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

GOLD

The yellow metal concluded the recent week on a lower note, extending the weakness seen from the previous week. This week's decline in gold was the largest since November.

As markets anticipated the US Federal Reserve's policy decision and those of other central banks across the world, which were on the route to raising interest rates, gold prices started off on a negative note.

As the US central bank increased interest rates by an anticipated 25 basis points, bringing the total rate to 4.75%, the Fed slowed down its rate hike trajectory.

After hiking interest rates for over a year on a higher note, the Fed trimmed its rate hike to just a quarter of a percentage point.

Outlook: Gold prices are expected to stay under pressure given the Fed's recent rate hike and a likely resurgent dollar that would cap the upside in the yellow metal.

CRUDE OIL

Another week of underperformance for crude prices, as the benchmark NYMEX index fell about 6%, adding to the prior week's underperformance. Prices decreased for the second week in a row.

Crude prices started the week lower as pressure mounted from a combination of factors, including ongoing uncertainty of Russian oil supply to the global market in defiance of an EU embargo and a G7 price cap imposed over its invasion of Ukraine and threats of more interest rate increases that could slow the global economy.

The Federal Reserve hiked the interest rate by a quarter of a percentage point on Wednesday and promised to continue hiking it further as part of its continuous fight against inflation, which was another factor weighing on oil prices.

Outlook: We expect crude to trade lower towards 6000 levels, a break of which could prompt the price to move lower to 5910 levels.

BASE METALS

It was a week for the base metals to forget, as all the metals ended on a lower note, with zinc being the top-losing metal.

Speculators piled in after China lifted its COVID-19 limitations, sending copper prices to a seven-month high earlier this month.

However, worries over the demand outlook dominated the mood. Due to the US Federal Reserve's hawkish posture, the dollar started to rise, increasing the cost of industrial metals for buyers using other currencies.

The manufacturing purchasing managers' index came in weaker than anticipated in January, which caused China's factory activity to contract more slowly than it did in December.

Pressure increased further when lower-than-expected data revealed that US manufacturing shrank even further in January as higher interest rates hindered consumer demand.

Outlook: We expect copper to trade lower towards 763 levels, a break of which could prompt the price to move lower to 753 levels.

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