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Below is "Daily Commodity Article" by Mr. Prathamesh Mallya, DVP Research, Non-Agro Commodities & Currency, Angel One Ltd.

                                        Gold remains subdued; Crude at new highs for the year.

GOLD

Gold prices edged higher as U.S. consumer prices rose moderately in July, reinforcing the belief that the Federal Reserve has completed its rate hike cycle.

The 0.2% increase in the consumer price index (CPI) for the month, along with a 3.2% year-on-year CPI rise, suggests a more favorable environment for the gold market.

The dollar's retreat against other currencies after the data release enhanced gold's appeal, although upward movement in U.S. 10-year bond yields tempered gains.

With a 90.5% probability of the Fed maintaining rates at its September meeting, gold's sensitivity to rising U.S. interest rates, which elevate the cost of holding non-yielding assets, remains a key factor to monitor.

Outlook: We expect gold to trade lower towards 58600 levels, a break of which could prompt the price to move lower to 58480 levels.

CRUDE

Oil prices climbed higher fueled by OPEC's optimism about robust oil demand in 2024, coupled with an uplift in global economic growth projections.

Both WTI and Brent benchmarks have been on a sustained rally since June, hitting new highs for the year.

This upward momentum has been bolstered by extended output cuts from key players like Saudi Arabia and Russia, along with concerns over potential supply disruptions due to tensions between Russia and Ukraine impacting oil shipments.

The recent data on U.S. consumer prices in July further fueled market speculation of an approaching end to the Federal Reserve's aggressive rate hike cycle, adding to positive market sentiment.

Outlook: Given the ongoing reduction in output by major producing nations, it is expected that crude prices will remain at higher levels.

BASE METALS

Copper prices in London retreated from earlier gains due to a slower dollar decline post-U.S. inflation data and ongoing expectations of Chinese stimulus

Lingering post-pandemic recovery issues in key consumer China are pushing copper towards a second weekly decline.

Deflation in consumer prices and factory gate price drops in China have fueled hopes of Beijing's policy stimulus, crucial for base metals.

A dip in the dollar index, influenced by moderate U.S. consumer price growth, may impact Federal Reserve rate decisions. A weaker dollar boosts dollar-priced commodities for non-U.S. buyers.

Outlook: In the short term, the outlook for base metals prices will continue to experience volatility, as the market's attention remains directed toward the broader macroeconomic landscape, where sluggish global growth is exerting pressure on demand.

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