Weekly Base Metal Outlook : Demand for the metals would be limited by the strong dollar index Says Mr. Saish Sandeep Sawant Dessai, Angel One
Below is Weekly Base Metal Write Up by Mr. Saish Sandeep Sawant Dessai, Research Associate- Base Metals, Angel One Ltd
Base Metals Report
The base metals pack came under pressure, as all the metals ended on a lower note, with Lead continuing to move lower week on week.
Increasing consumer demand mood among major consumers in China, which pushed metals prices higher the previous week, was countered by the US Federal Reserve Chair's hawkish remarks, as the central bank is expected to raise interest rates more than initially anticipated to control inflation.
A three-month high for the dollar against a basket of currencies, as a result of the comments, makes it less tempting for holders of other currencies to purchase the commodity priced in dollars.
Jerome Powell's remarks have increased the likelihood that higher rates will last for a longer period of time, therefore investors were getting ready for that eventuality as the dollar marginally dropped from three-month highs.
OUTLOOK: Demand for the metals would be limited by the strong dollar index, which is at 3-month highs due to expectations of a Fed rate hike
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