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Below are Views On Oil trades higher whilst Gold prices remain steady By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Oil trades higher whilst Gold prices remain steady.

 A larger than expected withdrawal of US Crude inventories and a weaker Dollar underpinned Oil prices whereas Gold remained steady ahead of the key US employment data.

Gold

On Thursday, Spot Gold ended marginally lower by 0.2 percent to close at $1809.4 per ounce. Gold continued to hover above the 1800 level as the Dollar remained under pressure ahead of the U.S. non-farm payrolls data for the month of August’21.

US Central bank keeping the policy unchanged despite of the increasing expectation of a tighter policy supported Gold prices earlier this week. However, the US FED Chair Jerome Powell stated that there might be some tapering of the bond purchases later this year which limited the gains for Gold.

Moreover, rising Crude prices and bets over a steady recovery in the US labor market further pressured the bullion metal.

Markets should expect some volatility ahead of the key US employment data which could indicate towards the US Central Banks approach in the months ahead.

The US Central bank announcing to keep the interest rates low, signs of slowdown in China’s economy, mounting geopolitical tension and the recent outbreaks of the new variant of Covid19 virus pushed Gold towards weekly gains.

Gold prices are expected to remain under pressure ahead of the key US economic data for hints on US Federal Reserve’s approach in the days ahead.

Crude Oil

On Thursday, WTI Crude rose over 2 percent to close at $70.0 per barrel. Crude Oil traded higher as optimism over recovery in global demand and a weaker Dollar over shadowed worries of low demand from US Oil refineries and supported prices.

Also, a larger than expected withdrawal in US crude inventories further supported prices. As per reports from the Energy Information Administration, US Oil stocks dipped over 7.2 million barrel surpassing the market expectation of 2.5 million barrels drop.

Oil prices were pressured earlier in the week as OPEC and its allies vowed to continue releasing Oil as planned (adding 400,000 barrels per day (bpd) each month to the market) despite of the global uncertainties weighed on market sentiments.

Mounting pandemic worriesand slowdown in China amid OPEC’s plan to boost output might continue to weigh on the market sentiments.

Base Metals

On Thursday, most Industrial metals on the LME ended higher as expectation of recovery in global demand and a softer Dollar under pinned the base metals prices.

Signs of slowdown in China’s industrial sector in August’21 weighed on the industrial metal prices in the earlier sessions. China's Caixin Manufacturing Purchasing Managers Index slid into contraction (below the 50 level) in August’21.

Covid-19 led restrictions, increasing energy usage limitations and high raw material prices took a hit on China’s industrial sector. However, China’s official manufacturing Purchasing Manager's Index (PMI) came down to 50.1 in August’21, data as per the National Bureau of Statistics. Signs of slowdown in the world’s largest metal consuming economy pressured the base metal prices.

Data as per the Antaike showed that China has cut around more than 2 million tonnes of annual aluminium producing capacity with more to come in the times ahead. Disrupted supply from top producer China continued to support Aluminium prices in 2021.

Copper

On Thursday, LME Copper ended higher by 0.44 percent to close at $9376.5 per tonne. Despite worries over slowdown in China’s economy and easing supply threats, Copper prices remained elevated as a weaker US Currency made the Dollar priced base metals cheaper for other currency holder.

Slower than expected growth in China’s industrial sector is expected to continue pressure the entire pack.

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