The commodity market exhibited mixed gains as trading focused on two central macro events: the long-awaited end of the US government shutdown and strengthening expectations for a near-term Federal Reserve interest rate cut.
President Donald Trump signed the funding bill that officially ended the record 43-day federal shutdown, injecting a sense of stability back into global markets.
Precious Metals Gain on Dovish Fed Outlook
Gold and silver prices both edged higher, reflecting investors’ continued desire to hedge against global uncertainties and the prospect of monetary easing.
Gold climbed 0.23% to ₹1,26,751, with prices rising as traders focused on the Federal Reserve’s rate outlook. The delay in releasing official US economic data, caused by the shutdown, meant traders were left relying on private indicators.
Recent private labor data showed US companies shedding an average of 11,250 jobs per week through late October, reinforcing expectations of weakness in the US economy. This weakness strengthened bets on another 25 basis points (bps) rate cut, currently priced at around 65%. On the physical market front, China’s gold consumption fell 7.95% in the first three quarters of 2025 to 682.73 tonnes, even as domestic output rose 1.39% year-on-year.
Silver prices also edged up 0.23% to ₹1,62,470, buoyed by the same weakening US labor market signals and the anticipation of Federal Reserve rate cuts. Supply-side concerns also added support, particularly with India’s peak wedding season underway. A major macro factor was the US Department of Interior adding silver, copper, and metallurgical coal to its “critical minerals” list. This important designation could pave the way for Section 232 investigations and future trade restrictions, similar to earlier moves involving copper, raising concerns over supply chain resilience.
Crude Oil Rises Despite Oversupply Fears
Crude oil managed a gain of 0.58% to ₹5,228, primarily driven by the improved market sentiment and demand outlook following the end of the US government shutdown.
The US also imposed sanctions on Russia’s Lukoil, restricting transactions after November 21, adding a geopolitical layer to market dynamics.
However, the broader environment remains heavily pressured by oversupply concerns. OPEC+ continues restoring capacity while non-member producers ramp up output.
The US EIA’s Short-Term Energy Outlook highlighted that U.S. crude production is expected to reach a larger record this year than initially forecast, reinforcing expectations of ample supply. US crude inventories rose sharply by 5.202 million barrels in the latest week, well above expectations, tempering the upside.
