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Below are Views On Spot gold slipped over 2.8 percent in week gone by to close at $1762.7 By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

A  stronger Dollar undermines Commodities

Appreciating US Currency following the strong economic data reported by US weighed on the Dollar denominated commodities. That, coupled with fresh round of restriction in many nations clouded the demand outlook for Oil & Base metals which might further add to the downside in prices.

Gold

Spot gold slipped over 2.8 percent in week gone by to close at $1762.7 per ounce as revival in markets risk appetite and a stronger Dollar dragged the prices lower.

Promising economic figures reported by US increased fresh bets on some early tapering by the Federal Reserve which further pressured Gold prices.

Any signs of tightening of the monetary policy by the US central bank will give strength to the US treasury yield and the Dollar which is not supportive for the bullion.

Gold prices might continue to extend the fall from the past week as solid economic data from US continued to signal towards a hawkish approach by the US Federal Reserve. However, the widespread of the Delta variant of the Covid19 virus might continue to weigh on market sentiments in turn levying some support for Gold.

Crude Oil

WTI Crude prices plunged over 4 percent as sudden spike in the US Crude inventories, worries over bleak demand from China and widespread of the Delta variant of the Covid19 virus undermined market sentiments.

That, coupled with OPEC’s plan to increase output by 400,000 barrels per day from August’21 to December’21 might lead to excess of Oil supply in the global markets which further pressured Oil prices.

As per reports from the Energy Information Administration, US Crude inventory data rose by 3.6 million barrels in the week ending on 30th July’21 against the market expectation of 3.2-million-barrel drop.

Renewed restrictions due to the fast-spreading Delta variant of coronavirus and a stronger Dollar might continue to drag Oil prices lower in today’s session.

Base Metals

Last week, Industrial metals on the LME ended lower as slow growth in the manufacturing sector of major economies and widening impact of the delta variant of the Covid19 virus clouded the demand outlook for the entire pack.

As per data from the National Bureau of Statistics, China’s official manufacturing Purchasing Manager's Index dipped to 50.4 in July’21 from 50.9 reported in June’21. In July’21, industrial activities in China grew at the slowest pace in 17 months reflecting the dismal weather conditions, disrupted supply and high raw material costs.

Also, the strengthening of the US Currency reflecting the upbeat economic data and bets on a sooner than expected tapering by the US FED added to the downside in the base metals.

Copper

LME Copper ended lower by 2.4 percent as bleak demand prospects from top metal consumer China hampered sentiments. The losses for Copper were limited due to the supply uncertainties arising from Chile. After rejecting the final offer, the labour union representing the workers at BHP’s Escondida mine, the world’s largest Copper deposit, called its member to prepare for a strike due to slow advancement in the negotiations.

Worries over weak demand from China following renewed pandemic led curbs and appreciating Dollar might continue to weigh on industrial metal prices.

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