Below is Commodity Article by Mr. Saish Sandeep Sawant Dessai, Research Associate- Base Metals, Angel One Ltd
On Monday, gold ended the day on a positive note, gaining 0.37 percent, ending at 1771.7$ per ounce.
As the dollar and the US treasury witnessed a dip, demand for the safe-haven commodity increased as the price of gold approached a four-week high, extending its winning streak.
When compared to its rivals, the dollar dropped to a level that is near one month low, making greenback-denominated gold less expensive for other currency holders.
Benchmark US 10-year Treasury yields dropped to a four-month low, reducing the opportunity cost of holding non-interest-bearing gold.
Outlook: We expect gold to trade lower towards 51080 levels, a break of which could prompt the price to move lower to 50660 levels.
Crude prices on Monday witnessed a sharp pullback, as both the benchmarks, Brent and NYMEX ended with a cut of 5.35 and 4.80 percent respectively.
Oil prices decreased post ending the week on a strong note as investors grew concerned about global oil demand due to dismal industrial statistics in several nations and worries about a future global recession.
According to surveys released on Monday, factories in the United States, Europe, and Asia failed to maintain momentum in July due to slowing production in China and waning worldwide demand. These dismal economic assessments suggested a downturn that would lead the US central bank to scale back its intentions to tighten monetary policy.
Outlook: We expect crude to trade lower towards 7320 levels, a break of which could prompt the price to move lower to 7180 levels.
The base metals pack witnessed a mixed set of action on Monday, as Lead and Zinc managed to end on a higher note, while others ended lower on the LME. Similarly on the MCX, except for Aluminium and Nickel, the other metals ended on a positive note.
A weaker dollar helped copper prices rise to a four-week high on Monday, but prices witnessed a pullback later in the day as manufacturing data released a global slowdown, a key source of metals demand.
Prices of the metal used in power and construction tumbled from a record high in March as rapid increases in interest rates combined with coronavirus lockdowns in China stifled economic growth.
As the dollar slipped to a one-month low, making dollar-priced metals more affordable for buyers using other currencies.
Outlook: We expect copper to trade lower towards 640 levels, a break of which could prompt the price to move lower to 630 levels.
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