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

GOLD

Gold prices on Tuesday inched marginally higher, as it ended at 1854.3$ per ounce.

While US inflation figures issued on Tuesday increased expectations that the Federal Reserve will continue tightening monetary policy, the minor increase in gold came on the back of a weakening dollar.

Following a 6.5% increase in December, the consumer price index grew by 6.4%, which was the lowest advance since October 2021.

Fed officials said that in order to combat inflation, the US central bank would need to keep gradually raising interest rates. They also suggested that higher borrowing costs may result from sticky price pressures brought on by a strong labour market.

Investors are put off from investing in non-yielding assets like gold by rising interest rates.

Outlook: As long as the Fed keeps raising interest rates, the demand for the yellow metal could be constrained, which would likely put downward pressure on gold prices.

CRUDE OIL

Crude prices after witnessing gains On Monday, slipped during the following session, as both benchmark crude indices ended on a lower note.

As industry data indicated a significantly larger-than-anticipated rise in US crude inventories, oil prices declined.

According to market sources citing American Petroleum Institute data on Tuesday, the stockpiles increased by around 10.5 million barrels during the week ending February 10.

The US Department of Energy's announcement this week to sell 26 million barrels of oil from the country's strategic reserve, which is already at its lowest level in about four decades, has had an impact on crude prices.

Outlook: The continued gloom of demand uncertainty combined with rising stock prices would restrain any gains in crude prices.

BASE METALS

The metals pack on Tuesday, argely ended on a lower note, as aluminium, zinc, nickel ended the day marginally lower.

US consumer prices data for January showed the smallest annual increase since late 2021, raising hopes of less aggressive interest rate hikes by the Fed, initially spurring a weaker dollar and a rally in metals.

Copper prices lost most of their gains on Tuesday as the dollar strengthened after Federal Reserve officials warned that interest rates would have to remain firm for longer.

Outlook: The dollar's resurgence and the expectation of further rate increases in the foreseeable future would keep metal prices under pressure.

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