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Below are Views On Spot Gold ended higher by 0.6 percent to close at $1804.3 per ounce By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Retreating US Dollar supports Gold whilst wide spread of the pandemic clouded the demand outlook for Oil and Base metals.

Gold

On Tuesday, Spot Gold ended higher by 0.6 percent to close at $1804.3 per ounce. Spot gold edged above the $1800 mark as the US currency eased, making the Dollar priced Gold more desirable for other currency holders.

Slower than expected growth in the US Consumer prices clouded the prospects of tapering of the asset purchase program by the US Federal Reserve which weighed on the US Dollar.

Also, renewed restrictions across nations following the wide spread of the pandemic and slowdown in China limited the fall in the safe haven asset Gold.

Gold remained under pressure last week as the US Federal Reserve officials stated that the year-end plans to trim the asset purchase program are still online despite the slow growth in the US labor market which gave strength to the US Currency.

Markets will have a keen watch on the upcoming Federal Open Market Committee meet scheduled on September 21-22 for cues on US Central Banks stance in the coming months.

The US Dollar and the bond yields remained under pressure reflecting the weaker than expected US inflation data which is expected to support Gold in today’s session.

Crude Oil

On Tuesday, WTI Crude ended marginally higher by 0.01 percent to close at $70.5 per barrel as mounting worries over disrupted supply from US amid prospects of increasing fuel demand keep prices afloat.

Soon after the Ida Hurricane, another storm (Nicholas) headed towards the US Gulf of Mexico further threating the supply of Oil from US. As on Monday, over 40 percent of the US Gulf’s Oil and gas production remained offline after 2 weeks of the hurricane Ida hit the US Gulf Coast.

Also, the International Energy Agency (IEA) expecting the demand for fuel to recover in the months ahead further supported market sentiments.

However, China releasing its Crude reserves and widening impact of the pandemic kept a lid on Oil prices. China’s plans to sell its state crude oil reserves to few domestic refiners in an attempt to ease prices for manufacturers.

Bets over recovery in Oil demand in the months ahead and American Petroleum Institute figures showing a larger than expected withdrawal from the US Crude stocks is expected to support Oil prices.

Official US Crude inventory data due later today.

Base Metals

On Tuesday, Industrial metals on the LME ended lower as the wide spread of the delta variant of the covid19 virus in China undermined the demand outlook for industrial metals.

However, slower than expected growth in US Consumer prices raised bets on a delay by the US on withdrawing the economic support which limited the fall in the Industrial metal prices.

Nickel and Aluminium prices rose earlier in the week on fears of potential supply shortage. Increasing restriction on the production capacities in China (largest Aluminium producer) amid expectation of higher needs for Industrial metals underpinned prices.

Also, aluminium prices have surged in the past few weeks as along with the disrupted supply from China, a rapid increase in Alumina prices and depleting inventories across exchanges.

Copper

On Tuesday, LME Copper ended lower by 1.26 percent to close at $9442 per tonne as easing supply worries amid bleak demand prospects from China continued to pressure the red metal prices.

Widening impact of the pandemic and slow growth in China’s economy remains a major setback for the Base metals complex.

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