Commodity market shows Spot gold prices weakened slightly after a record high, while silver prices reached their highest level in 2024 at $26 an ounce.
Gold analysts are divided on the reason for the recent gold rally, with Commerzbank arguing that a change in U.S. interest rate expectations cannot explain the surge. ETF holdings in gold are also declining, with ING suggesting investors may wait for the Fed to cut rates before buying. Further volatility is expected this week, especially with the U.S. jobs report.
Silver prices reached a 2-year high of $26.55 per troy ounce, gaining over 4% in the previous session. ETF investors are returning to silver, buying nearly 1,200 tons in the last three weeks, indicating a 570-ton increase since the beginning of the year.
Oil prices rose, with Brent reaching $89 a barrel, amid supply risks from Russian refinery attacks and Middle East conflict. Mexico’s state energy company Pemex requested to cancel up to 436,000 crude exports.
Investors await an OPEC+ ministerial panel, which is unlikely to recommend any oil output policy changes due to the extension of current cuts until June.
Watch potential stocks like Hycroft Mining Holding, Critical Metals, MAG Silver, USGO, PLG, HGAS, API, and RETO for potential growth.
Energy
Crude oil (CL1:COM) +0.03% to $85.46.
Natural Gas (NG1:COM) +0.81% to $1.87.
Metals
Palladium (XPDUSD:CUR) -1.14% to $999.50.
Platinum (XPTUSD:CUR) -0.33% to $932.60.
Gold (XAUUSD:CUR) -0.33% to $2,272.44.
Agriculture
Corn (C_1:COM) -0.16% to $427.07.
Wheat (W_1:COM) +0.25% to $546.24.
Cotton (CT1:COM) -0.58% to $90.27.
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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.