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

GOLD

After hitting its lowest level since January, gold prices on Thursday bounced back, gaining a marginal 0.07 percent.

The outlook for non-yielding bullion was clouded by a stronger currency and concerns about additional interest rate hikes by the US Federal Reserve, so the yellow metal is still on track to witness another weekly decline.

Because gold is a safe store of value, it competes with the dollar, an increase in the value of the dollar makes gold bullion less appealing to overseas buyers. 

In times of rising inflation, gold is regarded as a secure investment; yet, holding a non-yielding metal comes at a higher opportunity cost when interest rates are high.

Outlook: We expect gold to trade lower towards 55910 levels, a break of which could prompt the price to move lower to 55680 levels.  

CRUDE OIL

Oil prices continue their downward trajectory, as they are on track for weekly losses. Strong US economic data has raised worries that the Federal Reserve will maintain its strict monetary policy to combat inflation, which could reduce oil demand even as crude stockpiles increase.

According to a larger-than-anticipated rise, the Energy Information Administration (EIA) stated that US crude oil stockpiles last week increased to their highest level since June 2021.

During the past few weeks, the price of oil has seesawed between concerns about an impending recession in the United States and inflation-fighting rate hikes and optimism for a recovery in demand in China, the world's largest oil consumer.

Outlook: We expect crude to trade lower towards 6400 levels, a break of which could prompt the price to move lower to 6310 levels.  

BASE METALS

On Thursday, the base metals pack, except for nickel and lead, ended on a higher note, with copper being the top gaining metal.

Although a build-up in metals stocks halted this week, hopes for a revival in Chinese demand increased, helping to sustain the market.

The upside appears to be limited, though, as the dollar clung onto gains against a basket of currencies on Thursday, indicating that the Fed would need to keep interest rates higher for longer due to stronger-than-anticipated producer prices and declining jobless claims.

Outlook: The dollar's rise will make commodities priced in dollars more expensive, therefore metal prices are likely to stay under pressure. However, any signs of improving demand from China would limit the losses.

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