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

Gold witnesses a marginal uptick; Crude continues to gain further

GOLD

Gold prices continued their marginal upward movement from the previous week, concluding the subsequent week with a 0.2 percent increase.

The bullion started the week cautiously on Monday as investors awaited potential interest rate hikes and monetary policy clues from the Federal Reserve.

While geopolitical tensions provided some support, the main focus remained on central bank decisions.

As the week progressed, gold prices increased due to a steady dollar and anticipation of the Fed potentially pausing its monetary tightening cycle after the expected rate hike.

However, gold relinquished its gains, declining over 1% during the week to a two-week low due to a stronger dollar and rising bond yields following positive U.S. economic data, making the non-yielding bullion less attractive.

Outlook: We expect gold to trade higher towards 60060 levels, a break of which could prompt the price to move higher to 60170 levels.

CRUDE OIL

Crude oil prices experienced a positive week with several factors influencing the market.

Prices surged early in the week, reaching their highest levels since April, driven by signs of tightening supplies and China's commitment to bolster its economy.

However, prices eased slightly later in the week due to anticipated increases in U.S. crude stockpiles and concerns about a global economic slowdown.

The market remained uncertain, with investors closely monitoring central banks for insights into potential rate increases. Despite the fluctuations, oil prices found support from OPEC's output cuts, China's economic stimulus, and positive U.S. economic data.

The market also expressed concerns about long-term demand amid recent interest rate hikes by global central banks.

Outlook: The easing of recession fears and the possibility of the US Federal Reserve refraining from further rate hikes this year are expected to contribute to sustained higher levels of crude prices.

BASE METALS

The base metals pack rebounded from the weakness of the previous week, with nearly all metals ending on a higher note.

LME Nickel and Zinc were among the top gainers, and Copper prices also rose by nearly 2 percent, driven by China's commitment to address its post-COVID economic recovery.

However, prices faced bearish pressure and declined during the week as specific measures for economic support were lacking. The market was influenced by the upcoming rate decisions from the Federal Reserve and the European Central Bank, as well as concerns over peaking interest rates following strong U.S. economic data.

The strengthening dollar impacted commodities priced in dollars, making them more expensive for buyers using other currencies. Moreover, uncertainty about potential rate increases and declining demand from China limited the upside for base metals.

Outlook: We expect copper to trade higher towards 748 levels, a break of which could prompt the price to move higher to 751 levels.

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