US jobs report and FOMC minutes set to drive commodity prices next week

Commodities Outlook for next week

Extended weakness in the tech space, combined with uncertainty surrounding the Federal Reserve’s upcoming interest rate decision, kept risk-off sentiment firmly in place last week ended November 14.

A sharp selloff in heavyweight AI stocks dragged Wall Street lower, leading to the steepest one-day decline in major US indexes since October. By Friday, however, US equities steadied after the rout, leaving the S&P 500 and Dow Jones Industrial Average largely unchanged for the week, while the tech-heavy Nasdaq ended about 0.5 percent lower.

Meanwhile, the US dollar traded within a narrow band as the longest government shutdown in US history finally came to an end. The dollar briefly dipped below 99 but rebounded swiftly to 99.4 on Friday as expectations for a December Federal Reserve rate cut faded following a series of hawkish comments from Fed officials.

Several policymakers expressed doubts about the need for another rate cut this year, suggesting that maintaining current rates may be necessary to balance persistent inflation pressures against emerging signs of labor-market softening. Cleveland Fed President Beth Hammack and St. Louis Fed President Alberto Musalem both argued for keeping policy restrictive, with Musalem noting that rates are already close to neutral, leaving limited room for further cuts. Kansas City Fed President Jeffrey Schmid echoed similar concerns, warning that inflation remains "too hot" and signaling he may oppose any December rate reduction.

This shift in expectations weighed heavily on precious metals. Comex gold tumbled more than 2 percent, falling below $4,050 per ounce, while silver saw a sharper 4.7 percent drop to $50.7 per ounce on Friday. The declines erased half of the strong gains from earlier in the week, which had been driven by optimism when the US government reopened after a 43-day shutdown. Gold had briefly surged above $4,200 per ounce, and silver reached a record $54.37, partly supported by comments from a Fed official hinting at a possible restart of bond purchases to maintain control of short-term interest rates.

Related stories

Kaynat Chainwala

Senior manager - commodity research|Kotak Securities

• 
  Fed policy signals may guide commodities amid lack of US data
• 
  Commodities eye US inflation numbers, Chinese key data for further direction
• 
  Commodities brace for volatile week as US-China trade tensions and extended shutdown cloud outlook

On the daily chart, MCX GOLD futures formed a shooting star candle last Thursday after facing resistance near the Supertrend (7,3). The price declined sharply on Friday, breaking the pattern’s low of Rs 1,26,182 per 10 gram and marking the biggest single-day drop in three weeks. The bearish momentum is likely to continue in the coming week, with initial support at Rs 1,21,000 and then Rs 1,19,500. On the upside, immediate resistance is seen at Rs 1,26,200, followed by Rs 1,27,950.

WTI crude oil ended the week flat at $58.3 per barrel as traders weighed rising supply-glut concerns flagged by both OPEC and the IEA against looming US sanctions on Russian oil producers. The IEA raised its projected surplus for 2026 to 4.09 million barrels per day, while OPEC now expects a largely balanced market next year rather than the deficit previously forecast.

Oil prices may find support in the near term as attention turns to US sanctions on Rosneft and Lukoil taking effect on November 21, as well as continued Ukrainian attacks on Russian energy infrastructure.

Base metals closed the week mixed, reflecting a tug-of-war between softer macroeconomic indicators and ongoing supply tightness. Copper and aluminum managed modest gains, while zinc underperformed amid signs of deepening economic slowdown in China.

Looking ahead, markets will turn their focus to a heavy slate of economic data due next week starting from November 17. The Bureau of Labor Statistics is set to release the US September jobs report on November 20, though uncertainty remains over whether October figures will be published due to data collection disruptions during the shutdown.

Traders will also closely watch the UK’s CPI and retail sales numbers, global manufacturing PMIs, the US FOMC meeting minutes, and speeches by Fed officials, all of which are expected to shape market sentiment in the days ahead.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.