Outflows from Gold ETFs on Wednesday was the biggest in 5 months

Bullion continued to decline on Wednesday, following its worst rout in years, as concerns grew that its recent rally had advanced too quickly. The outflow from gold-backed ETFs on Wednesday, 22nd October, marked the largest single-day withdrawal in five months. Investors are also considering the potential for a US-China trade deal that could ease some of the geopolitical tensions and fade demand for safe-haven assets like gold. In the short term, bullion may experience further price corrections.

Crude oil prices gained

Crude oil surged nearly 1.0% on Wednesday and continued to rise during the Asian trading session on Thursday, following the U.S. announcement of sanctions against Russia’s largest producers. This move by President Donald Trump aims to increase pressure on his counterpart, Vladimir Putin, to negotiate an end to the war in Ukraine.

Recent penalties are expected to diminish Russian crude exports to major Indian processors. Additionally, oil prices received support from government data indicating that total U.S. petroleum stockpiles declined by approximately 4.2 million barrels, reaching their lowest level since late September.

Natural gas retreated on Wednesday after surging nearly 20.0% in the last three trading sessions. The market still appears to be well supplied into November; however, a recent uptick in heating demand and record-high feed gas flow have contributed to rising gas prices.

Base metal prices increased

Base metals moved higher on Wednesday, with zinc experiencing the top gain among other metals. A significant decline in inventories at LME warehouses is responsible for this surge. Zinc stockpiles have been decreasing for months as smelters have reduced production. This week, spot prices for zinc have sharply risen as traders hurried to secure the remaining supplies within the LME’s warehousing network.

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Source: HDFC Securities Prime Research