Commodity Snapshot shows Gold prices fell for a second consecutive week due to Fed officials’ reluctance to cut their benchmark rate, while cocoa prices further fell from recent highs.
The market’s reliance on the Fed’s future rate reduction language, but the realization that interest rates are likely to remain higher for longer, influenced sentiment.
Cocoa prices have extended their slide to a fourth consecutive session, with futures down 30% this week, their biggest in over a year. Prices fell 9.2% to $7,386.79, and are now 30% lower than a record high set two weeks ago.
Hershey is set to release Q1 earnings results, with consensus estimates of $2.77 and $3.11B. European natural gas prices rose despite concerns over competition from Asia, with storage data at 63% full and milder-than-usual weather forecasts for NW Europe.
Energy
Crude oil (CL1:COM) -0.13% to $78.85.
Natural Gas (NG1:COM) -0.29% to $2.03.
Metals
Palladium (XPDUSD:CUR) +0.16% to $940.00.
Platinum (XPTUSD:CUR) +1.57% to $978.80.
Gold (XAUUSD:CUR) -0.11% to $2,301.13.
Agriculture
Corn (C_1:COM) -0.97% to $455.28.
Wheat (W_1:COM) -0.88% to $598.92.
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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.