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Below are Views On Spot gold was down by 1.9 percent by to close at $1729.5 per ounce 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                                                       

On Monday, Spot gold was down by 1.9 percent by to close at $1729.5 per ounce. The bullion metal extended losses from the earlier week as solid US economic numbers continued to support market sentiments.

Promising US employment data and revival in markets risk appetite continued to hint towards early tapering by the Federal Reserve which strengthened the US Currency in turn pressuring the Dollar denominated Gold.

Tighter economic support measures and hike in the interest rates might underpin the US Treasury yield and push the Dollar higher dented demand for the non-interest bearing Gold.

On Monday, Spot silver as well as silver prices on the MCX plunged over 3.6 percent to close at $23.4 per ounce and Rs.62637 per kg in line with the fall in Gold prices.

Gold prices might continue to extend the fall as solid economic data from US continued to signal towards a hawkish approach by the US Federal Reserve which gave strength to the US Dollar and bond yields.

Crude Oil

 On Monday, WTI Crude ended lower by 2.6 percent to close at $70.2 per barrel as mounting worries over bleak demand from China and widespread of the Delta variant of the Covid19 virus continued to hamper market sentiments.

Oil extended losses from the earlier week as dismal trade data from China in July’21 and renewed restriction in major Oil consuming nations clouded the outlook for the global Oil market.

OPEC’s plan to increase output by 400,000 barrels per day from August’21 to December’21 amid bleak demand prospects might create a surplus of Oil supply in the global markets which further pressured Oil prices.

Renewed restrictions due to the fast-spreading Delta variant of coronavirus and a stronger Dollar might continue to weigh on Oil prices lower.

Base Metals

Last week, Industrial metals on the LME ended lower as appreciating US Dollar, 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.

Also, solid economic data and bets on a sooner than expected tapering of the expansionary approach by the US FED added to the downside in the base metals.

Aluminium prices are expected to find some support in the coming session as fresh round of power consumption norms imposed in a major Aluminium producing region of China raised worries of shortage in the global markets.

Copper

LME Copper ended lower by 1 percent to close at $9468 per tonne as bleak demand prospects from top metal consumer China following the widespread of the new variant of Covid19 hampered sentiments.

China’s Copper purchases in July’21 were down by 1 percent (mom) reporting its fourth consecutive monthly fall in imports. Sale of the state reserve by China twice last month, increased scrap metal inflows and high Copper prices led to the fall in Copper imports.

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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