power prices hampered the economic recovery in China, the largest metal consuming economy.

Appreciating US Dollar following bets over an early interest rate hike and slow growth in China’s economy might continue to weigh on Base metals complex in the week ahead.

Copper

Last week, MCX Copper dipped over 0.4 percent in line with the international market as slow growth in China’s economy kept the red metal prices under pressure.

Increasing bets over a hike in interest rates might weigh on the industrial metals complex.

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