Commodity market shows Gold prices rose to a record high on Tuesday due to growing rate cut expectations. U.S. crude futures reached $85 for the first time since October, indicating tightening supplies.
Gold’s recent price rise above $2,200/oz exceeded expectations, with analysts focusing on rate cuts in the second half of 2024. ANZ remains positive, but a pullback is likely without fresh fundamentals in the second quarter.
The brokerage predicts platinum prices to maintain their current level due to supply risks and Pd-to-Pt substitution demand. It also predicts global oil supply growth to slow due to decelerating non-OPEC output and OPEC+ production curbs, with US oil incremental output falling 300kt against 1mb/d last year.
OPEC’s voluntary production cuts and Russia’s deepening production cuts are expected to tighten oil flows as demand recovers from a seasonal low. ANZ expects oil prices to find support near $85/bbl in Q2.
The coal market remains focused due to the collapse of Baltimore’s Francis Scott Key Bridge, which caused a supply-chain snag for commodities, particularly coal. The temporary closure of Baltimore’s port will affect export volumes this year.
Potential stocks to watch: Global Gas (HGAS), Austin Gold Corp (AUST), Atlas Lithium (ATLX), Coeur Mining (CDE), Iamgold (IAG), Chemours (CC), Lavoro (LVRO), Captivision (CAPT), NexGen Energy (NXE), Dorian LPG (LPG). Global Gas (HGAS), Austin Gold Corp (AUST), Atlas Lithium (ATLX), Coeur Mining (CDE), Iamgold (IAG), Chemours (CC), Lavoro (LVRO), Captivision (CAPT), NexGen Energy (NXE), Dorian LPG (LPG).
Energy
Crude oil (CL1:COM) +1.73% to $85.35.
Natural Gas (NG1:COM) -0.52% to $1.83.
Metals
Palladium (XPDUSD:CUR) +2.23% to $1,029.50.
Platinum (XPTUSD:CUR) +1.44% to $927.50.
Gold (XAUUSD:CUR) +0.45% to $2,260.76.
Agriculture
Corn (C_1:COM) -0.09% to $435.38.
Wheat (W_1:COM) -0.51% to $554.98.
Cotton (CT1:COM) -0.27% to $92.51.
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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.