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

Rate hike worries loom over Gold, Crude set to end higher for the week.

GOLD

As gold witnessed higher closings for the last 3 sessions, the prices on Thursday marginally slipped lower, but remained on track for a weekly gain.

Even as concerns lingered that the U.S. Federal Reserve would keep raising interest rates to combat inflationary pressures, an easing dollar helped gold prices edge up for the week.

Last month's decrease in euro zone inflation was less than anticipated, supporting the argument that the European Central Bank should continue swiftly rising interest rates.

High interest rates make gold less desirable as an inflation hedge and make it more costly to hold the non-yielding asset.

Even as concerns lingered that the U.S. Federal Reserve would keep raising interest rates to combat inflationary pressures, an easing dollar helped gold prices edge up for the week.

Last month's decrease in euro zone inflation was less than anticipated, supporting the argument that the European Central Bank should continue swiftly rising interest rates.

High interest rates make gold less desirable as an inflation hedge and make it more costly to hold the non-yielding asset.

Outlook:

We expect gold to trade lower towards 55540 levels, a break of which could prompt the price to move lower to 55400 levels.

CRUDE   

On Thursday, both the crude benchmark indices, Brent and NYMEX ended higher, with gains of 1.72 and 0.60 percent respectively.

Oil prices are expected to rise for the week as China's manufacturing activity picks up, offsetting mounting worries over the buildup of US oil stocks and prospective rate increases in Europe.

While WTI has increased by about 3%, recovering from a slight loss the previous week on expectations of robust growth in fuel consumption in China, the world's top oil importer, Brent trades higher so far this week, on course for a second straight week of gains. 

China's manufacturing activity increased last month at its quickest rate in more than ten years, supporting predictions of a resurgence in oil demand.

Outlook: 

We expect crude to trade lower towards 6330 levels, a break of which could prompt the price to move lower to 6220 levels.

BASE METALS

Metal prices fell on Thursday as a result of a stronger dollar and the possibility that the United States may impose additional sanctions on China, the world's largest consumer of metals, following strong gains the day before as manufacturing activity in China expanded at the fastest rate in the previous month.

Fears increased because the United States might impose additional sanctions on China if Beijing provides military support to Russia for its war in Ukraine.

The outlook for demand was improved by solid factory activity figures from China, the world's largest consumer of metals, which put copper prices on track for a weekly increase.

Outlook: 

We expect copper to trade lower towards 755 levels, a break of which could prompt the price to move lower to 745 levels.

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