Commodity Article : Gold holds near one-week lows, Crude continues to settle lower Says Prathamesh Mallya, Angel One
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Below is Daily Commodity Article by Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One Ltd
Gold holds near one-week lows, Crude continues to settle lower
GOLD
Gold prices on Wednesday ended nearly unchanged, as the yellow metal held near one-week lows, ending at 1813.6$ per ounce.
The opportunity cost of storing non-yielding bullion increased as a result of anticipation for higher interest rates in the US.
After a hint from Federal Reserve Chair Jerome Powell that interest rates would likely stay higher for longer than anticipated, the dollar reached multi-month highs against the majority of other major currencies.
In his hearing before the Senate Banking Committee, US Fed Chairman Powell stated that if the economy grows too quickly, the US central bank will be ready to reaccelerate the pace of rate hikes.
Outlook: We expect gold to trade lower towards 54650 levels, a break of which could prompt the price to move lower to 54460 levels.
CRUDE OIL
Post the 2 percent cut witnessed the other day, benchmark crude indices extended the weakness further, as Brent and NYMEX end with a cut over 1 percent each.
Worries that more aggressive US interest rate increases would hinder economic development and, as a result, reduce oil demand were in conflict with a larger-than-expected reduction in US crude stocks.
After remarks by US Federal Reserve Chair Jerome Powell that the central bank will probably need to raise interest rates more than expected in response to recent positive data, The 3% cut on Tuesday was the largest daily fall since early January.
Outlook: As a result of expectations that the US Federal Reserve will continue raising interest rates, coupled with rising crude stocks, prices are anticipated to remain under pressure
BASE METALS
On Wednesday, the base metals pack saw positive momentum, as all the metals inched higher, except for LME Nickel, which ended marginally lower.
The price of copper increased after falling in the previous sessions due to evidence of restricted supply and a weaker dollar, making the commodity more appealing to buyers using foreign currencies.
As investors prepared for the possibility of higher rates lasting longer as a result of Federal Reserve Chairman Jerome Powell's comments on Tuesday and Wednesday, the dollar moderately declined from three-month highs set earlier in the day.
After three months of protests that have impeded exports, mines in Peru, the second-largest producer of copper in the world, are now beginning to transfer their copper concentrate to ports for export.
An operating agreement for a significant mine was reached between the government of Panama, another country that produces copper, and First Quantum Mines of Canada.
Outlook: We expect copper to trade lower towards 744 levels, a break of which could prompt the price to move lower to 736 levels.
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Quote on Silver : Silver price falls in recent weeks Says Prathamesh Mallya, Angel One
