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

Gold rebounds, Crude witnessed significant gains

GOLD

It looks like all the recent weakness witnessed in gold, comes to a pause, as the yellow metal rose for the recently concluded week. 

Bullion prices posted gains of over 2 percent. With this up-move, gold prices have recouped the losses from the previous week. 

The dollar index, which has fallen from a seven-week high backed the gains in gold, making the safe-haven asset less expensive for investors holding foreign currencies. 

Despite the gains, investors are bracing for further US interest rate hikes in the face of persistently high inflation. 

The argument that the European Central Bank should keep raising interest rates quickly is supported by the fact that the decline in inflation in the Euro zone last month was less than anticipated.

Outlook:

The US Fed's rate hike stance will see the dollar gaining strength, eventually limiting the upside in the yellow metal.

CRUDE

Post a marginal gain in prices during the previous week, the benchmark crude index, NYMEX surged higher, gaining over 5 percent. 

The rise in crude occurred as reports of increased factory activity in China, the world's largest crude importer, bolstered global fuel demand. 

For the first time in seven months, China's manufacturing activity expanded in February. This was the country's quickest manufacturing expansion since 2012. 

The market was further supported by an increase in OPEC oil production in February, which was driven by a resurgence in Nigeria's supplies, despite top producers adhering to the larger OPEC+ coalition's commitment to limit production. 

Gains were nonetheless limited because worries over rising crude stocks in the United States, which is the world's largest producer and consumer of oil, outweighed the strong demand signal. 

Outlook:

We expect crude to trade higher towards 6610 levels, a break of which could prompt the price to move lower to 6690 levels.
 

BASE METALS

The base metals pack saw a rebound this week, as nearly all the metals ended on a higher note, except for Lead, which extended its losing streak. 

Better-than-expected manufacturing activity figures from China, a big consumer, resulted in an upsurge in metal prices. In February, China's manufacturing activity increased more quickly than expected, reaching its highest point since April 2012. 

The fastest rate of factory activity growth in more than ten years, eventually leading strong momentum in metals. 

The decline in the value of the dollar, which made dollar-priced commodities more accessible to buyers using other currencies, was another factor that pushed prices higher.

The metals did experience some pressure, though, as concerns mounted that China may face new sanctions from the US if it backs Russia's war in Ukraine with military aid. 

Outlook:

We expect copper to trade lower towards 749 levels, a break of which could prompt the price to move lower to 739 levels.

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