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Below are Views On Spot gold ended marginally higher by 0.2 percent to close at $1765.90 per ounce By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel One Ltd 

Resumption in economic activities underpin Base metals

Gold

On Thursday, Spot gold ended marginally higher by 0.2 percent to close at $1765.90 per ounce. The US Dollar and Treasury yield strengthened after the initial US weekly jobless claims slipped lower indicating towards developments in the US labor market.

Any positive US economic data set will increase bets towards a tighter monetary policy by the US Federal Reserve which would strengthen the Dollar.

Appreciating US Dollar ahead of the key US employment data made the Dollar priced commodities expensive for other currency holders.

Also, increasing Oil prices following bets over resumption in global economic activities boosted markets risk appetite which further pressured the safe haven Gold.

A steady US Dollar ahead of the payrolls report that is expected to provide clues on the Federal Reserve's tapering timeline might keep markets cautious.

Crude Oil

On Wednesday, WTI Crude slipped about 2 percent to close at $75.9 per barrel. Oil prices traded lower as the Dollar continued to scale higher making the Dollar priced Oil less desirable for other currency holders.

However, mounting worries over tighter supplies and resumption in economic activities levied some support for Oil prices.

Lowering expectation of US Energy Department releasing emergency crude reserves or ban exports despite tight US Crude supply capped the fall in Crude prices.

Oil prices remained under pressure in the earlier session as US Crude inventories rose for the second consecutive week. As per reports from the Energy Information Administration (EIA), US Crude inventories rose about 2.3 million barrels in the week ending on 1st October 2021 surpassing the markets expectation of a 0.8 million barrel jump.

Industries switching from gas to Oil amid tight Oil supply is expected to keep Oil prices elevated.

Base Metals

On Thursday, most Industrial metals on the LME ended higher as uptick in global equities and escalating shortage worries outpaced worries arising from China.

Further supporting base metals were the increasing energy prices and stern environmental norms in China which is expected to keep the supply tight.

Industrial metals remained under pressure earlier in the week as worries over growth in China’s property sector following the debt troubles at China’s Evergrande comes in line with the disrupted industrial activities which added to the troubles at the worlds largest metal consuming economy.

Copper

On Wednesday, LME Copper ended higher by 0.83 percent whereas Copper prices on the MCX gained over 0.4 percent. After the Peruvian government averted a potential strike at MMG’s Las Bambas mine, a similar situation came up as an indigenous community in Peru's Espinar province that blocked a key mining road in protest against the government and Glencore's Antapaccay copper mine (Peru's sixth-largest copper mine).

The road blockade now affects both, Antapaccay as well as Las Bambas copper mine (data from the ministry of energy and mines) which kept Copper prices elevated. 
 

Depleting inventories and increasing shortage concerns might outrun the concerns over growth in China’s economy and an appreciating US Dollar and keep the Base metal prices under pressure.

Investors are expected to remain cautious as Re-opening of China’s market after a week long holiday is expected to keep markets volatile.

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