"Daily Commodity Article" by Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One Ltd
After posting a gain of 0.4 percent during the previous week on the back of uncertainties surrounding Europe, gold prices extended the gaining streak on Monday, as it gained 0.47 percent.
The weaker dollar helped the price of the yellow metal hold steady to reach two-week highs ahead of US inflation data that may give hints about the Federal Reserve's interest rate hike plans.
The dollar index was hovering close to its lowest level since August 26, making gold priced in dollars more affordable for overseas buyers.
The Fed will likely increase interest rates by another 75 basis points the following week and keep their target rate unchanged for an extended period of time, which will raise the opportunity cost of keeping non-yielding bullion and strengthen the currency.
Outlook: Gold prices might continue to remain elevated given the economic uncertainties. However, the gains may be capped given the Us Fed is likely to hike its interest rates.
On Monday, crude prices witnessed an uptick, as both the benchmarks ended on a higher note, with brent witnessing a 3.58 percent gain, whereas, NYMEX gained 1.14 percent.
Crude prices somewhat recovered from their recent lows as a result of concerns about a supply shortage ahead of the Northern Hemisphere's winter heating season.
Because of the uncertainty brought on by the crisis in Russia and Ukraine, crude prices have increased this year. With Russia cutting back on gas shipments to Europe in response to Western sanctions, energy prices have also skyrocketed.
In order to retaliate against Russia for the invasion of Ukraine, the G7 countries will impose a price restriction on Russian oil. However, they will also take steps to ensure that oil can still reach developing countries.
Outlook: We expect crude to trade lower towards 6870 levels, a break of which could prompt the price to move lower to 6730 levels.
The base metals pack on Monday traded on a positive note, except for Aluminium which ended on a lower note on the LME as well as MCX. However, Nickel was the top performing metal.
The weaker dollar helped drive up copper prices on Monday, but investors were waiting for data from major user China to get a better read on demand trends.
Since hitting 20-year highs last week, the price of the dollar has declined relative to a basket of other currencies, making the dollar-denoted metals more affordable for customers using other currencies when the dollar is weaker.
Outlook: We expect copper to trade higher towards 672 levels, a break of which could prompt the price to move higher to 683 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