Stock Market Mélange

Gold Up on Safe haven appeal whilst Base metals & Crude witness a massive fall

Gold prices remained elevated in the week gone by on the back of safe haven demand while risky assets like base metals and crude were shunned by global investors.

China attempting to cap the rising Gold Up Commodity prices and persistent rise in covid19 infected cases in Asia might keep the global investors cautious in the week ahead.

Gold

Spot gold posted marginal gains of 0.8 percent in the week gone by as inflation concerns, a softer Dollar and increasing Covid19 infected cases in Asia boosted appeal for the bullion metal.

Soaring commodity prices around the globe ignited potential inflation worries which shifted the investors towards Gold, an inflation hedge.

However, Gold gave up some of its gains as the minutes of the US Federal Reserve official’s policy meet conducted on 27th – 28th April’21 stated that a number of FED officials agreed to consider a shift in the policy stance given a strong and persistent recovery in the world’s largest economy.

While retreating US Treasury yield and mounting inflation worries is expected to keep the demand for Gold elevated; a solid recovery in global economies might keep the prices in check in the week ahead.

Last week, Spot silver prices plunged over 2.3 percent closing at $27.5 per ounce whilst prices on the MCX dipped about over 3 percent closing at Rs.71049 per kg.

Crude Oil

Last week, WTI Crude plummeted over 4 percent as increasing Covid19 infected cases in Asia coupled with bets over resumption in Iranian Oil supplies undermined the prices.

After reports hinted developments over revival in the 2015 nuclear deal between Iran & the world powers, Iranian President Hassan Rouhani stated the sanctions imposed by US on Iran’s oil, banking and shipping sectors will be revoked. Bets on return of Iranian Oil supply which might add to the global Oil chain pressured the prices

Paced vaccine distribution in many nations around the globe continues to underpin the demand outlook for the Crude Oil market; however, lower consumptions from major consumer India and inflation woes might remain a headwind for the Oil prices in the days to come.

Base Metals

Industrial metals were dragged lower in the week gone by as China’s announcement to strengthen its management of commodity supply and demand to restrict the “unreasonable” surge in prices dented their appeal.

Also, limited credit growth by the PBOC amid weaker than expected expansion in China’s factory segment kept the global investors cautious.

However, a softer US Dollar, a paced recovery in global economies and worries over disrupted supply from top producing region of South America limited the fall in the base metal prices.

Copper

LME Copper dipped over 4 percent as China’s attempt to curb the soaring commodity prices outpaced the worries of a possible strike at the world’s largest Copper Mine, Escondida, situated in Chile and pushed the prices lower.

Mounting inflation worries amid China’s move to ease the commodity prices might keep the base metals market under pressure in the coming week.

This news was shared to Prittle Prattle News via press release.

Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

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