Commodity Gold prices rose on Monday, reaching a record high due to a weaker dollar and increased Middle East tensions following Iran’s recent attack on Israel.
Bullion reached an all-time high of $2,431.29 per ounce, marking its longest weekly gain streak in over a year and advancing about 14% so far this year.
ANZ predicts gold to trade near $2,500/oz and silver to move above $31/oz by 2024 due to increased investment demand, geopolitical tensions, and easing monetary cycles, potentially leading to silver outperforming gold.
Investors await U.S. retail sales data and Federal Reserve speakers’ comments. Oil prices fell over 1%, with Brent trading below $90 a barrel. Analysts believe the risk of Iran’s retaliation has already been priced in.
Iran, a major producer of crude oil in OPEC, faces supply risks from stricter oil sanctions and potential Israeli response targeting Iran’s energy infrastructure. Analysts predict that OPEC may seek to restore spare capacity to prevent high prices and demand destruction.
The London Metal Exchange and Chicago Mercantile Exchange have banned Russian metal delivery from April 13 due to US and UK sanctions for Ukraine’s invasion.
Energy
Crude oil (CL1:COM) -1.09% to $84.73.
Natural Gas (NG1:COM) -0.68% to $1.76.
Metals
Palladium(XPDUSD:CUR) -1.42% to $1,042.00.
Platinum (XPTUSD:CUR) -1.07% to $979.10.
Gold (XAUUSD:CUR) +0.23% to $2,348.40.
Agriculture
Corn (C_1:COM) -0.50% to $433.34.
Wheat (W_1:COM) -1.36% to $548.44.
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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.