An alarming increase in the coronavirus cases in Europe and North America and worries over the reinforcement of lockdown limited gains for Crude Oil and Copper while extending support to the yellow metal. Oil prices ended lower on account of surplus production and bleak global demand prospects.
Gold
Gold ended lower by 1.06% and closed at $1,904 per ounce amid uncertainty over the additional stimulus package by the U.S. Furthermore, better than expected U.S. job data weighed down Gold.
U.S. House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin continued to bridge the gap between both parties. U.S. Dollar strengthened as President Trump blamed the democrats for not striking a deal over the new corona relief bill. Strengthening of the U.S. Dollar further dented the appeal for the yellow metal.
However, reinforcement of virus-triggered lockdown in Europe – as global coronavirus cases crossed 41.7 million – boosted the appeal for safe haven, Gold.
No significant signs of a deal over additional stimulus aid by the U.S. before the presidential elections might weigh down gold.
Crude Oil
WTI Crude ended higher by 1.52% and closed at $40.6 per barrel as Russian President Vladimir Putin stated extending production cuts if the impact of the pandemic continues to widen. However, extending production cuts might levy some support.
An alarming increase in coronavirus cases in Europe and North America led to the reinforcement of lockdown, which dampened the outlook for Crude and further pressurized prices.
According to the data released by Energy Information Administration, U.S. gasoline inventory went up by 1.9 million barrels against a market expectation of 1.8 million barrels projecting weaker demand for Oil.
Libyan Crude output also increased as its largest Oil Field Sharara resumed production amid bleak demand prospects further capping the gains.
Worries over the second wave of coronavirus and the reinforcement of lockdown along with Libya’s increased oil production might keep the gains in check.
Base Metals
LME base metals ended in the green amid appreciating U.S. Dollar. A surge in the coronavirus cases dampened the outlook for industrial metals.
According to reports from the International Lead and Zinc Study Group, weaker demand outside China is leading the global Zinc and Lead market towards surplus.
China’s primary Aluminium output in September’20 increased by 7.9% year-on-year basis and stood at 3.16 million tonnes as new smelters were introduced, which led to increased production.
According to the International Nickel Study Group, the global Nickel market surplus dropped to 6,600 tonnes in the August’20 from 8,400 tonnes in July’20.
Copper
LME Copper ended lower by 0.99% and closed at $6922.5 per tonne amid delay in additional stimulus deal by the U.S. and bleak economic outlook, which further weighed down prices.
Continuing talks over the new coronavirus relief bill by the U.S. and an alarming increase in the COVID-19 cases across the globe might further weigh down industrial metals.