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

GOLD

Gold prices on Tuesday bounced back, recouping all the losses from the previous day, as it gained nearly 2 percent, ending above the $1800 mark.

Tuesday saw the yellow metal prices reach more than five-month highs as expectations for a Fed rate hike slowdown were boosted by a smaller-than-expected increase in U.S. consumer prices.

The focus now shifts to Fed's rate hike decision, which is scheduled to be announced. At its final meeting of the year, the U.S. central bank is largely predicted to raise interest rates by 50 basis points.

Outlook: We expect gold to trade higher towards 55010 levels, a break of which could prompt the price to move lower to 55240 levels.

CRUDE

After witnessing a bounce, the previous day, crude continued to march higher, as Brent and NYMEX, both ended with gains of over 2 percent each.

Crude prices increased on expectations that Chinese demand will increase as COVID-19 limitations are relaxed and on a falling dollar after data indicated that US inflation was slowing.

The upside, however, appears to be constrained as industry data revealed a significant increase in US oil stocks rather than the anticipated decrease, bolstering concerns about weakened demand even as supply becomes more constrained.

Outlook: We expect crude to trade higher towards 6400 levels, a break of which could prompt the price to move lower to 6520 levels.

BASE METALS

Post the pause witnessed the other day, the base metals pack showed strength, as nearly all the metal ended on a higher note.

A weaker dollar helped the metals pack gain ground, but worries over the rapidly increasing COVID-19 infections in Beijing prevented additional advances.

Data revealed that US consumer price inflation increased less than anticipated last month, supporting the idea that the Federal Reserve will decrease the rate of rate increases following its two-day meeting on Wednesday. This led to a decline in the US dollar.

Outlook: Metal prices are expected to stay elevated on hopes that the US Fed will slow down on its pace of rate hikes. However, increasing covid cases in China would limit the gains.

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