Commodity Snapshot shows Gold prices experienced their biggest intraday fall in over a year, while US stocks rose after a sell-off due to Middle East tensions and a busy week for quarterly company results.
Gold’s aggressive rally since mid-February low is challenged by a healthy correction, according to Saxo Bank’s Ole Hansen, which will determine underlying demand levels.
Gold reached a record high of $2,448.80/oz on April 12 due to geopolitical tensions and central bank buying. Silver is also experiencing an aggressive correction, with selling amplified by its failure to break above $30 per ounce.
Spot silver fell 2.24% to $26.70 per ounce, while geopolitical risks in Russia/Ukraine and the Middle East, along with strong retail demand in China, remain positive factors for gold.
Oil prices fluctuated as traders awaited U.S. economic data, with Brent Crude futures rising and U.S. crude falling.
Brent Crude (CO1:COM) futures rose +0.22% to $87.19 a barrel, while U.S. crude (CL1:COM) fell -1.00% to $82.02.
Venezuela’s PDVSA plans to boost digital currency usage in crude and fuel exports amid US sanctions, posing challenges for oil output and exports.
Energy
Energy Crude oil (CL1:COM) -1.01% to $82.01.
Natural Gas (NG1:COM) +0.73% to $1.80.
Metals
Palladium (XPDUSD:CUR) -1.62% to $1,000.50.
Platinum (XPTUSD:CUR) -1.26% to $920.50.
Gold (XAUUSD:CUR) -1.66% to $2,295.05.
Agriculture
Corn (C_1:COM) -2.07% to $440.44.
Wheat (W_1:COM) -1.65% to $577.80.
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Gold prices are expected to gain for the first time since October due to the US Federal Reserve’s anticipated interest rate cut in June. The Reserve Bank of India’s gold holding increased to 812.3 tonnes in January, from 803.58 tonnes in December 2023. However, Commerzbank sees limited upside potential due to the mystery surrounding the price increase. It is unlikely that gold prices will fall back to February levels, as the Fed is expected to cut interest rates in June.
Spot gold was trading -0.3% lower at $2,176.89 an ounce as markets awaited the release of U.S. CPI data, which could influence the Federal Reserve’s policy path. A hotter-than-expected reading could delay the central bank’s easing cycle. Low interest rates help bullion by reducing the opportunity cost of holding the zero-yielding asset. A mixed tone prevailed across commodity sectors, with China’s economic growth concerns affecting bulks and supply concerns supporting industrial metals.
Natural gas and crude oil prices were trading in the green, while oil prices fell earlier due to persistent demand concerns in China. NS Trading president Hiroyuki Kikukawa said that concerns over weak demand in China outweighed the extension of supply cuts by OPEC+. Mixed US jobs data prompted some traders to adjust positions. However, losses will be capped by increased geopolitical risk, with the possibility of a ceasefire in the Hamas-Israel war and conflict expansion in Russia and its neighbors. Europe remains the most impacted region, as oil product shipments from Asia have fallen since January. OPEC+’s voluntary production cut agreement could tighten the market as demand recovers from its seasonal lull.
Natural gas and crude oil prices were trading in the green, while oil prices fell earlier due to persistent demand concerns in China. NS Trading president Hiroyuki Kikukawa said that concerns over weak demand in China outweighed the extension of supply cuts by OPEC+. Mixed US jobs data prompted some traders to adjust positions. However, losses will be capped by increased geopolitical risk, with the possibility of a ceasefire in the Hamas-Israel war and conflict expansion in Russia and its neighbors. Europe remains the most impacted region, as oil product shipments from Asia have fallen since January. OPEC+’s voluntary production cut agreement could tighten the market as demand recovers from its seasonal lull.