Commodity Watch
Gold prices fell for the second month in a row on Thursday as market players awaited U.S. inflation data that may affect interest rates. By 6:11 am ET, spot gold (XAUUSD:CUR) fell 0.2% to $2,031.37.
The U.S. Federal Reserve’s preferred core measure of personal consumption expenditures is expected to grow 0.4% in January on Thursday. Recent economic data shows a strong U.S. economy, pushing investors to delay Federal Reserve rate reduction until later in the year, weighing on nonyielding bullion.
Copper futures (HG1:COM) stayed constant at $3.83 but were on track for a second straight monthly loss, while nickel was on track for its first monthly climb since July due to supply concerns in Indonesia and Russia.
Nickel fell 40% last year owing to decreasing demand and rising Indonesian supply, according to Reuters.
With lithium, nickel has probably witnessed the biggest production volume increase of any metal, according to William Blair & Company. “The biggest impact of this increase in Indonesia is peak primary nickel output, which has caused market imbalances. The International Nickel Study Group predicts the greatest excess in a decade.”
Oil prices fell on the day due to demand worries and signals that U.S. interest rates may stay high.
ANZ analysts maintained their pricing outlook. Expects Brent crude to average $86/bbl and WTI $81/bbl in 2024. Prices should reach the mid- to upper $80s in the second and third quarters this year.
Brokerage adds that non-OPEC oil supply increases startled the market last year. Expect US shale oil sector growth to slow as drilling activity falls.
Soybean and cocoa prices dipped, but wheat futures rose. ING analysts report that the Brazilian Association of Vegetable Oil Industries revised its 2024 soybean output forecast to 153.8mt, down 1.5%. The decline is due to yield forecasts falling from 3.6kg/ha in 2023 to 3.4kg/ha in 2024.
The study also reduced soybean export expectations from 98.1mt to 97.8mt and ending stock estimates by 30% to 4mt in 2024.
Recent Commodity Price Movements
Energy
Crude oil (CL1:COM) -0.03% to $78.52.
Natural Gas (NG1:COM) +0.37% to $1.89.
Metals
Palladium (XPDUSD:CUR) +0.27% to $930.80.
Silver (XAGUSD:CUR) -0.51% to $22.35.
Platinum (XPTUSD:CUR) -0.04% to $878.17.
Agriculture
Corn (C_1:COM) +0.21% to $414.13.
Wheat (W_1:COM) +0.36% to $573.05.
Cotton (CT1:COM) +8.33% to $107.25.
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