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After witnessing a significant bounce back from the 5-month lows, gold prices continued to build up on the momentum from the previous week, as the yellow metal registered yet another gains of 1 percent.This surge has seen

prices now at a three-week high due to a combination of factors. A weakening U.S. dollar and subdued bond yields have made gold more attractive to investors.

Federal Reserve Chair Jerome Powell's comments on potential interest rate hikes to combat inflation have added uncertainty to the market, which kept the gains in check.

Concerns over the U.S. labor market, marked by reduced job openings and lower consumer confidence, have raised doubts about the Fed's rate hike plans.

Investors are closely monitoring these economic indicators as gold's appeal may increase if the Fed takes a more cautious approach to rate hikes.

In summary, gold's recent performance is tied to a weaker dollar, subdued bond yields, and uncertainties surrounding the Fed's rate decisions, with upcoming data releases likely to impact its future trends.

Outlook: We expect gold to trade higher towards 59530 levels, a break of which could prompt the price to move higher to 59580 levels.

CRUDE

Crude prices which witnessed an extended round of weakness have come halt, as the benchmark prices this week snapped the losing streak and concluded on a higher note, recouping some of the loses from the previous weeks.

However, prices surged due to significant U.S. crude inventory depletion and Gulf of Mexico hurricane concerns. A weaker U.S. dollar, resulting from reduced expectations of interest rate hikes after soft job data, boosted demand for dollar-denominated oil.

Furthermore, recent momentum in oil prices is attributed to decreased U.S. supply and concerns over global disruptions. Tighter crude supplies in the U.S. and geopolitical events, like a military coup in Gabon, raised worries of potential oil supply disruptions.

Saudi Arabia's expected extension of a voluntary 1 million barrels per day oil cut into October, aligned with OPEC+ efforts, supported prices.

Concerns over potential U.S. interest rate hikes and worries about China's economic rebound have limited the upside in crude. Federal Reserve Chair Jerome Powell's hints at further rate hikes to combat inflation have added to this cautious sentiment.

Outlook: We expect crude to trade higher towards 7140 levels, a break of which could prompt the price to move higher to 7200 levels.

BASE METALS

Building onto the gains from the past week, the base metals pack pulled yet another week where it ended on a high note, with LME Lead and LME Aluminium being the top gainers.

LME copper also saw a significnt uptick, on the back of Beijing's stock market measures that were aimed at stimulating markets in the midst of a prolonged post-pandemic recovery.

China's move to reduce stock trading stamp duty aimed to boost markets but had a varied impact.

The strong U.S. dollar applied pressure on copper prices, echoing Federal Reserve Chair Powell's stance on inflation and rates.

However, concerns about potential U.S. rate hikes limited these gains.

Outlook: We expect copper to trade higher towards 743 levels, a break of which could prompt the price to move lower to 745 levels.

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