Commodities – Bullish trend in gold and silver continues

The bullish trend in bullion remains strong, with spot gold and silver both closing the last  week higher for the fifth consecutive time. Spot gold gained 1.16%, settling at $3,685.30, while spot silver surged over 2.0% to end the week at $43.08. Despite some profit-taking in the midweek, the overall trend remains bullish, with traders aiming for new highs. This positive momentum is supported by robust inflows into exchange-traded funds this year, active gold purchases by central banks, expectations of further interest rate cuts by the Federal Reserve before the end of 2025, and ongoing demand for safe investments amid geopolitical tensions and trade-related issues.

Crude oil prices see modest decline

Crude oil prices experienced a modest decline last week, influenced by mixed global signals that kept prices within a range. Trump reaffirmed his commitment to maintaining low oil prices, which has limited investors’ confidence in the effectiveness of global efforts to reduce Russian oil flows. Additionally, the friendly exchange between President Donald Trump and Chinese President Xi Jinping alleviated traders’ worries about the potential for US threats of indirect sanctions on Russian crude supplies becoming reality. While attacks on Russian oil infrastructure are providing some upward support for prices, the impact is tempered by a market anticipating a surplus in the coming months.

Natural gas prices declined by 1.80%

Natural gas prices declined by 1.80% last week, influenced by a surplus in storage and forecasts indicating milder weather, along with decreased demand for the upcoming week compared to previous expectations.

All base metals declined last week

All base metals declined the previous week, with zinc experiencing the most significant drop due to higher supply from China. China’s zinc market is seeing rising output and record ore imports, yet demand remains relatively weak.

 What to Watch

In the upcoming week, market attention is on the preliminary release of September S&P Global Manufacturing and Service PMI. Additionally, the Federal Reserve’s preferred measure of inflation, the Core PCE index, will be published, along with the final reading for September of the University of Michigan Consumer Sentiment Index, this Friday.

Disclaimer : This content is only for informational purpose. It does not make any recommendation to act or invest.

Source: HDFC Securities Prime Research

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