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

GOLD

Gold prices experienced a marginal 0.3 percent increase for the week, responding to various factors that influenced market sentiment.

The fluctuations of the U.S. dollar near one-year lows made gold relatively more affordable for buyers holding other currencies. However, investor caution prevailed as they awaited signals from the Federal Reserve regarding its monetary tightening plans.

Last week's inflation data contributed to gold's significant weekly gain, the largest since April. Speculation arose that the Fed might pause rate hikes after July due to indications of a possible disinflationary trend in consumer prices.

The strength of the U.S. economy, particularly in the employment sector, added to the uncertainty as higher interest rates could diminish gold's allure compared to interest-bearing investments.

Additionally, gold traders closely monitored economic data from China, where weak growth raised concerns about future demand.

Outlook: We expect gold to trade lower towards 59000 levels, a break of which could prompt the price to move lower to 58870 levels.

CRUDE

Crude oil continued its upward trend, registering a gain of over 3 percent in the benchmark NYMEX index, concluding the week on a strong note.

Early in the week, crude oil prices edged higher as investors anticipated a potential tightening of U.S. crude supplies and awaited industry data on U.S. crude oil stockpiles.

The projection of a decline in U.S. shale oil production in August hinted at possible supply constraints. However, concerns over China's weaker-than-expected economic growth limited price gains.

During the week, oil prices rose due to China's commitment to supporting economic growth, Russia's planned reduction in oil exports, and lower U.S. crude inventories, signaling a potential tightening of global oil supplies.

Towards the end of the week, prices retreated as investors took profits, and the strength of the U.S. dollar weighed on the market. Weak Chinese economic data further raised apprehensions about future oil demand.

Outlook: We expect crude oil to trade higher towards 6380 levels, a break of which could prompt the price to move higher to 6440 levels.

BASE METALS

Most of the base metals, after ending the previous week on a strong note, relinquished their gains in the following week, with LME Zinc, Aluminium, and Copper experiencing declines.

The prices of base metals were influenced by weak economic data from China, the top metals consumer, which raised concerns about demand expectations.

Despite the support from a weaker dollar, copper prices fell due to the absence of major stimulus announcements from China.

However, there were hopes for potential mortgage easing in China's largest cities, which provided optimism for the real estate sector's commodity demand.

Base metal prices were also supported by supply-side risks in Peru and Indonesia. The market remained sensitive to global economic conditions, dollar fluctuations, and expectations surrounding stimulus measures in China, which shaped base metal prices throughout the week.

Outlook: We expect copper to trade lower towards 719 levels, a break of which could prompt the price to move lower to 713 levels.

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