Below is Daily Commodity Article by Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One Ltd
On Wednesday, the prices of the yellow metal slipped on the lower side, snapping the recent winning streak, as gold ended at 1773.8$ per ounce.
On Tuesday, gold reached a three-month high as indications of geopolitical unrest increased. However, after the president of Poland stated that the missile that struck his nation was likely a stray Ukrainian defense weapon, tensions appeared to be easing.
The current focus is on how much the US Fed will increase interest rates at its upcoming meeting. The central bank is expected to deliver a 50-basis point increase.
Outlook: We expect gold to trade lower towards 52770 levels, a break of which could prompt the price to move lower to 52560 levels.
Crude prices continue to witness weakness, as both the benchmark crude indices slip 1 or2 percent. The Brent ended 2.23 percent lower and NYMEX ended 1.53 percent lower.
The missile that crashed inside Poland was likely a stray shot by Ukraine's air defenses and not a Russian strike, relieving fears that the war between Russia and Ukraine might spill over the border, lessening the geopolitical tensions that had arisen during the previous sessions.
However, concerns about demand in the world's top oil importers increased as the number of COVID-19 cases increased in China.
Outlook: The second-largest crude importer, China, which has a weak demand outlook, will keep crude prices under pressure.
On Wednesday, the industrial metals came under pressure as almost all the metals finished the day lower.
On the other hand, copper prices fell further as a result of poor Chinese economic numbers, low demand, and a surplus of supply.
In anticipation of China abandoning its zero-COVID policy and a slowdown in US interest rate increases, which would boost economic growth and metals demand, prices had risen to a five-month high.
According to data released on Wednesday, new home prices in China decreased at their fastest rate in more than seven years in October, underscoring deepening contraction in the construction sector.
Outlook: We expect copper to trade lower towards 682 levels, a break of which could prompt the price to move lower to 672 levels.
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