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Below are Views On Commodity Article 11th November 2021 By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel One Ltd 

Build up in US Crude stocks halts the rally in Oil

Gold

On Wednesday, Spot gold prices gained about 1 percent to close at $1849.6 per ounce reflecting the solid US inflation figures. Mounting inflation worries has been a prime reason behind the recent rise in Gold prices.

In October’21, US consumer prices surged following the increase in energy and food prices which boosted appeal for Gold which is widely considered a s a hedge against inflation and currency debasement.

The US Federal Reserve keeping interest rates near zero in the policy meet conducted last week hinted towards a Dovish approach which kept Gold prices afloat earlier in the week.

Inflation woes and an accommodative approach by global central banks has created a supportive environment for the safe haven asset, Gold.

Supportive monetary approach and a weaker US Dollar is expected to push Gold higher in today’s session.
 

Crude Oil

On Wednesday, WTI Crude slipped lower by 3.34 percent to close at $81.3 per barrel as buildup in US Crude inventories outpaced optimism over boost in global demand.

As per reports from the Energy Information Administration, US Crude stocks increased by 1 million barrels in the week ending on 5th November’21.

Bets over revival in global demand amid a tight supply market kept Oil prices elevated earlier this week. US withdrawing the travel restrictions coupled with resumption in global economic activities is expected to boost demand for Crude further pressuring the already tight supply chain.

Bets over increasing demand amid a tight supply market is expected to keep Oil prices elevated.

Base Metals

Industrial metals on MCX remained under pressure in line with the international markets as escalating concerns over the ongoing property crisis in China undermined the demand prospects for the base metals complex.

The ongoing property crisis, stern energy usage limitations and the recent spike in power prices around the globe has hampered the economic recovery in China, the largest metal consuming economy.

Boost in demand for Industrial metals given the resumption in global economic activities and the massive US infrastructure bill has created a supportive environment for the entire pack in the recent months. Industrial metal prices also found some strength as limited supply from China and depleting inventories across exchanges continued to hint towards a tight supply.

However, dismal demand from China remains a major setback for the Industrial metals complex.

Copper

On Wednesday, MCX Copper prices ended lower by 0.91 percent extending the fall from the previous session as uncertainties arising from China’s economy clouded the outlook for Copper and other industrial metals.

The ongoing property crisis in China might overshadow worries over tightening supplies and push prices lower.

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