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

Gold slips to two-week lows; Crude bounces back from last session’s slump

GOLD

Gold prices dipped to a two-week low as the dollar strengthened, with investors eyeing the upcoming U.S. inflation data set to impact the Federal Reserve's interest rate decision.

The dollar's rise made gold pricier for other currency holders, potentially diminishing its appeal as a non-yielding asset.

Market sentiment suggests a 47% likelihood of a rate hike in November following an anticipated pause by the Fed next week.

Additionally, traders are closely watching the ECB's rate decision, as a 50% chance of a rate hike likely at this week's policy meeting. Gold remains sensitive to these central bank actions and economic data.

Outlook: We expect gold to trade lower towards 58500 levels, a break of which could prompt the price to move lower to 58420 levels.

CRUDE Oil

Oil prices inched higher, reaching a fresh 10-month high, bolstered by expectations of reduced global supply and concerns over disruptions in Libya, which offset worries of sluggish demand in certain regions like China.

Optimistic demand projections from OPEC and the U.S. Energy Information Administration (EIA), indicating a decline in global oil inventories, underscored the tightening supply outlook.

Libya's closure of four oil export terminals due to a severe storm further supported oil prices.

OPEC's confidence in robust global oil demand growth for 2023 and 2024, despite economic challenges, coupled with Saudi Arabia and Russia extending supply cuts, has contributed to keeping supplies constrained.

Outlook: We expect crude to trade higher towards 7470 levels, a break of which could prompt the price to move higher to 7530 levels.

BASE METALS

Copper prices declined in London as a stronger dollar and increasing inventories weighed on the market.

Copper stocks in LME-registered warehouses saw a modest rise, reaching their highest levels since last October at 135,650 tons.

The strengthening dollar, driven by anticipation of U.S. inflation data impacting the Federal Reserve's interest rate decisions, made dollar-priced metals less appealing to buyers using other currencies.

However, positive indicators from China, a major metals consumer, helped mitigate the extent of the losses in copper prices.

Outlook: We expect copper to trade lower towards 726 levels, a break of which could prompt the price to move lower to 721 levels.

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