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GOLD

On Monday, spot gold ended the day on a negative note, down 0.53 percent to end at 1841$ per ounce

Gold prices fell for the second day in a row on Tuesday, as anticipation of interest rate hikes in the US and Europe dampened demand for the precious metal. The Federal Reserve is expected to raise interest rates by 50 basis points at its June and July meetings, and last week's jobs report bolstered expectations of more tightening by the US central bank

Investors are increasing their bets on interest rate hikes this year as the European Central Bank meets later this week. Gold's appeal is harmed by rising interest rates, which raise the opportunity cost of owning nonyielding bullion. Another factor contributing to the gold price decline was the strengthening dollar, which is approaching two-week highs, making greenback-priced gold less tempting to overseas investors.

The yellow metal is seen as a safe haven in times of political and economic uncertainty, as well as the best hedge against inflation. The opportunity cost of keeping gold, which pays no interest, rises when short-term interest rates rise

Outlook:We expect gold to trade lower towards 50560 levels, break of which could prompt the price to move lower to 50180 levels.

CRUDE

Post concluding the previous week on a positive note, crude prices began the subsequent week on a slighly weaker note as prices came under pressure with Brent crude ending lower by 0.50 percent while NYMEX crude was down by 0.31 percent.

Saudi Arabia and other OPEC+ members agreed to boost output by 648,000 barrels per day in July and August, or 50% more than previously projected. The enhanced aim was shared among all members of OPEC+ countries, especially Russia, which is subject to Western sanctions, have little room to increase output.

The losses were capped, however, since the EU passed a sixth round of sanctions, which will phase out most purchases of Russian oil and products, including distillates, by the end of 2022 or early 2023, presumably worsening shortages of both. Another factor is that the lifting of lockdowns in Shanghai, China, is projected to boost oil consumption in the coming weeks.

The most recent economic data in the United States reveals that growth has slowed after last year's spectacular post-epidemic recovery, but it still has significant momentum, which will keep oil demand high in the short run

Outlook:Crude prices are projected to remain high as demand picks up following China's lifting of its lockdown restrictions, as individuals have begun to leave their homes and business activity are gradually catching up. The EU's ban on Russian petroleum provides further support for crude prices, as it raises fears of a tighter supply market

BASE METALS

The LME resumed trading after the long holiday weekend, with most industrial metals ending on a positive note, with nickel leading the pack, owing to expectations of a demand recovery from the world's largest metals consumer, China. Since its reopening, it has been announcing policy steps to help the economy.

Copper prices rose to five-week highs on Monday, fueled by confidence about the demand rebound and further bolstered by shrinking supplies. The COVID-19 limitations in top metals consumers have been lifted. The anticipation of a revival in demand in China boosted metals prices.

However, given the expectation of a 50-basis-point rate hike by the Fed in its forthcoming sessions, gains in base metals are projected to be limited. An increase in short-term interest rates will strengthen the US dollar, making dollar-priced commodities more expensive for foreign currency holders.

Outlook:We expect copper to trade lower towards 783 levels, break of which could prompt the price to move lower to 764 levels.

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