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Bullion Outlook

• Gold prices rose 2% on Wednesday as the dollar and US Treasury yields retreated, with investors’ focus on minutes from the Federal Reserve’s latest policy meeting for confirmation of its tapering strategy

• Gold initially pared gains as benchmark US 10-year Treasury yields rose above 1.6% following data showing US consumer prices increased solidly in September and were poised for a further rise in coming months. However, a subsequent pullback in yields, which reduced the opportunity cost of holding noninterest bearing gold, drove a strong rally in precious metals

• Gold and silver prices are likely to trade with a positive bias as a slide in the dollar and worries that high inflation would hit global economic growth are likely to support bullion as a hedge against inflation

Base Metal Outlook

• Zinc prices jumped more than 5% after Nyrstar said it will cut production by up to 50% at its three European zinc smelters because of soaring electricity costs

• Electricity prices have reached record highs in recent weeks, driven by power shortages in Asia and Europe, with China’s crisis expected to last through to the end of the year and crimp growth in the world’s second-largest economy

• China’s copper imports in September snapped a run of five monthon-month declines, customs data showed, as shipments held up in ports of the world’s biggest user of the metal became available after Coronavirus curbs were eased

• Base metal prices are expected to trade with a positive bias as power shortages in China and Europe have raised supply concerns

Energy Outlook

• Oil prices were flat on Wednesday after erasing earlier losses as surging fuel costs for power generation offset expectations that demand growth will fall as a result of major economies being under strain from inflation and supply chain issues

• US crude oil output is expected to fall more than expected previously in 2021 and bounce back in 2022, according to a monthly government report released on Wednesday

• US natural gas production will rise in 2021 after falling last year due to Coronavirus demand destruction, the US Energy Information Administration (EIA) said in its Short Term Energy Outlook

• Crude oil prices are expected to trade with a positive bias as coal and natural gas shortages are leading to oil products being used as a substitute

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