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

Gold slips as dollar rebounds, Crude settles higher.

GOLD

The yellow metal on Wednesday gained for yet another session, adding to its YTD gains. Gold was up by half a percent to 2014.7$ per ounce. 

Gold prices rose as cooler-than-expected US inflation data suggested that the Federal Reserve may suspend hiking rates after a probable increase in May. 

According to the minutes of the Fed's March meeting, some policymakers pondered suspending rate hikes in response to a Fed staff estimate that banking sector stress would tip the economy into recession, but judged that high inflation remained the priority.

Gold is seen as an inflation hedge, but rising interest rates make non-yielding bullion less appealing.

Outlook: We expect gold to trade higher towards 61020 levels, a break of which could prompt the price to move higher to 61340 levels.

CRUDE

Following a slight rise the previous week, crude prices increased by more than 3% in the most recent week. 

Crude prices, however, did not start the week on a positive note, as prices fell following US jobs data that indicated a tight labour market, heightening expectations of another Federal Reserve rate hike, which might dampen oil demand.

Rate hike expectations raised the US dollar index on Monday, weighing on oil prices. 

Crude prices rose further during the week, with benchmark indices reaching their highest levels in more than a month, as falling US inflation data fueled hopes that the Federal Reserve will stop hiking interest rates.

Outlook: We expect crude to trade higher towards 6920 levels, a break of which could prompt the price to move higher to 7030 levels.

BASE METALS

Following a good end the previous week, the yellow metal began the new week on a weaker note, giving up the previous week's gains. Prices fell below $2000 as a result of the bad start. 

The recent strong momentum has come to a halt, as few factors weigh on gold's momentum. 

The markets are pricing in a roughly 70% chance that the Fed will raise interest rates next month, which is supported by strong US employment data released last week.

However, lower-than-expected US inflation figures hinted that the Federal Reserve may pause rate hikes after raising for one more time in May. 

Finally, minutes from the Fed's most recent meeting in March revealed several Federal Reserve policymakers discussed delaying interest rate rises in the aftermath of the failure of two regional banks.

Outlook: We expect gold to trade lower towards 59800 levels, a break of which could prompt the price to move lower to 59420 levels.

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