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Below are Views On the pandemic amid a softer Dollar might continue to push Gold prices higher in today’s session By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

A lower Dollar following the accommodative approach by the US FED supported commodities.

 Worries over some early tapering of the expansionary policy by the US Central bank eased as the US Federal Reserve Chair Jerome Powell failed to provide any fixed timeline on commencement of withdrawal of the economic support which underpinned Gold prices.

Gold

On Monday, Spot Gold ended lower by 0.36 percent to close at $1810.2 per ounce. Spot Gold continued to hover above the 1800 level as the US Federal Reserve kept the interest rates low and didn’t announce any timeline on withdrawing the economic support which boosted appeal for the bullion metals.

US FED Chair Jerome Powell vowed to keep the interest rates low for the foreseeable future. However, markets still expect to see some tapering of the bond purchases later this year.

The safe haven Gold was further supported as a slowdown in China’s economy, mounting geopolitical tension and the recent outbreaks of the new variant of Covid19 virus continued to hamper market sentiments.

However, rising Oil prices following the potential shortage concerns kept the gains for Gold in check.

Investor will have a keen eye on the U.S. employment figures for August’21 for cues on the labour market recovery and FED’s stance in the months ahead.

Accommodative stance by the US FED, widening impact of the pandemic amid a softer Dollar might continue to push Gold prices higher in today’s session.

Crude Oil

On Monday, WTI Crude rose about 0.7 percent to close at $69.2 per barrel. Oil prices extended gains from the earlier session as potential shortage worries coupled with a softer Dollar underpinned the prices.

The Ida hurricane heading towards the Gulf of Mexico forced the nearby energy companies to shut the production capacities in turn supporting Oil prices. By the end of last week, energy companies in the U.S. Gulf of Mexico were forced to shut down about 1.65 million barrels a day’s production as the hurricane Ida charged towards the drilling rigs and other infrastructure.

However, Oil refineries shutting down raised worries of low demand from the production capacities which comes in line with OPEC’s move to increase Oil output which capped the gains for Crude.

Also, widening impact of the pandemic which might lead to fresh curbs across borders affecting global supplies as well as demand further weighed on Oil prices.

Mounting pandemic worries and low demand from the Oil refineries in the Gulf of Mexico might continue to weigh on the market sentiments.

Base Metals

LME markets were closed on Monday on account of the summer bank holiday in UK. Industrial metals on the MCX ended mixed with Aluminium gaining the most amongst the pack.

Mounting supply uncertainties for Aluminium continued to underpin prices across exchanges. Stern energy usage norms imposed forced Chinese smelter to limit out which has kept the Aluminium supply chain under pressure in 2021.

Continuation of the accommodative stance by the US Federal Reserve continued to weigh on the US Currency which also supported the Dollar priced industrial metals.

Copper

On Monday, MCX Copper ended higher by 0.8 percent to close ar Rs.724 per kg. Supply threats for Copper persist as union at BHP's Cerro Colorado copper mine in Chile which raised worries of a potential strike.

No fixed timeline provided by the US FED Chair Jerome Powell on tapering of the asset purchase programme weighed on the Dollar might continue supporting the industrial metals.

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