IGI Logo

Below is Daily Commodity Article by Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One Ltd

GOLD

Gold's upward trend continued, with the metal gaining 2.3 percent in the first week of the new year.

Bullion prices have risen to near seven-week highs. It was an eventful week, with a slew of economic data due out. Markets awaited US employment and jobs data, as well as the minutes of the US Fed's December policy meeting, which would provide a roadmap for the central bank's tightening.

The Federal Reserve raised interest rates seven times in a row in 2022. Although rising interest rates reduce the appeal of non-yielding assets, gold is nevertheless regarded as an inflation hedge.

Outlook: We expect gold to trade higher towards 56020 levels, a break of which could prompt the price to move higher to 56260 levels.

CRUDE OIL

The winning streak in crude benchmark indices ended this week, as prices finished lower.

The benchmark NYMEX index fell 4.1 percent after reaching its highest level in more than a month. During the week, the index cracked below 5%, marking the worst start to a year in over three decades.

Concerns about a global recession, as well as unstable short-term macroeconomic variables in the world's two largest oil consumers, the United States and China, contributed to the drop in crude prices.

However, the downside remained limited, as lower fuel supplies caused by a winter storm that ravaged the United States at the end of the year resulted in an increase in oil prices.

Outlook: Crude prices likely to stay under pressure, as given weaker macro-economic sentiment weighing over demand for crude.

BASE METALS

The industrial metals had another mixed week, with copper and zinc finishing higher this week.

Copper prices rose on expectations that China's efforts to strengthen its economy would boost metal demand.

However, the metals fell further during the week as a stronger dollar dampened demand expectations due to sluggish growth in top consumer China and other major nations.

Manufacturing activity in China contracted faster in December, as rising COVID-19 infections disrupted production and weighed on demand.

Outlook: We expect copper to trade higher towards 743 levels, a break of which could prompt the price to move higher to 754 levels.

Please refer disclaimer at https://www.angelone.in/ 
SEBI Regn. No.: INZ000161534

Above views are of the author and not of the website kindly read disclaimer