Daily Commodity Article : Gold ends marginally higher; Crude settled the week with strong gains by Mr. Prathamesh Mallya, DVP Research, Angel One Ltd.
Below is Daily Commodity Article : Gold ends marginally higher; Crude settled the week with strong gains by Mr. Prathamesh Mallya, DVP Research, Angel One Ltd.
Gold ends marginally higher; Crude settled the week with strong gains.
GOLD
Gold prices initially rose due to a weaker U.S. dollar and Treasury yields, driven by uncertain economic readings and the Federal Reserve's hawkish policy outlook.
However, concerns about a prolonged rate hike cycle and a stronger dollar caused gold prices to decline. The release of the Federal Reserve's meeting minutes confirmed expectations of higher interest rates, further weighing on gold.
Anticipation of rate hikes in July added to the downward pressure. Overall, gold's weekly performance was mixed, with initial gains followed by declines due to a stronger dollar, rising yields, and expectations of further rate hikes. However, it managed to inch higher marginally.
Outlook: We expect gold to trade higher towards 58920 levels, a break of which could prompt the price to move higher to 58980 levels.
CRUDE
Crude oil prices initially declined at the start of the week, but later climbed as Saudi Arabia and Russia announced supply cuts for August.
Concerns over sluggish global economic activity and potential interest rate hikes tempered the price increases.
Despite efforts by OPEC+ to tighten supply, uncertainties remained in the market.
Overall, oil prices were influenced by factors such as supply cuts, which outweighed other headwinds like demand concerns, central bank actions, and macroeconomic challenges.
Outlook: We expect crude oil to trade higher towards 6140 levels, a break of which could prompt the price to move higher to 6200 levels.
BASE METALS
Base metals, including copper, faced downward pressure during the week due to a weak global economic growth outlook and sluggish demand from China.
Manufacturing data from the United States, Europe, and China indicated a decline in activity, dampening the demand outlook for base metals.
However, copper prices found some support from low inventories in global exchange warehouses. Analysts revised their copper price forecasts downward, citing slow activity normalization in China, tighter monetary policy, and a global manufacturing recession.
These challenges continue to cloud over the base metals pack, eventually dragging their prices lower.
Outlook: We expect copper to trade higher towards 727 levels, a break of which could prompt the price to move higher to 730 levels.
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