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Below are Views On Spot Gold ended lower by 0.3 percent to close at $1788.9 per ounce By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Strengthening of the US Currency weighed on the Dollar priced commodities.

Gold                  

On Wednesday, Spot Gold ended lower by 0.3 percent to close at $1788.9 per ounce. The bullion metal extended the fall from the earlier session as the US Currency and the Treasury yield continued to strengthen denting appeal for the Dollar priced Gold.

Many US federal reserve officials continued hint towards withdrawal of the massive asset purchases in 2021 which gave strength to the US Dollar.

The US Treasury yield rose to the highest levels in over a month which increased the opportunity cost of holding the precious metal.

However, slow growth in the US jobs in august’21 and widening impact of the Delta variant of COVID-19 virus limited the losses for the bullion metal. Also, slower growth in the US economy in August’21 following the widespread of the new variant of the Covid-19 virus further weighed on market sentiments.

Rising bets on possible tapering of the asset purchase program   and a stronger Dollar might continue to keep Gold prices under pressure.

Crude Oil

On Wednesday, WTI Crude prices ended higher by 1.4 percent to close at $69.3 per barrel whereas Oil prices on the MCX ended rose over 1.6 percent to close at Rs.5095 per barrel.

Oil prices extended the gains from the earlier sessions as low output from the U.S. Gulf of Mexico following the Hurricane Ida raised worries of shortage in the global markets. The Gulf’s offshore wells account for about 17 percent of the US oil output.

Also, expectation of depleting US Crude inventories further underpinned market sentiments pushing Oil prices higher.

However, appreciating US Currency weighed on the Dollar priced Commodities like Crude. Also, slow growth in China’s economy, widening impact of the pandemic limited the gains for Crude.

 Low output from US and expectation of withdrawal from US Crude inventories is expected to support prices.

However, mounting pandemic worries, slowdown in China and Saudi’s price cuts might continue to weigh on Oil prices.

Official US Crude inventory data will be published later in the day.

Base Metals

On Wednesday, most Industrial metals on the LME ended higher except Copper which ended lower by 1.1 percent. Mounting supply uncertainties amid robust demand supported Aluminium and other industrial metal prices.

However, a stronger US Dollar and prospects of tapering od the asset purchase program by the US FED capped the gains for the industrial metals.

Moreover, signs of evident slowdown in China’s economy continued to weigh on market sentiments. China’s private survey stated that their Service sector slipped into contraction in August’21 as renewed restrictions following the widespread of Covid-19 Delta variant hampered economic activities.

The private sector survey focuses on the smaller and medium sized firms in China. While China has successfully contained the virus outbreak, an evident slowdown in their economy might continue to remain a considerable headwind for the industrial metal prices.

Copper

On Wednesday, LME Copper ended lower by 1.09 percent to close at $9249 per tonne as a stronger Dollar and bleak demand prospects from China pressured the red metal prices.

Worries over slowdown in China’s economy and a stronger Dollar  might continue to remain weigh on the base metals spectrum.

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