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Below are Views On Oil & Base metals regain lost ground By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Oil & Base metals regain lost ground

Oil and industrial metals rose in yesterday’s session as global investors took advantage of low prices.

Gold                                                             

On Monday, Spot Gold ended higher by 1.37 percent to close at $1805.2 per ounce. Spot gold prices rose above the 1800 level as retreating US Dollar and fading hopes of early tapering of the monetary policy by US boosted appeal for the bullion metals.

Widening impact of the pandemic reduced bets on the US Federal Reserve withdrawing the economic support which will be supportive for the yellow metal.

However, markets might remain cautious ahead of the key US economic data scheduled during the week for cues on FED’s stance in the months ahead.

Gold prices remained under pressure last week after the minutes of the US FED policy meet held in July’21 hinted towards a tighter economic policy in the coming months which clouded the outlook for the yellow metal.

Expectation of delay in tapering by the US Federal Reserve might continue to levy some support for Gold prices.

Crude Oil

On Monday, WTI Crude rose over 5.3 percent to close at $65.6 per barrel. Oil prices regained some of the lost ground after the massive losses in the week gone by as investors took advantage of low prices.

However, demand worries for Oil persist as escalating worries over the wide spread of the delta variant led to increased restrictions across border affecting global supplies as well as demand.

WTI Crude prices plunged over 7 percent last week as surge in the number of infected cases leading to renewed restrictions in major Oil consuming economies like Japan, US, China undermined the demand prospects for Crude.

Optimism over revival in Oil demand following the approval to the Pfizer Inc/BioNTech SE COVID-19 vaccine by U.S. drug regulator is expected to support Oil prices.

However, worries over widespread of the Delta variant of the Covid19 virus might keep the prices in check.

Base Metals

Most Industrial metals on the LME as well as the MCX ended higher as investors took advantage of the low prices after the recent fall. Also, a weaker US Currency made the Dollar priced industrial metals more attractive for other currency holders.

Lowering bets on tapering of the expansionary policy by the US Central bank in wake of the new variant of Covid19 virus further supported the base metals complex.

As per reports from the International Lead and Zinc Study Group (ILZSG), the global Zinc markets witnessed a deficit of 20,200 in June’21 down from a deficit of 23,500 reported in May’21.

Copper

LME Copper ended higher by 2.6 percent to close at $9273.5 per tonne as investors were out for bargain hunting following the significant loss last week.

Moreover, expectation of increased global demand for industrial metals with the shift towards a low carbon environment supported market sentiments.

Easing worries over early withdrawal of the stimulus measures by US Central bank might continue to support industrial metals.

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