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

GOLD

Gold prices on Wednesday climbed higher to two-week highs, as the dollar and US bond yields slipped on expectations the Federal Reserve will slow down its aggressive rate-hike stance.

Gold is now less expensive for holders of other currencies as the dollar's losses against its competitors reached a more than one-month low.

Focus now switches to US GDP data, which is due today, followed by US core inflation numbers on Friday, in order to gain more clarity on the Fed's rate rise path.

Outlook: We expect gold to trade higher towards 50970 levels, a break of which could prompt the price to move higher to 51200 levels.

CRUDE

The benchmark crude indices on Wednesday ended higher, as Brent and NYMEX ended with 1.27 and 3.04 percent gains respectively. The up-move in crude was driven by record US crude exports and a weaker dollar.

According to weekly government data released on Wednesday, US oil stocks increased by 2.6 million barrels last week, and crude exports reached a record-high 5.1 million barrels per day.

The dollar's decline added to support since it makes oil priced in other dollars less expensive for holders of other currencies.

Russia's oil imports are expected to be restricted by Europe next month, along with Russian shippers from the global shipping insurance industry.

Outlook: We expect crude to trade higher towards 7370 levels, a break of which could prompt the price to move higher to 7480 levels.

BASE METALS

The industrial metals on Wednesday climbed higher, as all the metals ended on a positive note, with aluminum being the top gainer from the lot.

The sharp rise in the prices of the metals came on the back of expectations that the US Federal Reserve would slow down the pace of rate hikes. The dollar eventually slipped, as a result making commodities priced in dollars more affordable for buyers holding other currencies.

The week's dismal US economic data confirmed the perception that the Federal Reserve would loosen monetary policy, reducing the damage to the economy and improving the demand for commodities. Low metal stockpiles and limited supply were additional factors supporting the prices.

Outlook: We expect copper to trade higher towards 672 levels, a break of which could prompt the price to move higher to 683 levels.

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