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

Gold climbed up; Crude slips on demand concerns.

GOLD

Gold prices saw an increase as the U.S. dollar and Treasury yields declined due to weaker economic readings, creating uncertainty regarding the Federal Reserve's hawkish policy outlook.

The market had previously anticipated more rate hikes, but future Futures markets, which previously predicted rate cuts in September, now indicate that the first cuts may occur in January.

The widening spread between the 2-year and 10-year U.S. Treasury note yields, reaching levels not seen since 1981, added to concerns of a prolonged rate hike cycle leading to a recession.

Additionally, the decrease in the dollar and poor U.S. manufacturing data further supported gold's performance.

Outlook: We expect gold to trade higher towards 58440 levels, a break of which could prompt the price to move higher to 58510 levels.

CRUDE OIL

Crude oil prices experienced a slight decline of around 1% in the previous session.

In a bid to stabilize prices, Saudi Arabia announced an extension of its voluntary production cut of one million barrels per day (bpd) until August, and Russia confirmed a reduction of 500,000 bpd in oil exports for the same month.

These cuts by OPEC+ countries now account for 1.5% of global supply and total 5.16 million bpd. Despite these measures, concerns about oil demand persisted due to sluggish global factory activity, particularly in China and Europe, along with a further decline in U.S. manufacturing in June.

With the United States observing its Independence Day holiday on Tuesday, markets will remain closed.

Outlook: Given the lacklustre industrial activity in China, the sluggish demand for oil, and central banks' plans to raise interest rates, oil prices are likely to be under pressure.

BASE METALS

Base metals began the first trading day of the second half of the year on a higher note, supported by improved investor sentiment.

However, the near-term global demand outlook for these metals remained subdued, resulting in limited gains. Last week's data indicating a third consecutive monthly contraction in China's factory activity raised hopes for potential stimulus measures.

The property sector, which drives demand for industrial metals, played a significant role in this context. Nevertheless, analysts cautioned that the demand outlook for metals like copper,  remained subdued due to a decline in end-user demand.

The slowdown in China's factory activity growth in June further intensified concerns about sluggish market conditions.

Outlook: We expect copper to trade higher towards 723 levels, a break of which could prompt the price to move higher to 727 levels.

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