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Below is Gold Article by Mr. Prathamesh Mallya, DVP Research, Non-Agro Commodities & Currency, Angel One Ltd.     

Gold at 3-week lows; Crude bounces back

GOLD

Gold steadied as euro zone business activity decline prompted safe-haven flows, but remained near three-week lows due to a stronger dollar and higher bond yields.

ECB's cautious stance, falling producer prices, and robust U.S. data affected sentiment.

Gold fell 0.5% on Wednesday post strong private payrolls, increasing Fed rate hike expectations.

Bank of England's rate raise and anticipation of U.S. non-farm payrolls report influenced markets. Rising interest rates and dollar strength tempered gold's appeal.

Outlook: We expect gold to trade lower towards 59100 levels, a break of which could prompt the price to move lower to 58940 levels.

CRUDE OIL

Crude oil benchmarks, Brent and WTI, rebounded after a 2% dip, resulting in a 0.4% weekly gain for Brent and a 1.4% weekly increase for WTI.

This marks their sixth consecutive week of gains, the longest streak this year. Saudi Arabia's extension of a 1 million bpd production cut through September precedes an OPEC+ meeting.

The meeting is expected to maintain the existing output policy. Despite supply cuts, concerns persist due to tight U.S. labor markets, a sluggish service sector, and deteriorating euro zone business activity.

Bank of England's rate hike further adds to demand worries, influencing crude's performance.

Outlook: We expect crude to trade higher towards 6870 levels, a break of which could prompt the price to move higher to 6950 levels.

BASE METALS

London copper prices managed to recover on Thursday following a recent sell-off triggered by the U.S. credit rating downgrade.

However, gains were constrained by the stability of the dollar. The outlook for demand of this metal, vital for power, construction, and transportation industries, was clouded due to the U.S. credit downgrade by Fitch and ongoing economic challenges in China, a major consumer.

Additionally, the robust dollar added further pressure, diminishing the appeal of the dollar-denominated commodity.

Outlook: Uncertainties related to the postponed stimulus package are expected to exert downward pressure on metal prices, ultimately constraining potential gains within the metal markets.

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