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

Gold continues its slump; Crude prices extend its gains.

GOLD

Gold prices slipped as investors awaited U.S. inflation data for insights into the Federal Reserve's monetary policy. The upcoming U.S. consumer price index (CPI) data is projected to reveal a modest rise in July's annual inflation to 3.3%.

Despite anticipation of a stable Fed policy in September with only a 13.5% chance of a rate increase, lower interest rates diminish the opportunity cost of holding non-yielding gold and influence the dollar.

Amidst this, a minor dip in the dollar, triggered by China's deflation and prospects of increased stimulus, provided some relief to gold's performance.

Outlook: We expect gold to trade lower towards 58700 levels, a break of which could prompt the price to move lower to 58560 levels.

CRUDE OIL

Oil prices surged to new highs in the previous session, propelled by a tug-of-war between concerns over China's economic performance and favorable factors such as substantial U.S. fuel stockpile declines and production cuts by Saudi Arabia and Russia.

While Chinese data revealed an 18.8% drop in crude oil imports for July, signaling economic challenges and weakening demand, supportive government data emerged.

Saudi Arabia's decision to prolong its 1 million barrels per day production cut into September, alongside Russia's 300,000 bpd oil export reduction, contributed to price support.

Investors also eyed July's U.S. Consumer Price Index for further market direction.

Outlook: We expect crude to trade higher towards 7040 levels, a break of which could prompt the price to move higher to 7120 levels.

BASE METALS

Copper prices rebounded from a one-month low, driven by China's deflation data, which ignited expectations for increased stimulus in the leading global metals market.

The consumer sector's deflation and factory-gate price declines in July intensified calls for policy action in Beijing.

Furthermore, a retreat in the dollar index, along with Chinese banks' dollar selling, propelled industrial metals as it lowered the cost of dollar-denominated metals for holders of alternative currencies, underpinning the overall performance of metals.

Outlook: We expect copper to trade lower towards 723 levels, a break of which could prompt the price to move lower to 716 levels.

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