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Below are Views On Worries over slowdown in the global recovery halts the rally in Oil and Base metal prices By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel One Ltd 

Gold

On Tuesday, Spot gold ended higher by 0.24 percent to close at $1768.9 per ounce. The bullion metal gained strength in yesterday’s session as increasing inflation concerns and a weaker Dollar boosted appeal for the safe haven Gold.

Increasing bets over the inflation not being a transitory element has been supportive for Gold as it is widely considered as a hedge against inflation and currency debasement.

Also, weaker than expected industrial activities figures posted by US following the disrupted global supply chain hinted towards weaker than expected recovery in the world’s largest economy.

However, expectation that the US Federal Reserve would begin with the tapering of the expansionary policy following the recent increase in US consumer prices limited the gains for Gold. commencement of withdrawal of the economic support by next month.

Revival in the US Treasury yield is expected to weigh on the non-interest bearing Gold.

Crude Oil

On Tuesday, WTI Crude scaled higher by 0.66 percent to close at $83 per barrel hovering near record high levels as increasing shortage concerns across the globe continued to support market sentiments.

Moreover, surge in coal and natural gas prices coupled with falling temperature in China is expected to keep the Oil market under supplied and prices elevated in the days ahead.

However, weaker than expected US industrial activity figures and slowdown in China’s economy is expected to weigh on Crude prices. Uncertainties arising from major Oil consuming nations following the disrupted supply and virus outbreaks might put a pause on Oil’ rally.

Also, increasing inflation woes reflecting the soaring energy prices raised worries of slowdown in global growth and hampered sentiments.

China aiming to cool down coal prices in an attempt to ease the power shortage concerns might weigh on Oil prices in todays session.

Official US Crude inventories data due later today.

Base Metals

On Tuesday, Industrial metals on the LME & MCX eased after the recent rally as investors booked profits. Also, slow growth in China’s economy following the disrupted supply and increase energy prices further [pressured market sentiments.

While the power crisis has triggered potential shortage threats, investors are expected to remain cautious as it might also impact industrial metals demand.

Zinc prices plunged after a power rally last week as inventories on the LME monitored warehouse ticked higher.

Base metal prices surged across exchange in the week gone by as the energy crisis witnessed in major economies ignited potential shortage concerns. Increasing power consumption norms in major producer China and soaring electricity cost around the globe forced many smelters to cut production activities.

Copper

On Tuesday, LME Copper ended lower by 0.46 percent to close at $10149.5 per tonne. The red metal reversed some of its gains from last week following signs of slowdown in major economies clouded the outlook.

However, potential supply threats arising from major producing nation Peru as community announced to start a protest at a prime mining road used by the Las Bambas copper mine following the failed negotiations.

China vowing to ease coal pr8ices, investors booking profits, signs of slow growth in China’s economy and dismal US industrial number might weigh on Base metals prices.

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