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"Daily Commodity Article" by Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One Ltd

GOLD

Post concluding the week on a lower note, prices of the yellow metal continued to see the weakness on Monday, as it ended with a marginal cut of 0.07 percent to 1710.2$ per ounce.

However, gold prices appear to have recovered from their lows, as Europe is facing the worse energy crisis, after Russia shut a major gas pipeline to Europe, which drove up safe haven demand.

The euro fell to new 20-year lows this week, as the eurozone's economic growth is anticipated to suffer as a result of the crisis. The focus now shifts to a European Central Bank meeting later this week, when the bank is largely expected to begin hiking interest rates.

Gain in the dollar index appeared to have stalled, as it saw a pullback after reaching fresh all-time highs, as traders await more information on the course of US monetary policy. However, prospects of further interest rate hikes by the Federal Reserve kept the dollar stable around 20-year highs.

Outlook:Given Europe's economic uncertainties, the yellow metal may see an uptick. However, the gains may be limited because the US Fed is expected to raise interest rates by 75 basis points

CRUDE

After witnessing a sharp dip in the previous week. crude prices showed some positive signs, as spot Brent ended with marginals gains of 0.20 percent.

After top producer Saudi Arabia and other members expressed concern about the price slide since June despite tight supplies, OPEC+ opted to reverse a 100,000 bpd increase for September.

Given that OPEC+ has been unable to reach its production targets, the cut is largely regarded to be symbolic. This step demonstrates that they are committed to price support, despite the fact that the cut will have no immediate influence on supply/demand dynamics.

Further bolstering prices, the European Union's foreign policy chief indicated he was less optimistic about reviving a nuclear deal with Iran anytime soon, delaying any return of about 1 million bpd of Iranian crude to the market.

Outlook:Oil prices may continue to rise, given the delay in the Iran nuclear deal and further support from the OPEC+, who have slashed the output by 100,000 bpd.

BASE METALS

Metals on Monday witnessed a mixed set of action, as Aluminioum and Lead ended in the negative territory on the LME, whereas, on the MCX, Aluminium and Nickel ended on a lower note.

Chinese government officials indicated on Monday that the country's stimulus measures would likely be increased in the third quarter, after the economy barely expanded in the second quarter.

The world's second-largest economy is facing significant headwinds from this year's COVID-19 lockdowns, as well as a potential energy catastrophe. Copper and aluminium prices have fallen in recent weeks due to China's sluggish property and industrial sectors, which account for a big amount of industrial metals demand.

The US Federal Reserve is anticipated to hike interest rates considerably in the next months in order to reduce inflation, but growing unemployment has traders betting that borrowing costs will not be as high as previously projected.

Outlook:We expect copper to trade higher towards 649 levels, break of which could prompt the price to move higher to 660 levels.

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