Monthly Commodities Outlook - March 2022 - ICICI Direct

Gold Outlook

• Gold prices advanced almost 6% last month as investors remained cautious due to Russia's invasion of Ukraine. Further, pessimistic sentiments in global markets boosted the demand for safe haven assets. Additionally, US consumer prices rose to 7.5% in January 2022, biggest annual increase in 40 years, which bolstered the metal's appeal as a hedge against inflation
• However, gold prices did not perform as well as expected, as investors rushed into other safe haven assets such as dollar, yen and cryptocurrencies
• Over the past one month period, total holdings at SPDR Gold ETF have increased to 1045 tonnes from 1014 tonnes, indicating investment demand rebounded to gold amid rising geopolitical tensions in Ukraine and on elevated inflation
• Moreover, CFTC data showed large speculators increased their net positions in Comex gold over the past few weeks along with significant increase in open interest, suggesting that the bullish trend is likely to continue in gold prices in the short-term

Crude Oil Outlook

• WTI crude oil prices settled at a seven year high as result of oil supply disruptions due to Russia's invasion of Ukraine. Further, consistent draws on global inventories along with Opec countries maintaining a slow pace of increase in supply boosted oil prices
• According to EIA data, US commercial crude inventories declined to 413.40 million barrels from 415.10 million barrels over the past one month and commercial inventories in the OECD ended at 2.68 billion barrels, which at its lowest level since mid-2014, indicating continuously increasing demand
• However, talks between the Biden administration in the US and Iran are almost close to yielding a deal on a 2015 nuclear agreement. Going forward, removal of US sanctions on Iranian oil will increase global crude oil supply around 1.5 million barrels per day, which may cap further gains in oil prices

For details, click on the link below: Link to the report

Source : Equity Bulls

Keywords

Gold CrudeOil Commodities MonthlyOutlook March2022 ICICIDirect