Below is Daily Commodity Article by Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One Ltd
Gold prices on Tuesday continued the winning streak as prices steadied near 3-month highs and ended 0.36 percent higher to close at 1778.3$ per ounce.
Bets on lesser rate increases were boosted by signs of slowing US inflation, while concerns on the geo-political front led to some demand for safe-haven assets.
The upside however remained capped, as the dollar appreciated.
Outlook: We expect gold to trade lower towards 52370 levels, a break of which could prompt the price to move lower to 52100 levels.
The benchmark crude indices on Tuesday ended on a mixed note, as Brent ended 1.37 percent lower and NYMEX ended 1.22 percent higher.
The demand concerns continue to grow in the world's top crude importer, as COVID-19 cases in China continued to climb, outweighing the concerns about an escalation of geopolitical tensions and tighter oil supply.
The up move in crude prices came on the back of the temporary suspension of the oil supply to parts of Eastern and Central Europe via a section of the Druzhba pipeline. An explosion in a town in eastern Poland caused this disruption, sparking worries that the conflict in Ukraine may spread beyond its boundaries.
Outlook: Weak demand outlook from the second largest crude importer China will keep prices under pressure. However, supply disruption on the Druzhba pipeline might limit the downside risk crude.
The metals pack continues to witness a mixed set of action, as metals such as Nickel and Lead ended on a higher note on the LME and on the MCX.
Given the ambiguity surrounding China's demand for metals and the accompanying geopolitical risk, copper prices have been under pressure. COVID-19 cases kept rising in numerous Chinese cities, including Beijing, the nation's capital, and Guangzhou, in the south.
A continuing decline in the US dollar sent some support to metal prices making dollar-priced metals more affordable to buyers using other currencies.
Outlook: We expect copper to trade lower towards 686 levels, a break of which could prompt the price to move lower to 676 levels.
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