Weaker US Dollar supports the Dollar priced commodities

Gold
On Monday, Spot gold gained over 0.5 percent to close at $1769.5 per ounce where as worries between the world’s largest economy, US & China, amid weakening US Dollar underpinned the Dollar prices bullion metals. The Dollar index which gauges the strength of the US Dollar slipped over 0.3 percent in yesterday’s session.
Dismal US employment and consumer confidence figures took some pressure off Gold towards the end of last week as Federal Reserve officials stated that tightening of the monetary policy depends on steady expansion in the US labor market.
The slower than expected recovery in the US labor might shift all the focus to the U.S. September nonfarm payrolls report due later in the week for cues on the timeline for tapering economic support by the US FED.

Revival in the US Dollar is expected to levy some pressure on Gold; however, mounting inflation worries might keep Gold prices afloat.

Crude Oil
On Monday, WTI Crude rose over 2.2 percent to close at $77.6 per barrel whereas Brent Crude surpassed the $80 level on a promising demand outlook.
OPEC planning to continue to boost output as per scheduled earlier, ignoring the calls from major Oil consuming nations to increase production supported Oil prices in yesterdays session.
Also, depreciating US Dollar made the Dollar denominated Oil less expensive for other currency holders.
Further supporting Oil was the surge in natural gas prices across the globe which would shift power producers away from Gas.
However, increasing power usage limitations in China and easing worries over a tight supply market might limit on Oil prices.
OPEC and its allies sticking to the production scheduled and prospects of increasing global demand might continue to support Oil prices.

Base Metals
On Monday, Aluminium and other industrial metals on the MCX traded higher in line with the international markets as resumption in global demand amid potential shortage concerns over shadowed uncertainties arising from China and pushed the prices higher.
China imposing production curbs on high-polluting industries such as smelting to cut power use and emissions ignited potential shortage worries in global markets.
Investors are expected to have a keen eye on China’s import and export data due later this week for clues to growth and demand for base metals.
Copper
On Monday, LME Copper ended higher by 1.34 percent to close at $9250.5 per tonne following a weaker Dollar and depleting inventories across exchanges.
Easing US Dollar helped the Dollar denominated Copper and other industrial metals cheaper for other currency holders.
Mounting shortage worries amid recovery in global demand might levy some support for Base metals. However, signs of tension between US & China is expected to keep the Base metal prices in check.

5th October

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