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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 Monday began the week on a lower note, continuing the weakness from the previous sessions, as prices settled 0.27 percent lower at 1787.4$ per ounce.

The outlook for the non-yielding bullion continued to be clouded by a stronger dollar and persistent concerns about additional rate increases from the U.S. Federal Reserve, which put pressure on the price of yellow metal.

The likelihood of a higher Fed rate could limit gold's upward movement, as Fed Chair Jerome Powell stated last week, the US central bank would continue to raise interest rates in order to combat inflation in 2019.

Despite being regarded as an inflation hedge, gold seems to have a higher opportunity cost when interest rates are higher.

Outlook: We expect gold to trade lower towards 53950 levels, a break of which could prompt the price to move lower to 53730 levels.

CRUDE OIL

Crude prices post concluding the previous week on a higher note continued the strong momentum into the new week, as both the benchmark crude indices ended higher. Brent gained 2.42 percent, whereas NYMEX gained 1.21 percent.

A weakened currency and a US commitment to replenish its Strategic Petroleum Reserve kept crude prices underpinned.

The impact of the rising COVID-19 cases in China, the world's top oil importer, is uncertain, thus the upside appears to be limited.

The impact of an increase in COVID-19 cases on economic activity after the country relaxed pandemic control measures is another factor weighing on crude. China's business confidence dropped to its lowest level since January 2013, highlighting the impact of this development.

Outlook: Crude is likely to be under pressure given the rising number of Covid-19 cases in China, which would further hamper the demand.

BASE METALS

The base metals pack on Monday witnessed a mixed session after concluding the recent week on a lower note. Metals such as Zinc was the top losing metal on the MCX, down over 1 percent.

Metals like copper were able to hang onto their gains owing to a falling dollar and expectations of increased demand in China as a result of government-promised economic stimulus measures.

The Chinese government announced that it would intensify its efforts to stabilise the country's economy, and the central bank is soon anticipated to loosen monetary policy.

Outlook: We expect copper to trade lower towards 697 levels, a break of which could prompt the price to move lower to 687 levels.

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