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Below is Commodity Article by Mr. Saish Sandeep Sawant Dessai, Research Associate- Base Metals, Angel One Ltd

GOLD

Prices of the yellow metal ended on a flat note, but with a negative bias, down 0.06 percent to settle at 1809.1$ per ounce. This continued the weakness seen in gold prices after the previous week's negative closing. 

The appeal of non-yielding metal was reduced post a rise in U.S. Treasury yields from their one-month lows last week, and a strong dollar added to the pressure as it remained stable at higher levels. As a result, gold prices slightly declined on Monday.

The likelihood of interest rate hikes from central banks attempting to combat inflation caused gold prices to drop in the previous session. The potential cost of storing non-yielding metal increases when interest rates rise.

Outlook: We expect gold to trade higher towards 52550 levels, a break of which could prompt the price to move lower to 52950 levels.   

CRUDE

As Norway is anticipated to disrupt oil and gas production, citing workers who went on a strike and demanded wage increases on account of rising inflation, which comes amid high oil and gas prices.

With supplies to Europe being especially scarce after Russian export restrictions, Brent Crude continued to rise on Monday, ending the day with gains of 2.71 percent. Nearly one-fourth of Norway's gas output and roughly 15% of its oil output could be shut off as a result of a further planned escalation.

Since statewide protests have put an end late last week thanks to a compromise between the government and protesters, Ecuador's oil output has increased by around 90%. In June, protests broke out in Ecuador to call for reduced fuel costs and restrictions on the growth of the mining and oil industries. At least eight people died as a result of the protests, which also severely damaged the nation's oil production.

Interest rate hikes also loom over global economies to cool the rising inflation.

Outlook: Crude prices are expected to remain elevated as the supply tightness is keeping the prices afloat.

BASE METALS

Base metals pack witnessed a mixed set of action during Monday's session, as all the metals ended on a positive note on the LME, except for Copper. Whereas, the MCX, Copper, and Nickel ended on a negative note.

On Monday, copper prices hit a 17-month low as concerns about demand, slowing global manufacturing activity on the back of new COVID limitations in top consumer China. The metal used in building and energy plummeted to its lowest level since February 2021.

As coronavirus clusters appeared, cities in eastern China strengthened COVID-19 regulations, posing further danger to the nation's economic recovery under the government's strict zero-COVID policy.

In many nations, including the United States, the Federal Reserve is anticipated to give another 75 basis-point rate hike this month.

Outlook: US Fed rate hike anticipation is likely to limit the gains in metals.

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