Below is Daily Commodity Article by Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One Ltd
Gold inches higher, and crude continues to extend gains
Gold prices bounced back after retracing for 2 straight days. Prices jumped over 1 percent to end that day at $1969.6 per ounce.
Gold prices rose after the Fed raised interest rates; however, it indicated that further increases in borrowing costs might be postponed due to the recent failure of two US banks.
Gold has traditionally been regarded as an inflation hedge, and a low-interest-rate environment makes non-yielding bullion a more appealing bet.
Outlook: e expect gold to trade lower towards 57810 levels, a break of which could prompt the price to move lower to 57260 levels.
Crude prices continue to stand strong, as on Wednesday, the BRENT and NYMEX benchmark indices gained over 2 percent each, adding to the gains from the previous sessions.
Over the last week, as investors awaited the Fed's decision on rate hikes on Wednesday, the bank crises caused volatile trade in riskier assets such as oil.
The central bank's policy-setting committee boosted interest rates by another quarter of a percentage point, increasing its benchmark interest rate to the 4.75% to 5.00% range.
The Federal Reserve Chair Jerome Powell re-stated his commitment to reducing inflation, however, he also signalled that the central bank would pause future rises in borrowing prices given the recent collapse of two US banks.
Outlook: Crude prices are expected to build onto the recent gains, as further rate hikes are likely tobe put on hold by the US central bank.
Copper prices on Wednesday continued to move higher, as a weaker dollar helped the metal to add onto the existing gains. However, other metals too managed toend marginally higher.
Interest rates were increased by another quarter-point by the Fed's policy-making committee, as was widely predicted.
The dollar's decline made it more attractive for non-dollar holders to buy the greenback-priced commodities.
Copper demand in China, the world's top consumer, has been improving, along with post-pandemic economic recovery.
The International Copper Study Group (ICSG) reported in its most recent monthly bulletin that there was a 103,000-tonne surplus on the global market for refined copper in January as opposed to a 10,000-tonne surplus the previous month.
Outlook: We expect copper to trade lower towards 760 levels, a break of which could prompt the price to move lower to 756 levels.
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