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"Daily Commodity Article" by Mr. Prathamesh Mallya, DVP Research, Non-Agro Commodities & Currency, Angel One Ltd.

Gold slips marginally; Oil pulls back on unexpected uptick in inventories.

GOLD

Gold on Wednesday slipped lower, giving up marginal gains from the recent strong momentum, as optimism over the Federal Reserve cutting interest rates this year faded after US inflation report, triggering profit-taking among some investors.

For the first time in two years, the annual increase in US consumer prices dropped to less than 5% in April, perhaps giving cover for the US central bank to postpone a rate hike next month.

Markets are already pricing in a 95% chance that the Fed will keep interest rates unchanged in June.

Outlook: We expect gold to trade higher towards 61410 levels, a break of which could prompt the price to move higher to 61810 levels.

CRUDE

Crude prices witnessed pressure on Wednesday, as the benchmark index NYMEX ended on a lower note, whereas, the other index Brent inched higher, gaining over 2 percent. 

The American Petroleum Institute said on Tuesday that commercial crude oil stocks in the United States unexpectedly climbed last week, dragging on oil prices. 

Core consumer prices in the United States climbed in April, boosting the possibility that the Federal Reserve would retain higher interest rates, which might reduce oil consumption. 

Rising global interest rates have put pressure on oil prices in recent months, as traders worry about a recession.

Outlook: Crude prices are caught up in uncertainties, eventually weighing on the prices and dragging it lower.

BASE METALS

On Wednesday, allthe base metals pack drifted lower, ending with cut of over 1 percent each. 

Metals were under pressure as dismal trade data from big consumer China confirmed that demand would remain chopped down.

Prices remained low even after data indicated that consumer prices in the United States climbed at a slower-than-expected rate last month.

While China's services sector is thriving, the metals-intensive construction and manufacturing industries are behind.

China's imports fell substantially in April, while export growth stalled, according to data released on Tuesday, strengthening concerns of weak domestic demand.

Outlook: We expect copper to trade higher towards 759 levels, a break of which could prompt the price to move higher to 763 levels.

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