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Below is Commodity Article by Mr. Saish Sandeep Sawant Dessai, Research Associate- Base Metals, Angel One Ltd

GOLD

The yellow metal traded on a sideways note for much of the session on Thursday, as it managed to end on a positive note, up 0.08 percent ending at 1736.6$ per ounce.

Although gold was able to hold steady as the dollar eased off of two-decade highs, the metal was on track to record its worst weekly loss in more than a month as demand was negatively impacted by the strong dollar.

The dollar dipped from 20-year highs, taking some weight off greenback-priced gold. Gold prices have fallen by more than 3% this week, which is likely to be the largest weekly decline since mid-May.

With layoffs surging to a 16-month high in June, there are growing signs that the demand for labor is cooling, and the number of Americans submitting new claims for unemployment benefits unexpectedly increased last week. These developments fuel recession fears as the Federal Reserve's aggressive tightening of monetary policy.

Outlook: We expect gold to trade higher towards 51050 levels, a break of which could prompt the price to move higher to 51450 levels.   

CRUDE

After witnessing pain in the past few sessions, crude prices witnessed a bounceback as Brent ended with gains of 4.87 percent and NYMEX gained 4.26 percent and clawed back above the $100 mark as worries of a tight supply market re-ignited.

Both benchmarks are expected to decline for a second week. This week was highlighted by a significant sell-off on Tuesday when WTI fell by 8% and Brent by almost 9%. The decline in Brent was the third-largest since trading began in 1988.

Traders overlooked concerns about the impending recession and turned their attention to the undersupply problems, which temporarily stopped the sell-off in the commodity markets.

Fears that rising interest may cause countries to enter into a recession and diminish the demand for oil, which have been fuelled by central banks hiking interest rates around the world in order to combat inflation.

Outlook: We expect crude to trade higher towards 8330 levels, a break of which could prompt the price to move higher to 8440 levels.   

BASE METALS

On Thursday, the base metals pack showed some sign of revival, as most of the metals ended on a positive note except for Nickel on the LME and lead on the MCX. Copper was the top-performing metal on both exchanges.

Prices of copper increased on expectations that top consumer China will likely roll out a  stimulus program to help its economy, yet the likelihood of a worldwide recession kept the metal on course for yet another weekly loss.

The largest copper producer in the world, Chile's state-owned Codelco, announced on Thursday that it will start building a $1 billion desalination facility this year to serve its main operations in northern Chile.

With the prospect of a swift increase in Federal Reserve interest rates as well as and safe-haven appeal stemming from global recession fears, the dollar is likely to remain strong in the immediate future.

Outlook: While the possibility of a Chinese stimulus plan would limit the fall in metals, the expectation of a Fed rate hike could put metal prices under pressure.

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