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Published on 29/11/2022 11:29:11 AM | Source: Angel One Ltd

Commodity Article : Gold prices post concluding the recent week with gains Says Prathamesh Mallya, Angel One

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GOLD

Gold prices post concluding the recent week with gains, slipped on Monday, as the yellow metal retreated from more than one-week highs.

The pullback occurred as the dollar spiked due to hawkish remarks made by US Federal Reserve officials who reiterated their commitment to fighting inflation.

After hitting a near two-week low, the US dollar started to rise. A stronger dollar makes greenback-priced metals more expensive for other currency holders. On the other hand, the Benchmark US 10-year bond yields also edged up from a near two-month low.

However, US Unemployment numbers are set to be released within this week, which will decide the mood around Fed's policy decision in the month of December.

Outlook: We expect gold to trade lower towards 52300 levels, a break of which could prompt the price to move lower to 52130 levels.

 

CRUDE

The benchmark NYMEX prices have retraced to their lowest level since December 2021 on concerns that protests in China against Covid-19 lockdowns will dent demand for oil.

Since June, the price of oil has plummeted by around 35% globally as a result of sluggish demand in China due to severe coronavirus limitations and warning signs of impending recession from some of the world's largest nations.

Despite the OPEC+ cutting output by 2 million barrels per day starting this month—their largest reduction since the start of the pandemic—global oil prices continue to have dropped.

As the West seeks to reach an agreement on a price restriction on Russian oil, the markets remain uneasy. The cap would restrict Moscow's earnings without significantly hurting the world's oil supply. 

Outlook: We expect crude to trade higher towards 6470 levels, a break of which could prompt the price to move higher to 6590 levels.

 

 

BASE METALS

The metals pack came under pressure as protests took place in China over its stringent COVID restrictions that rose for a third day and had spreaded to several cities.

Rising stockpiles in LME registered warehouses, which have climbed by 17% since Nov. 10 to 91,200 tonnes, have recently put pressure on copper prices.

However, Copper prices fell on Monday as concerns about demand in top consumer China were reinforced by protests against the country's strict COVID-19 curbs,

The Chinese government has implemented a number of policies in an effort to boost GDP, but the recovery has been hampered by COVID problems and a recession in the world economy.

Outlook: We expect copper to trade lower towards 668 levels, a break of which could prompt the price to move lower to 658 levels.

 

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