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Below is Gold Article by Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One Ltd

Dollar weighs on Gold; Crude extends gains

GOLD

After witnessing a rebound from a three months low, gold prices gave up the steam and ended on a lower note. Gold prices declined on Monday in thin trading due to the rebound of the US dollar, which had reached a one-month low on Friday. 

The stronger dollar made gold less attractive to buyers using other currencies. The market is eagerly anticipating US Federal Reserve Chair Jerome Powell's upcoming testimony on Capitol Hill, as it could provide insights into future interest rates. 

Investors likely feel that rising real interest rates and falling inflation may diminish gold's appeal as a non-yielding asset and strengthen the dollar. 

The European Union's inflation data and the Bank of England's expected rate increase also contribute to the uncertainty surrounding gold's performance.

Outlook: We expect gold to trade lower towards 58910 levels, a break of which could prompt the price to move higher to 58800 levels.

CRUDE OIL

On Monday, crude continued to show strength, as prices extended the winning momentum from the previous week. 

Crude oil faced challenges on Monday as concerns over the faltering Chinese economy and skepticism about stimulus measures weighed on market sentiment. 

China is expected to implement its first lending benchmark cuts in 10 months following weaker economic data. 

The anticipation of US Federal Reserve Chair Jerome Powell's testimony later in the week added to market uncertainty. 

On the supply side, Iran's crude exports and output reached new highs despite US sanctions. Furthermore, the European Union awaits inflation data, and the Bank of England is likely to raise rates. Interest rate hikes can dampen oil demand by reducing spending.

Outlook: We expect crude to trade higher towards 5990 levels, a break of which could prompt the price to move higher to 6090 levels.

BASE METALS

The base metals pack lost momentum on Monday post showing strength in the previous 2 weeks, with Aluminium and Zinc being the top losinng metals. 

Base metals saw a mixed session on Monday, as copper prices that reached a more than five-week high on Friday, retreated after data revealed growing inventories on the LME, indicated an improved supply situation.

Despite this setback, copper has rebounded nearly 10% since reaching a six-month low and has recorded a higher close this week, marking its third consecutive weekly gain. 

Furthermore, copper received support from news of a fire at Boliden's Ronnskar smelter in Sweden, leading to a declaration of force majeure.

Outlook: We expect copper to trade lower  towards 725 levels, a break of which could prompt the price to move higher to 721 levels

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