Commodity shows Gold prices reached a record high at $2,265.00 an ounce at the start of the month, driven by U.S. inflation data suggesting easing prices and the possibility of Federal Reserve interest rate cuts in June.
Federal Reserve Chair Jerome Powell stated that the core PCE report, which showed a 2.8% YoY increase in February, aligns with expectations. He noted that the Fed will be cautious in its decisions due to strong growth, indicating it doesn’t need to act quickly.
Gold, a non-interest-paying option, gained its biggest monthly increase in over three years in March, thanks to central bank buying and rate-cut bets. The World Gold Council reports that gold’s investment and luxury status has allowed it to deliver annualized returns of nearly 8% since 1971.
Gold’s dual appeal as a safe-haven asset and investment means it can generate positive returns in good times, despite its traditional role as a safe-haven asset, likely to continue due to political and economic uncertainty.
Brent crude oil prices fell after a three-week gain, while WTI futures remained stable. Natural gas prices dropped over 2%. Oil prices are supported by expectations of tighter supply from OPEC+ cuts and Russian refinery attacks. Russian Deputy Prime Minister Alexander Novak announced that oil companies will focus on reducing output in the second quarter to distribute production cuts. US crude oil production dropped 6% in January.
J.P. Morgan reported that the rig count in five major tight oil basins remained flat, with the Permian and Niobrara gaining and losing rigs respectively. In Q1 2024, the headline oil rig count rose by six rigs, while the core basin count increased by nine. JPM expects an additional 16 oil rigs in major tight oil basins by June.
Potential stocks to watch: REX American Resources (REX) +34%, Atlas Lithium (ATLX) +14%, Seabridge Gold (SA) +9%, Novagold Resources (NG) +9%, Ivanhoe Electric (IE) +8%, Hecla Mining (HL) +7%, MAG Silver (MAG) +7%, Chemours Company (CC) -9%, Materion Corp (MTRN) -5%.
Energy
Crude oil (CL1:COM) -0.03% to $83.10.
Natural Gas (NG1:COM) -1.95% to $1.72. Metals
Metals
Palladium (XPDUSD:CUR) +1.73% to $1,032.50.
Platinum (XPTUSD:CUR) +1.91% to $925.40.
Gold (XAUUSD:CUR) +0.85% to $2,251.43.
Agriculture
Corn (C_1:COM) -0.53% to $439.91.
Wheat (W_1:COM) -1.31% to $554.23.
Cotton (CT1:COM) +0.91% to $92.21.Metals
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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.