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GOLD

After being under pressure recently, with prices falling to lows in April 2020, gold prices saw a recovery this week as the yellow metal surged upward and ended the week on a positive note. Spot gold saw a modest decline at the start of the week, but as the dollar index dropped from its highs, the bullion defied recent trends and completed the week with 2.3 percent gains.

The escalation on the Russia and Ukraine was another factor that supported prices by increasing demand for safe-haven assets and reducing downside risk. During times of unpredictability around the world, gold serves as a safe haven asset.

Since central banks around the world opted to hike interest rates, the dollar has appreciated versus a basket of other currencies. Interest rate increases reduce demand for gold, which is also considered of as a hedge against inflation.

Outlook:We expect gold to trade higher towards 50530 levels, break of which could prompt the price to move higher to 50820 levels.

CRUDE

The weakness from the previous week seemed likely to be extending into the further week, given the uncertainty regarding supply interruptions on the back of the Russia-Ukraine conflict and tightening monetary policy globally that raises the prospect of economic downturns.

However, prices bouncedback during the week, as oil producers in the US had to shutdown the operations in advance due to Hurricane Ian,lead to an uptick in crude prices. Roughly 15% of the nation's crude oil is produced in the US Gulf of Mexico. Prices were further boosted from a retracing dollar index, which cooled down from its recent 20-year highs, making the oil less expensive for buyers using other currencies.

Additionally, a recovery in China's economy from a trough hit in the second quarter post the relaxation of COVID-19 restrictions is anticipated to increase oil consumption.

Outlook:We expect crude to trade higher towards 6700 levels, break of which could prompt the price to move higher to 6830 levels.

BASE METALS

With the exception of nickel, which closed nearly 5% down, most metal prices ended on a positive note, providing some relief from the base metals pack's persistent decline.

The continued pressure in the base metals saw Copper prices slip to two month lows as prompted worries about a global recession, less demand, a stronger currency, and rising stocks in LME registered warehouses. The dollar index fell after reaching two-decade highs, which made the metals denominated in dollars less expensive for buyers using other currencies, overshadowing the bearish feelings.

After the LME announced that it would publish a discussion paper, taking the first step toward restricting new metal supplies from Russia, prices rose even further. Since a ban would result in metal shortages and more price increases at a time when global inflation is on the rise.

Outlook:Given the favourable developments coming out of China, which could increase the demand for metals, base metal prices are expected to remain high. However, the rise in the metals will most certainly be constrained by a strong dollar

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