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Ravindra Rao
All non-agri-food products were under pressure during the shortened holiday week because of the muscular dollar. For another week, energy was the theme of the market.
However, natural gas rose sharply, from $ 342 to $ 290, as a result of the overbought caused by the recent speculative rally. WTI oil, caught in a bear market, continues to decline while bearish indicators point to additional pain.
Oil marked a seventh weekly loss after Saudi Arabia announced that its output may have reached a record high, while US crude oil inventories fueled worries over supply oversupply.
The dollar strengthened after the United States recorded good housing starts, building permits and existing home sales, but greenback gains were contained, basic durable goods orders in the United States having fallen sharply.
Investment demand, which began to increase in early November, stagnated during Thanksgiving Holiday Week in the United States.
Finally, industrial metals fell under speculation about the weakening of Chinese economic growth in the face of trade war concerns. In addition, traders have focused on the G-20 meeting, which will be held in Argentina next week.
China's nickel fell for the sixth week, its worst period since the start of futures trading in 2015, as investors question economic growth prospects in anticipation of a meeting between Chinese and American heads of state next week.
US President Donald Trump and Chinese leader Xi Jinping said they were both ready for a much-awaited meeting at the Group of 20 summit in Argentina next week.
The world's largest economies are engaged in a growing trade war that is beginning to have a greater impact on financial markets and global growth.
Trump recently said that he was happy to know that China wanted to reach an agreement with the United States. This event will be crucial, especially for industrial metals.
Energy commodities should be volatile, at least crude oil. OPEC will meet in Vienna on 6 December. Until then, we think crude oil would be under pressure although it has dropped 33% from its recent highs.
Market speculation is strong, although OPEC is reducing production, markets may not be turning around. Regarding the volatility of natural gas, we recommend avoiding it.
Finally, gold can be traded within the range as long as $ 1,200 to $ 1,235 is uninterrupted, with volume support.
The United States will release its third quarter GDP and the minutes of the last Fed meeting. As a result, the dollar is likely to be volatile. On the MCX, the appreciation of the rupee may contain the yellow metal in a bearish embrace.
The author is the head of research and product consulting, Anand Rathi Commodities.
Warning: Investment opinions and advice expressed by investment experts, brokerage firms or rating agencies on Moneycontrol are theirs, not those of the website or its management. Moneycontrol advises users to consult certified experts before making any investment decision.
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