Commodity Watch
A higher U.S. dollar index (DXY) dragged down gold prices for a third day, as market investors awaited global inflation data to determine when central banks may ease policy.
The data calendar is sparse on Wednesday, but investors will likely focus on U.S., German, French, and Spanish consumer inflation reports on Thursday before euro area readings on Friday.
Gold prices fell for a third consecutive day due to a stronger US dollar index, with investors awaiting global inflation data for clues on when central banks may start easing policy. The economic calendar looks light on Wednesday, but investors will likely focus on consumer inflation numbers from the U.S., Germany, France, and Spain on Thursday ahead of euro area figures due on Friday.
Higher-than-expected inflation in the U.S. has prompted traders to trim bets on the number of rate cuts expected from the Fed this year, with the chance of a cut in June now standing at around 60%. Gold is seen as an inflation hedge, but rate hikes weigh on the non-interest-bearing asset. Spot gold (XAUUSD:CUR) was down -0.12% to $2,027.12 an ounce by 6 am ET, while palladium shed over 2.5%.
Prices of most base metals also came under pressure on a firmer dollar, while demand concerns stemming from a spike in inventories in Chinese exchange warehouses weighed on copper. Copper inventories in SHFE warehouses more than doubled in just over two weeks to 181,323 tons on Friday, suggesting Chinese demand has not made a strong recovery since the Lunar New Year holiday. The copper price decline was limited on mine supply disruption and hopes of demand recovery later in the quarter.
ING reported that aluminum consumption in China will remain soft this year primarily due to the prolonged weakness in the country’s real estate sector. Its short-term outlook remains neutral to bearish for demand, and it does not foresee a substantial recovery before the second quarter of 2024, which should be the starting point for Federal Reserve rate cuts. There is a risk, however, for demand to weaken further if high inflation keeps interest rates high.
Recent Commodity Price Movements
Energy
Crude oil (CL1:COM) -1.13% to $77.98.
Natural Gas (NG1:COM) -0.79% to $1.79.
Metals
Palladium (XPDUSD:CUR) -2.48% to $913.02.
Silver (XAGUSD:CUR) -0.50% to $22.32.
Platinum (XPTUSD:CUR) -0.54% to $883.65.
Agriculture
Corn (C_1:COM) -0.21% to $407.37.
Wheat (W_1:COM) -0.65% to $582.20.
Cotton (CT1:COM) +5.04% to $103.99.
Commodity ETFs
Gold ETFs:
SPDR Gold Shares ETF (GLD)
VanEck Gold Miners ETF (GDX)
VanEck Junior Gold Miners ETF (GDXJ)
iShares Gold Trust ETF (IAU)
Direxion Daily Gold Miners Index Bull 2X Shares ETF (NUGT)
Sprott Physical Gold Trust (PHYS)
Other Metal ETFs:
iShares Silver Trust ETF (SLV)
Sprott Physical Silver Trust (PSLV)
Global X Silver Miners ETF (SIL)
U.S. Copper Index Fund, LP ETF (CPER)
abrdn Physical Palladium Shares ETF (PALL)
Oil ETFs:
U.S. Oil Fund, LP ETF (USO)
Invesco DB Oil Fund ETF (DBO)
U.S. 12 Month Oil Fund, LP ETF (USL)
U.S. Brent Oil Fund, LP ETF (BNO)
U.S. Natural Gas Fund, LP ETF (UNG)
U.S. Gasoline Fund, LP ETF (UGA)
Agriculture ETFs:
Invesco DB Agriculture Fund ETF (DBA)
Teucrium Soybean ETF (SOYB)
Teucrium Wheat ETF (WEAT)
Teucrium Corn Fund ETF (CORN)
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