(By: Mr.Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd)
An alarming increase in the coronavirus cases across the globe might further weigh down Gold, Crude, and Base Metal prices. Gold ended higher on account of hopes over additional stimulus aid. Libya’s increased production along with bleak demand prospects weighed down Crude prices. In contrast, base metals ended positive amid China’s increased industrial activities.
Spot Gold ended higher by 0.95% and closed at $1,924.5 per ounce amid hopes over additional stimulus package by the U.S. that kept the prices elevated. Suggested development towards the coronavirus relief bill supported the yellow metal prices.
Gold has gained over 25% amid lower interest rates and the enormous amount of liquidity infused by the global central banks since outbreak. It is popular among investors as a hedge against inflation and currency debasement.
Reinforcement of the pandemic triggered curbs in Europe further supported gold prices. Coronavirus cases across the globe have surpassed 40.8 million boosting the appeal for the safe haven, Gold.
However, no signs of a deal regarding the additional corona relief bill by the U.S. before the upcoming presidential elections due in November’20 might weigh down the gold.
WTI Crude ended lower by 3.45% and closed at $40.0 per barrel amid worries over the widening impact of the pandemic which weighed down the prices.
An alarming increase in the COVID-19 cases in Europe and North America led to the reinforcement of lockdown, which dampened the outlook for crude further pressurizing the Oil prices.
Libya’s Crude Oil output increased as its largest Oil Field- Sharara resumed production. However, weak demand prospects further dented the prices.
According to Energy Information Administration, U.S. Crude inventory levels ended lower by 1 million barrel during the last week as Hurricane Delta led to the closure of offshore facilities.
Saudi Arabia’s Crude exports gained momentum amid increased demand for Oil. Exports in August’20 stood at 5.97 million barrels per day.
Libya’s increased oil production and worries over the second wave of the pandemic are likely to weigh down Crude prices further.
LME Base Metals ended in the green as China’s economy showed steady expansion. Furthermore, lower U.S. Dollar elevated the prices.
Reports from the International Lead and Zinc Study Group stated possible surplus in the global Zinc and Lead markets on account of weaker demands outside China.
China’s GDP rose about 4.9% from July’20 to September’20, which further supported the base metals prices. The gains were however limited on account of increased coronavirus cases in Europe and North America.
LME Copper ended higher by 1.34% and closed at $6,991.5 per tonne amid weaker U.S. Dollar and robust expansion in China’s economy. However, an alarming increase in the COVID-19 cases and stalled talks regarding additional stimulus aid by the U.S. might keep the red metal prices within the check.
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