In a week that was dominated by the US Presidential elections, the global commodity markets put up a varied performance with components in the energy, metals and agriculture markets moving in different directions. In a majority of cases, prices are either unchanged or lower, with a few exceptions. Even prior to the election results, it was widely believed that re-election of President Obama would mean status quo.

All precious metals gained over the week. With the near-term uncertainty removed, the US treasuries rallied and the dollar weakened.

Gold was a beneficiary with gain of 3.2 per cent over the week, while silver’s gain was muted at 0.8 per cent.

Among base metals, lead was the lone star performer with a price gain of 3.8 per cent to end the week on the LME at $2,178 a tonne. While copper and nickel were down, others remained unchanged. Oil prices witnessed a brief relief rally that was short-lived.

Among agricultural commodities, wheat prices have been moving higher on supply concerns in the southern hemisphere, especially in Argentina and Australia. Supply downgrades have been mounting. Stocks with the big-five traditional exporters are relatively modest.

Gold

Expectation of a highly accommodative monetary policy stance with the reelection of US President has provided the trigger the yellow metal has been waiting for. After suffering reveres in the previous week, gold bounced back smartly to breach the $1,700 an ounce mark. On Friday in London, the gold PM Fix was $1,738/oz, up from the previous day’s $1,717/oz. Silver followed suit with Friday AM Fix at $32.16/oz versus the previous day’s $31.70/oz.

. Ahead of the elections, speculative positioning had been reduced to a nine-week low. Interest in physically backed ETP has been crawling higher.

If the US economic performance continues to stay in the positive territory, the dollar will gain and so will the equities market. There is the risk of exit from gold.

According to technical analysts, a higher high is the reason to remain bullish on gold toward target at 1,749 and then 1,770. Silver is poised to reach 33.50. The medium term outlook is said to be bullish.

Base metals: The market has been at the mercy of global growth signals which, as is well known, have not been quite positive in recent months. Sovereign debt crisis in Europe, slowdown in China and election-related uncertainties in the US all combined to keep the market on leash. If growth activities pick up in the coming months, it would boost the base metals markets and especially help those metals whose fundamentals are supportive.

With the exception of lead, base metals prices in Q4 so far have been weaker than anticipated. The improvement in financial market sentiment has benefited equities more than commodities, according to an analyst. Lead is widely expected to continue to outperform in the short term given its positive demand signals and tightening supply. Cash lead on LME was $2,178/t on Friday, while copper closed at $7,568/t and aluminium $1,902/t.

According to technical analysis, copper prices have failed to confirm a corrective bounce and given the drop in positioning, there is reason to turn short on the metal targeting trendline support at 7,320. Aluminium remains range-bound near term. The medium term outlook is said to be bullish.

Crude

Prices are likely to remain range-bound in the short run as supply and demand dynamics are fairly balanced. However, given the global state of affairs, geopolitical risks cannot be wished away. Technically, the market is said to be looking somewhat bullish.

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