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GOLD

Gold prices rebounded on Monday, recovering from a recent three-month low, driven by concerns over the political unrest in Russia.

The attempted Russian incursion and the possible the destabilization of President Vladimir Putin's rule increased the demand for gold as a safe haven.

Although the market remains concerned about the future, with Putin's power appearing to wane, geopolitical stories bolstered the precious metal.

Due to hawkish remarks from Federal Reserve officials signalling probable interest rate hikes to contain persistent inflation, gold fell nearly 2% the previous week, reaching its lowest level since mid-March.

Outlook: Gold prices are likely to see an uptick, given the political unrest in Russia. However, the rival safe haven dollar might cap the upside gains.

CRUDE

Oil prices recorded a second consecutive session of gains on Tuesday, as the market weighed concerns over political instability in Russia and potential supply disruptions against worries about global demand.

The avoided conflict between Moscow and the Russian mercenary company Wagner resulted in the evacuation of highly armed mercenaries from Rostov, reducing immediate fears of a disruption in Russian oil supply.

However, the episode called into question President Vladimir Putin's grip on power. Investors were already aware of lower supplies due to Saudi Arabia's commitment to reduce output beginning in July.

Oil prices had fallen by almost 2% the previous week, mostly due to fears that future interest rate hikes by the US Federal Reserve would decrease oil consumption, particularly given China's dismal economic recovery.

Outlook: We expect crude to trade higher towards 5850 levels, a break of which could prompt the price to move higher to 5930 levels.

BASE METALS

Base metal prices were under pressure on Monday, with only LME copper prices inching up despite headwinds from a firm dollar and concerns over global economic growth.

The decline in copper stocks held by the LME, coupled with disruptions caused by rainfall in Chilean mining operations, supported the copper market.

Other base metals, on the other hand, were under pressure as macroeconomic data continued to disappoint. German business morale fell for the second month in a row, backed by a drop in German manufacturing, while S&P decreased its economic growth forecast for China.

The upcoming official PMIs from China are expected to provide insight into the demand outlook from the world's largest consumer of metals.

Metal prices fell further as investors remained skeptical of China's large-scale economic stimulus.

Outlook: We expect copper to trade lower towards 711 levels, a break of which could prompt the price to move lower to 707 levels.

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