Commodity Market Today: Energy Index Falls 2.8% as Base Metals Gain Ground

The commodity market today experienced a mixed trading session, characterised by sharp divergence between the industrial and energy prices sectors, while the precious metals remained under pressure.

The overall mood was cautious, with significant declines registered in Natural Gas countering the resilience shown by base metals. This segmentation suggests that while domestic industrial demand may be holding up, the supply outlook for international markets‘ energy complex remains bearish.

The MCX iCOMDEX Natural Gas index dropped steeply by 2.86%, significantly weighing down the overall sentiment.

Base Metals Display Resilience:

Industrial metals emerged as clear winners for the session, suggesting robust underlying demand. The MCX iCOMDEX Base Metal index posted a gain of 0.28%. Leading this ascent was Copper, which settled 0.49% higher. Spot prices for Copper in Thane were also marked up.

The strength extended across the ferrous and non-ferrous space. Zinc mini gained 0.44%, while the standard Zinc contract also moved positively, up 0.27%. Similarly, Lead mini showed modest gains, rising 0.34%.

Spot market indicators reinforced this strength, with Aluminium also showing an upward movement in its spot price. Beyond industrial segments, Cardamom was the outstanding performer, surging 3.91%, topping the gainers list.

Natural Gas and Bullion Witness Selling Pressure:

On the losing side, the energy prices sector saw heavy losses, primarily driven by Natural Gas. Both the Natural Gas contract and the Natural Gas mini shed 2.75% each, making them the largest percentage losers in the complex.

This decline in Natural Gas prices suggests that strong supply or a potentially weak near-term demand outlook may be influencing trading sentiment.

The precious metals complex, despite relative stability, ended the day on a weak note. The MCX iCOMDEX Bullion index traded lower by 0.23%. The gold price in futures was softer, with Gold Guinea dropping 0.52%.

The silver rate followed a similar trajectory; the Silver mini contract lost 0.46%, and the standard Silver contract declined by 0.40%.

The current market action clearly highlights a segmented approach by traders, favoring base metals linked to industrial growth over both energy prices and precious metals.

Analysts suggest that until there is a decisive shift in global monetary policy or geopolitical tensions that impact supply chains, this divergence may persist.

For the near term, strong support levels for industrial metals should be watched, while Natural Gas faces continued pressure from global supply dynamics.

Disclaimer: The information provided is for educational purposes only and does not constitute financial advice. We are not registered financial advisors. Please conduct your own research and consult a qualified advisor before making investment decisions. Any investment decisions you make based on this information are solely at your own risk.

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