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

GOLD

Spot gold continued to trade higher for the second day running as prices ended 0.18 percent higher at 1750.9$ per ounce.

The dollar's weakness ascribed to gold's advances, while investors now await a speech by US Federal Reserve Chair Jerome Powell at the Jackson Hole symposium for hints on interest rate hikes and the health of the economy.

The dollar fell slightly, making gold less expensive for investors holding other currencies, although benchmark 10-year Treasury rates remained near multi-week highs hit in the previous session.

Outlook: We expect gold to trade higher towards 51870 levels, a break of which could prompt the price to move higher to 52270 levels.

CRUDE

Post witnessing strong gains in the previous session, the benchmark crude indices ended on a mixed note on Wednesday, as Brent ended with a 0.37 percent cut, whereas NYMEX ended with gains of 1.23 percent.

Both crude oil benchmarks hit three-week highs on Wednesday after Saudi Arabia's energy minister hinted at output cuts.

Oil prices have fallen in recent weeks, from as high as $120 a barrel, on fears of a Chinese economic slowdown and a recession in the West. 

OPEC is willing to cut output to offset a recent drop in oil prices caused by macroeconomic concerns, which have ignored tightness in crude supply. Any reduction by the producing group and its allies will almost certainly coincide with the restoration of Iranian oil to the marke

Outlook: Oil prices may continue to rise, but gains will be limited due to the Iran nuclear deal, which may add 1 million barrels to the market.

BASE METALS

On the LME, except for Aluminium and Zinc, the rest of all the metals ended on a lower note, with zinc being the top gainer of the lot, whereas on the MCX, all the industrial metals ended on a negative note.

LME Copper fell more than 1% as a bleak demand picture and rising recession fears capped advances. Copper prices, which are frequently used as a measure of global economic health, have recovered over 16% from a 20-month low reached in mid-July, but are still substantially down this year.

According to the International Copper Study Group (ICSG), the global refined copper market had a 66,000-tonne shortfall in June, compared with a 30,000-tonne deficit in May.

Following the precedent of a few aluminum smelters that have suspended production due to rising energy costs, another aluminum producer, Spira, is considering reducing production at its German smelter to 50% of its capacity in reaction to rising energy costs.

While the dollar was slightly weaker, it kept the downside in check, as investors are awaiting the U.S. Federal Reserve's annual Jackson Hole conference for clues on how sharp future interest rate hikes might be.