Commodity Snapshot
Gold prices surged to a record high above $2,200 an ounce for the first time, driven by the Federal Reserve’s outlook for three rate cuts this year. Spot gold rose by 1.1% to $2,210.02 per ounce, after hitting an all-time high of $2,222.39. The Federal Reserve’s risks of achieving inflation and employment goals have been balanced, as Chairman Jerome Powell stated in a press conference.
Gold is currently supported as a safe haven asset due to geopolitical risks, including Iran-aligned Houthi militant attacks on international commercial shipping in the Red Sea region. Marcus Garvey, head of commodities strategy at Macquarie Group, believes gold is heading into a short-term overshoot scenario, with a technical target of $2,300 an ounce.
ANZ predicts that iron ore prices may reach a floor due to a reset in demand expectations. The Chinese property sector’s weak consumption is countered by robust demand from other sectors.
The Bank sees the current price as a floor and expects iron ore to trade in a $90-110/t range for the rest of the year. Iron ore prices have plunged over 23% since the start of the year and are down 12% over the past month. The base metals sector is expected to benefit from stabilizing growth and increased infrastructure investments in China.
Oil prices were trading in red, but both benchmarks were above $80/bbl due to investors assessing the supply outlook. Analysts at ING said the oil rally has weakened, with the market in overbought territory.
J.P. Morgan’s global commodity research showed oil demand averaging 101.8 mbd by March 19, but year-to-date, total demand increased by 1.5 mbd, 200 kbd below expectations. JPM expects Chinese oil demand to improve as industrial activity recovers after the holiday lull and increased US-China weekly flights.
Potentially relevant stocks: Critical Metals (CRML) +27%, Atlas Lithium (ATLX) +18%, Braskem S.A. ADR (BAK) +17%, Sibanye Stillwater Limited ADR (SBSW) +10%, Nature’s Miracle Holding (NMHI) -36%, American Resources (AREC) -7%, Global Gas (HGAS) -5%.
Recent Commodity Price Movements
Energy
Crude oil (CL1:COM) -0.05% to $81.23.
Natural Gas (NG1:COM) -0.33% to $1.69.
Metals
Palladium (XPDUSD:CUR) -1.03% to $1,010.96.
Platinum (XPTUSD:CUR) +0.50% to $911.65.
Gold (XAUUSD:CUR) +1.05% to $2,208.81.
Copper (HG1:COM) +0.75% to $4.07.
Agriculture
Corn (C_1:COM) +0.89% to $442.89.
Wheat (W_1:COM) +1.14% to $551.21.
Cotton (CT1:COM) +0.46% to $92.60.
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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. Commodity Snapshot Commodity Snapshot Commodity Snapshot
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.
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