Weekly Commodity Podcast With Ravindra Rao | 22nd May 2023

Market sentiments were mixed in the previous week as optimism of debt ceiling resolution supported risky assets whereas rising speculation that the Fed may raise interest rates again kept traders cautious.• However, moderately dovish stance by Federal Reserve Chair Jerome Powell, that the US central bank may not need to raise interest rates as much, given how credit conditions have tightened, led to dollar retreat from two month high of 103.62.• The new range in Dollar Index now might be 105-102.80 provided the US debt ceiling deal goes through. A close below 102.20 would once again make dollar weak. • On the precious metals front it was not a good week for gold bulls as the COMEX price broke below the $1974/oz zone, after holding it for more than a month. Similar trend was seen in Silver but losses were limited to just 0.7% on recovery in gold and industrial metals in the last trading session of the week.• US debt ceiling uncertainty might keep markets volatile for the week. However, once it is resolved focus will again turn to economic data and monetary policy outlook. FOMC Meeting minutes and PCE Price index might be the focus for the day.• On the energies front both WTI Crude oil and Natural gas rose in the previous week. WTI Crude oil closed with 2% upside, first weekly gain since mid-April, supported by US debt deal optimism, supply disruptions from wildfires in Canada and favourable demand outlook by IEA.• NYMEX Natural gas witnessed a sharp rally ending the week with a solid 14% gains. The rally came after the inventory report showed lower than expected build.• Base metals closed on a mixed note after hitting fresh multi month lows as Chinese economic data largely missed expectations and sparked concerns regarding the faltering pace of recovery, thereby hurting demand prospects.• The greenback may continue to trade sideways as latest comments by Fed Chair has led to repricing of rate expectations. Also, the week will continue to be dominated by the decision on US debt ceiling. Will get a clear market reaction after the deal gets through. till then volatility might be high.