Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd
Hopes over potential COVID-19 vaccine limited the gains for the yellow metal. The continued dampening impact of the pandemic along with bleak demands is likely to weigh down Crude Oil prices further. Depreciating U.S. Dollar extended support to industrial metals. However, doubts over the vaccine might limit the gains.
Gold
Gold gained about 0.3% and closed at 1810.6 per ounce. The rising bets on further infusions by the global central banks increased the appeal for the yellow metal, Gold. However, hopes over potential vaccine against coronavirus capped the gains.
An alarming increase in the COVID-19 cases in various world economies and worries over fresh lockdown in many parts of the world raised hopes of additional support from the global central banks. This underpinned the yellow metal’s prices.
A weaker U.S. Dollar extended support to Gold making Dollar-denominated Gold cheaper for other currency holders.
The ongoing coronavirus pandemic continued to hamper the labour market in the world’s largest economy as many Americans applied for the jobless claims.
Investors are still uncertain about a potential COVID-19 vaccine. This might extend some support to the safe haven, Gold.
Crude Oil
WTI Crude is expected to remain under pressure on account of the dampening impact of the pandemic and increased Libyan Oil production.
Major world economies like the U.S. and Europe are facing a drastic impact of the coronavirus pandemic. Chances of new lockdowns in these economies dented the demand for the Crude.
The losses in Crude Oil prices were, however, limited on account of decreased U.S. inventory and hopes over potential COVID-19 vaccine.
According to the reports released by the U.S. Energy Information Administration, U.S. Crude stockpiles went up by 745,000 tonnes.
Tighter Oil supplies by OPEC and its allies in the months to come is likely to extend support to Crude. OPEC and its allies might revoke the planned production cuts in January’21 owing to bleak demand prospects, ailing oil markets and no strong signs of economic recovery.
Furthermore, uncertainty over coronavirus vaccine and oversupply of Oil might further dent the prices.
Base Metals
Base metals on the LME ended in the green amid hopes over potential coronavirus vaccine. Furthermore, chances of additional stimulus and depreciating Dollar further extended support to industrial metal prices.
However, worries over fresh lockdown in the U.S. and a surge in the number of coronavirus cases worldwide capped the gains in industrial metal prices.
According to the World Steel Association, Global crude steel production went up by 7% and stood at 162 million tonnes as production capacities outside China resumed activities.
The global Zinc market surplus stood at 33,100 tonnes in September’20, according to the reports revealed by the International Lead and Zinc Study Group.
Copper
LME Copper ended higher by 1.40% and closed at $7402.5 per tonne amid increased demand from China- the world’s largest industrial metals consumer and a depreciating U.S. Dollar.
However, uncertainty over potential vaccine to combat the pandemic might dent the industrial metal prices.
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