Gold, oil, and base metals respond to policy uncertainty, trade frictions, and shifting rate expectations, with key macro data in focus for the week ahead.
Market Recap: A Volatile Week for Commodities
The week ending October 17 proved turbulent across commodity markets, shaped by:
- Concerns over US regional banks,
- Shifting US-China trade dynamics,
- And mounting pressure from the looming US federal shutdown.
The US dollar slipped to 98.5, as stress in the banking system and geopolitical noise led to risk-off sentiment, fueling rallies in safe-haven assets and select metals.
Gold: Pullback After Record High, But Trend Intact
COMEX gold experienced high volatility, spiking to a record high of $4,392/oz before retreating below $4,200 on Friday.
- Despite the drop, gold ended the week up 7%, underpinned by:
- Banking jitters
- Trump’s partial decoupling remarks
- China’s sanctions on US-linked entities
MCX GOLD Futures:
- Bearish Engulfing candlestick on the daily chart signals near-term caution.
- Break below ₹1,25,957 could extend the fall to ₹1,23,650, and then ₹1,20,000.
- Resistance zones: ₹1,31,000 and ₹1,32,300.
While a short-term correction is likely, it may not mark a trend reversal given the macro tailwinds still supporting gold.
Silver: Sharp Weekly Gain Despite Friday Selloff
COMEX Silver surged to a record high of $53.76/oz, before a 5% profit-taking dip on Friday.
- Closed the week 7% higher, mirroring gold’s trajectory.
- Strength was driven by:
- Safe-haven buying earlier in the week
- Continued support from central bank diversification and ETF inflows
Silver remains more volatile than gold, but momentum stays constructive as long as global risk sentiment remains fragile.
Crude Oil: Sinks to 5-Month Low on Weak Outlook
NYMEX crude slid to $56.6/bbl, marking its third straight weekly decline.
- Down 8% month-to-date, crude remains under pressure from:
- Weak global demand outlook for 2025–26
- The IEA’s projection of a 4 million bpd surplus by 2026
- Easing geopolitical risk premiums and softening trade rhetoric
Unless demand picks up or supply tightens unexpectedly, oil is likely to stay on the back foot.
Base Metals: Mixed Trends Amid Trade Uncertainty
LME base metals closed mixed, caught between supply concerns and macro volatility.
- Copper:
- Rose 0.85%, but trimmed gains as the partial US shutdown delayed economic data.
- Prices remain elevated near 16-month highs, but momentum may fade short term.
- Aluminium:
- Gained over 1%, helped by Alcoa’s refinery closure in Australia due to falling bauxite grades.
- Supply-side disruptions continue to lend price support.
Despite intermittent rallies, metals face resistance from renewed US–China trade friction, including tariff threats and export controls.
All Eyes on Macro Data: US and China in Focus
The coming week is data-heavy, and the next moves in commodities will hinge on key macro releases:
United States
- Flash PMI data – A proxy for economic momentum and labor market health
- Inflation numbers (due Oct 24) – Critical for shaping Fed rate cut expectations
- Senate vote on federal funding – Outcome will influence market sentiment and risk appetite
China
- Industrial production, retail sales, and fixed asset investment data – Will reflect post-stimulus recovery strength
- Continued stress in property sector may influence metal demand outlook
United Kingdom
- Inflation data – A potential market mover for global rates and currency volatility
Key Takeaways for Traders
- Gold and silver remain structurally strong, but short-term corrections are likely.
- Crude oil is under pressure and may need a clear demand catalyst to reverse its slide.
- Base metals could stay volatile, with supply tightening and trade policy acting as swing factors.
- Macro data will set the tone – especially US PMI and inflation prints.
Commodities ended a volatile week with gold and silver posting strong gains, crude oil slumping, and base metals mixed. With US inflation data, Chinese economic releases, and the federal shutdown vote ahead, markets await clarity on growth and rate policy.
