Commodity Snapshot shows Gold rose for a second consecutive week due to a rise in US consumer prices, boosting rate cut bets. Nickel futures reached an eight-month high due to unrest in New Caledonia, fueling supply fears.
US natural gas prices rose due to domestic storage growth, a 70B cf build, and a fourth consecutive week of gains. The rally is fueled by strong flows at Freeport LNG.
Copper futures gained over 1% due to Chinese economy recovery and policymakers’ support. Despite a Comex easing squeeze, sentiment remained strong, supported by US inflation data and rate cuts.
Nickel prices surged over 6% in London, reaching their highest levels in eight months, driven by funds inflow, supply disruption concerns in New Caledonia, and China’s support measures.
The International Nickel Study Group reports that New Caledonia, a French-ruled Pacific island, contributed 6% of global mine nickel output last year.
Energy
Crude oil (CL1:COM) +0.06% to $79.27.
Natural Gas (NG1:COM) +0.70% to $2.51.
Metals
Palladium (XPDUSD:CUR) -1.06% to $983.00.
Platinum (XPTUSD:CUR) -0.35% to $1,067.70.
Gold (XAUUSD:CUR) +0.18% to $2,382.04.
Agriculture
Corn (C_1:COM) +0.58% to $459.66.
Wheat (W_1:COM) +1.38% to $672.40.
Soybeans (S_1:COM) +0.89% to $1,227.37.
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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.