Commodity Gold prices are set for a fourth consecutive week of gains, their longest streak this year, due to geopolitical risks countering expectations of the US Federal Reserve keeping interest rates high. Spot gold reached a record of $2,400.73 an ounce, bringing its gains to 2.4%.
Crude oil prices are set for a weekly loss, with Brent breaking a four-week gain streak. ING analysts predict a pullback due to the oil rally’s lack of momentum. OPEC maintains its demand growth forecasts for 2024 and 2025, but cuts its non-OPEC supply growth forecast to 1 million barrels a day for 2024 and 1.3 million b/d for 2025.
The USDA’s latest WASDE report revealed increased corn demand and lowered soybean demand. Corn ending stocks were lowered from 2.17b bushels to 2.12b bushels, driven by higher domestic demand estimates. Soybeans saw an increase from 315m bushels to 340m bushels, driven by reduced domestic and export demand.
Energy
Crude oil (CL1:COM) +1.23% to $86.03.
Natural Gas (NG1:COM) -1.79% to $1.77.
Metals
Palladium (XPDUSD:CUR) +1.38% to $1,066.50.
Platinum (XPTUSD:CUR) +1.93% to $1,014.60.
Gold (XAUUSD:CUR) +0.93% to $2,398.38.
Agriculture
Corn (C_1:COM) +0.07% to $428.77.
Wheat (W_1:COM) +0.13% to $552.44.
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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.