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Below are Views On Spot gold slipped lower by 1.4 percent last week By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel One Ltd 

Easing supply worries weighed on Base metal prices

 Gold

Spot gold slipped lower by 1.4 percent last week as stronger US Dollar ahead of the Federal Reserve's upcoming policy meet pressured the bullion metal.

US Federal Reserve Chair Jerome Powell announced to begin the withdrawal of economic support as soon as next month which clouded the outlook for Gold.

However, US GDP grew by 2 percent in the third quarter of 2021, slowest pace in over a year, which reduced bets towards a tighter monetary policy.

Investors are expected to have a keen eye on the upcoming US Federal Reserve meet scheduled in the first week of November 2021 for cues on their stance considering the inflation concerns and weak US economic data.

Mounting inflation woes continues to be a supportive element for Gold as it is widely considered as a hedge against inflation and currency debasement.

Strengthening US Dollar ahead of the US Federal Reserve Policy meet is expected to weigh on the Dollar priced Gold.

Crude Oil

Last week, WTI Crude ended lower by 0.2 percent as worries over return of Iranian Crude in the global markets amid buildup in US Crude inventories undermined markets sentiments.

As per reports from the Energy Information Administration, US Crude inventories increased by 4.3 million barrels in the week ending on 22nd October 2021 surpassing market expectation of a 1.9 million barrels.

Oil prices found some support earlier in the month reflecting the potential shortage concerns amid increasing global demand.

OPEC & its allies sticking to its scheduled increase in production despite of a tight global Oil market limited the fall in Oil prices.

Rising fuel demand given the recovery in economic activities amid tighter Oil supply might keep Oil prices elevated in the week ahead. However, return of Iranian Oil in the global markets might turn out to be a headwind for Crude prices.

China releasing its gasoline and diesel reserve might add to the downside in Oil prices.

Base Metals

Industrial metals on MCX traded lower last week with Aluminium and Nickel posting the highest losses as plummeting coal prices in China took some pressure of the disrupted supply chain.

China’s Thermal Coal futures prices plunged last week as China’s state planner announced to conduct a "clean up and rectification" work on coal storage areas and try to bring prices to the previous ranges.

Fall in Coal prices somewhat eased supply worries in major metal producer China as it is widely used for Metal processing.

Depleting inventories, mounting inflation worries and optimism over resumption in global economic activities supported Base metal prices earlier this month.

Investors should remain cautious as signs of slowdown in China’s economy and fluctuations ahead of the US FED policy meet might lead to some volatility in Industrial metal prices.

Copper

Last week, LME Copper ended lower by 3.8 percent whereas MCX Copper prices slipped over 2 percent as falling coal prices eased the supply constraints and pushed prices lower.

Plummeting coal prices might continue to weigh on Aluminium and other industrial metal prices.

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