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Commodities struggle for direction as focus shifts to central banks

The key event in the coming week is FOMC decision on November 2-3. Comments from Fed officials and FOMC minutes indicate that criteria to start bond tapering has been largely met.

October 29, 2021 / 07:34 PM IST

Ravindra Rao, VP - Head Commodity Research at Kotak Securities

Commodities witnessed another volatile week as market players remained nervous about more interventions to stabilize prices.

China's coal prices have continued to slide as China intensified measures to improve supply and curb speculative and hoarding activity and limit prices. As per Reuters report, China aims to cap the price of its most-popular 5500-NAR grade coal at 440 yuan ($69) a ton at the pithead. Additional pressure on prices came as China's planning agency NDRC noted that there is still room for China to further adjust coal prices.

Commodities rallied sharply earlier this month amid surge in coal and natural gas prices. Crude oil rallied on hopes that higher gas and coal prices may lead to fuel switching while industrial metals gained on concerns that rising energy costs may impact production activity and gold remained near $1800 per troy ounce as rising commodity prices fueled inflation concerns.