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GOLD

Spot gold rose on Tuesday after six straight sessions of losses as the dollar along with the Treasury yields dropped following weak US business activity data, as it ends 0.69 percent higher and ending at 1747.7$ per ounce.

Investors now look forward to a speech from Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium later this week in order to gain insight about upcoming interest rate increases. To combat inflationary pressures, the US central bank has increased its benchmark overnight interest rate by a total of 225 basis points since March.

In August, business activity in the euro zone declined for a second consecutive month as consumers trimmed spending while supply constraints also hurt manufacturers. 

Outlook:Investors are looking ahead for the cues from Fed chairman's speech at the Jackson Symposium, which will further pave the way for the central bank's interest rate hikes.

CRUDE

Tuesday saw a more than 5% increase in crude prices as a result of Saudi Arabia's suggestion that OPEC+ output be reduced to maintain prices and the potential for a reduction in US crude inventories. Brent and NYMEX, the two benchmarks, ended with gains of 5.45 and 3.89 percent, respectively.

On the back of optimism around the 2015 Iran nuclear agreement between Iran and the Western powers, crude prices cracked over 4 percent on Monday. However, witnessed a bounceback in the following session.

Oil prices have risen significantly in 2022, almost reaching an all-time high of $147 in March as supply issues were made worse by Russia's invasion of Ukraine. Prices have since been affected by worries about a worldwide recession, rising inflation, and lower demand.

Outlook:Oil prices may continue to remain elevated, as signs of a reduction in production, but the gain would be limited because the 2005 Iran nuclear agreement, if finalized, may add 1MM barrels per day to the market's supply.

BASE METALS

The industrial metals continue to witness mixed sessions on Tuesday. On the LME and on the MCX, except for copper and aluminium all the other metals ended on a negative note.

Low stockpiles, signs of rising Chinese demand, and concerns that exorbitant energy prices may compel smelters to reduce output all led to an increase in copper prices on Tuesday. A decline in the US dollar from 20-year highs made copper more affordable for buyers using foreign currencies.

Aluminium looked firm as the aluminium smelter Sunndal goes on a strike. This comes after a shutdown of aluminium and Zinc smelters, given the high power costs.

According to data released on Tuesday, manufacturing in Europe shrank this month, while factory activity growth in Japan and the US stalled. However, China, the world's largest buyer of metals, reduced its benchmark lending rate this week in an attempt to assist its real estate sector.

Outlook:Metals are likely to remain under pressure as high interest rates and slowdown in the economy would hamper the demand for metals.

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