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

Gold continues to settle lower; Crude maintains the positive momentum

GOLD

Gold prices extended the cuts from the previous week, as it ended over 1 percent lower.

Gold's weekly performance was influenced by a series of factors including U.S. economic data and central bank sentiments.

The strengthening U.S. dollar and rising Treasury yields contributed to a dip in gold prices. Eyes were on the U.S. consumer price index (CPI) data, which came in slightly higher than the previous reading at 3.3%.

This might provide further insights into potential rate hikes, as gold, a non-yielding inflation hedge, can lose appeal during such periods.

The metal's performance remained responsive to fluctuations in U.S. interest rates, underlining the ongoing impact of monetary policy on its outlook.

Outlook: We expect gold to trade lower towards 58700 levels, a break of which could prompt the price to move lower to 58580 levels.

CRUDE OIL

Crude prices continue to end on a high, with the latest week concluded, the benchmark NYMEX gained 1.5 percent.

Initial declines of around 1% were driven by concerns over weaker demand from China and the U.S.

Despite this, oil prices surged in the subsequent sessions, with Saudi Arabia's extension of a voluntary production cut and Russia's export reduction adding support.

OPEC+ supply reductions and hopes of Chinese demand recovery contributed to the overall positive sentiment.

However, China's July crude imports registered a significant drop, reflecting economic challenges.

Outlook: With major producing nations continuing to cut their output, it is anticipated that crude prices will maintain higher levels.

BASE METALS

After giving up the gains in the previous week, the base metals pack remained under pressure for the following week too, adding up to the loses, as all metals ended lower.

Copper prices initially dropped, driven by concerns over industrial metal surpluses, weak demand in China, and a stronger dollar.

However, copper's losses moderated as a Federal Reserve official hinted at a potential pause in interest rate changes. The market was sensitive to Chinese economic data, as deflation and factory-gate price declines intensified calls for stimulus.

These lingering post-pandemic recovery issues in key consumer China pushed copper towards a second weekly decline.

Outlook: We expect copper to trade lower towards 719 levels, a break of which could prompt the price to move lower to 715 levels.

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