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

Gold breaks below $1900; Crude oil slips on demand concerns.

GOLD

Gold's performance weakened recently, slipping below $1,900 per ounce, its lowest since end-June.

This decline can be attributed to rising 10-year U.S. Treasury yields, which reached a 10-month high, making them more appealing than non-interest bearing gold.

Additionally, U.S. retail sales surpassing expectations indicate ongoing economic expansion in Q3 and potential recession avoidance.

Amidst expectations of prolonged higher U.S. interest rates, bond yields rose, pushing gold prices near six-week lows.

In the UK, gold priced in pounds hit a July low due to a strengthening sterling prompted by robust British basic wage growth.

Outlook: Gold prices continue to face challenges from rising U.S. Treasury yields, strong retail sales, and expectations of higher interest rates.

CRUDE OIL

Crude oil prices slid by 1% as weak economic data from China, the largest oil importer globally, outweighed diminishing U.S. stockpiles.

Despite declining U.S. stockpiles, China's disappointing July economic activity figures – including retail sales, industrial output, and investment – have become a major market driver, raising concerns about a prolonged growth slowdown.This data suggests challenges for China, the top oil importer, to achieve its 5% growth target without additional fiscal stimulus.

Beijing's recent policy rate cuts aimed at boosting economic activity are being supplemented by calls for further stimulus measures to invigorate the economy and sustain demand for commodities like oil.

Moreover, crude inventories at the Cushing hub are projected to reach their lowest point since April.

Outlook: We expect crude to trade lower towards 6760 levels, a break of which could prompt the price to move lower to 6660 levels.

BASE METALS

Base metals faced downward pressure due to China's slowing industrial output growth and decreasing property investment; however, the possibility of additional supportive policies could counter excessive declines.

A weaker U.S. dollar provided some support, making dollar-priced metals more appealing to non-dollar buyers.

Despite this, the outlook for metals remains influenced by China's economic situation, while stronger U.S. retail sales point towards ongoing economic expansion.

Notably, other growth-dependent metals like nickel and zinc also experienced declines, with signs of increased zinc arrivals at LME-registered warehouses.

Outlook: The base metals market faces pressure from China's weakening demand outlook, but potential supportive measures and a weaker U.S. dollar may counterbalance declines.

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