IGI Logo

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

Gold crawls back up, Crude remains subdued.

GOLD

On Tuesday, gold prices bounced back from the initial weakness seen at the start of the week, as prices climbed by half a percent to end higher.

The support comes as the US currency weakens, and traders assess the likelihood of the Federal Reserve hiking interest rates only once more in May before halting.

Meanwhile, the European Central Bank's (ECB) top economist supported another rate hike at the ECB's next meeting but stressed the size of the rise will be determined by incoming data.

Gold is regarded as a hedge against inflation and economic uncertainty, but rising interest rates reduce the appeal of the non-yielding asset.

Outlook: Gold prices are expected to remain low, as the possibility of the US Federal Reserve boosting interest rates would limit the upside and decrease demand for the yellow metal.

CRUDE

Crude prices remained little changed on Tuesday, with Brent slipped marginally and NYMEX managing to hold onto the gains.

The modest increase comes after oil inventories were seen declining and on good Chinese economic data, indicating that demand for oil is growing.

Meanwhile, China's economy grew at a faster-than-expected 4.5% in the first quarter, while the country's oil refinery reached new highs in March.

Concerns that expected hikes in US interest rates would impede growth in the world's largest oil-consuming economy kept prices from rising.

Outlook: We expect crude to trade higher towards 6770 levels, a break of which could prompt the price to move higher to 6830 levels.

BASE METALS

The base metals pack crawled back in the positive territory after slipping lower during the previous session. Aluminiium and Nickel gained the most on Tuesday.

Metals prices rose as data suggested faster-than-expected economic growth in key consumer China.

Copper, the metal used in electrical wires, has declined from January highs as growing Chinese demand has been insufficient to counter faltering global economic growth.

Outlook: Base metals are projected to remain elevated as the probability of the US Federal Reserve suspending interest rate hikes strengthens, along with indicators of economic growth in China

Please refer disclaimer at https://www.angelone.in/ 
SEBI Regn. No.: INZ000161534

Above views are of the author and not of the website kindly read disclaimer