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

GOLD

Gold traded cautiously on Monday as traders await a potential interest rate hike and monetary policy clues from the Federal Reserve.

Geopolitical tensions provided some safe-haven demand, but the focus remained on central bank decisions. Gold is sensitive to rising interest rates, which increase the opportunity cost of holding the non-yielding asset.

The strengthening dollar limited gold's upside, while gold priced in euros rose on weak euro zone business activity data.

Outlook: We expect gold to trade lower towards 58800 levels, a break of which could prompt the price to move lower to 58660 levels.

CRUDE OIL

Oil prices continued their upward trend on Monday, supported by signs of tightening supplies and commitments by Chinese authorities to bolster their economy.

Both benchmarks surged over 2%, reaching their highest levels since April. The four-week climb in crude prices was driven by anticipated supply cuts from OPEC and its allies.

Despite concerns over the global economy, China's focus on boosting domestic demand added to positive sentiment.

Investors await insights from the Federal Reserve and European Central Bank regarding potential rate increases, while industry data on U.S. crude inventories is expected later in the week.

Outlook: We expect crude oil to trade higher towards 6540 levels, a break of which could prompt the price to move higher to 6600 levels.

BASE METALS

Copper prices in London rose on Monday as attention shifted to the upcoming rate decision by the Federal Reserve, following China's commitment to address its post-COVID economic recovery.

Last week, copper had declined nearly 1% due to China's modest stimulus measures.

China's top decision-making body, though not revealing specific policies, pledged to optimize property measures, boost domestic demand, and support industries like autos through increased special bond issuance.

Additionally, Chile's Codelco reported a rock blast at its expansion project.

Metals markets are closely monitoring the Fed and European Central Bank rate decisions this week for clues on potential pauses in rate hikes amid economic data indicating progress in reducing inflation.

Outlook: We expect copper to trade lower towards 723 levels, a break of which could prompt the price to move lower to 716 levels.

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