Commodity Snapshot- Gold prices rose on Monday due to growing Middle East tensions and safe-haven demand. The rally overshadowed a stronger than expected U.S. payrolls number and crude oil futures fell. Spot gold hit an all-time high at $2,353.79 per ounce. Gold prices reached a record high for a 13th time this year.
Gold’s safe haven potential offsets a stronger US job market, causing concerns about Federal Reserve interest rate cuts. Brent crude futures dropped over 1% but remain above $90 a barrel due to rising Middle East tensions. Despite small disruptions, OPEC reaffirmed production cuts. A tighter market in the second quarter is expected to further support crude oil prices.
The EIA’s Short Term Energy Outlook, OPEC’s and IEA’s monthly oil market reports, and March CPI data may provide insights on Fed rate path. Cocoa prices continue to rise, with NY futures up +1.76% at $9,967.00. Citi’s 2024 and 2025 cocoa price outlooks have increased by 20% and 10%, respectively.
Potential stocks to watch: Dakota Gold (DC), Coeur Mining (CDE), Foremost Lithium Resource & Technology (FMST), Platinum Group Metals (PLG), New Found Gold (NFGC), New Gold (NGD), Newmont (NEM) Pan American Silver (PAAS), Critical Metals Corp. (CRML) Trinseo PLC (TSE), ReTo Eco-Solutions (RETO).
Energy
Crude oil (CL1:COM) -0.94% to $86.09.
Natural Gas (NG1:COM) -0.58% to $1.77.
Metals
Palladium (XPDUSD:CUR) +1.72% to $1,020.50.
Platinum (XPTUSD:CUR) +2.57% to $951.10.
Gold (XAUUSD:CUR) +0.24% to $2,335.11.
Agriculture
Corn (C_1:COM) -0.37% to $432.65.
Wheat (W_1:COM) -0.67% to $563.48.
Cotton (CT1:COM) +1.30% to $87.37.
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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.