Commodity Snapshot shows Gold prices eased after a 2.5% rise last week due to reduced Fed rate cut bets, while oil prices gained as traders monitored demand-supply conditions.
Gold’s appeal has been diminished due to hawkish remarks from US central bank officials and speculation of a delay in easing plans, with financial markets expecting gold prices to slightly decrease this quarter.
Gold and silver prices are expected to average $2,250/oz in Q2, with an annual average of $2,218/oz in 2024. Prices peak in Q4 due to Fed rate cuts and weakening dollar and yields.
Oil prices rose after settling $1 lower, amid Fed debates on U.S. interest rates and supply disruptions from the Israel-Gaza conflict. Iraq, the second-largest OPEC producer, is committed to voluntary production cuts and global market stability cooperation.
Crude oil prices rebounded last week due to weak demand, but US gasoline and distillate inventories increased ahead of driving season, offset by a fall in crude oil inventories.
Energy
Crude oil (CL1:COM) +0.18% to $78.40.
Natural Gas (NG1:COM) +1.20% to $2.28.
Metals
Palladium (XPDUSD:CUR) +0.25% to $984.50.
Platinum (XPTUSD:CUR) +0.23% to $1,007.80.
Gold (XAUUSD:CUR) -0.80% to $2,340.79.
Agriculture
Corn (C_1:COM) -3.98% to $451.04.
Wheat (W_1:COM) +0.00% to $663.53.
Soybeans (S_1:COM) -0.57% to $1,197.10.
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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.