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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 what seemed like a comeback session the other day, bullion prices lost ground, with prices cracking over 2 percent as the market factored in Jerome Powell's most recent remarks.

After a 2% decline in the previous session, gold prices are on track for their largest weekly decline since November.

After a year of higher hikes, the Fed lowered its rate increase on Wednesday to just a quarter of a percentage point. Even though Powell highlighted that the disinflation is still in its early stages, he also cautioned against additional tightening of the monetary policy.

Lessened interest rates tend to be advantageous for gold since they lower the opportunity cost of storing non-yielding metal.

Outlook: As a result of the Fed Chair's announcement that the central bank might continue to raise interest rates, the gains in gold prices appear to be limited.

CRUDE OIL

The weakness in the crude prices was extended further as, both benchmark crude prices ended on a lower note, with Brent slipping over 3 percent.

Oil prices are on track for their second consecutive week of declines as investors wait for more evidence of a robust recovery in fuel demand in China to counteract impending contractions in other major countries.

The market has been restrained despite varying indications of a resurgence in oil demand in China, the world's largest oil importer.

The oil market has been supported so far this year by the potential for an economic recovery in China after COVID-19 limitations were relaxed and a weaker dollar that makes the commodity more affordable for people holding foreign currencies.

The US Federal Reserve is no longer projected to raise interest rates aggressively, which has caused the dollar to decline. In contrast, other major economies are continuing to raise interest rates at a faster clip even if inflation has decreased.

Outlook: Gains in oil prices were restrained by rising interest rates, US recession concerns, and China's muted oil demand.

BASE METALS

On Thursday, the base metals group ended on a mixed note, as copper, aluminium and nickel ended on a lower note.

Despite the most recent supply disruptions, the reddish metal copper is on track to post a weekly loss as weak global demand impacted on sentiment.

As increased interest rates hindered consumer demand, US manufacturing shrank even more in January, but factories did not appear to be laying off workers in large numbers.

Outlook: We expect copper to trade lower towards 769 levels, a break of which could prompt the price to move lower to 759 levels.    

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