COM - Commodity Roundup: Metals trade in green U.S. crude floats above $70/bbl
2023-12-07 06:07:28 ET
Precious metal prices rose on Thursday, with spot gold ( XAUUSD:CUR ) up +0.45% to $2,033.91 by 6 am ET as the U.S. dollar ticked lower, and hopes of another hold by the Federal Reserve and an eventual pivot lower. A Reuters poll showed that the Federal Reserve will hold interest rates until at least July, later than earlier thought, according to a slim majority of economists who said the first cut would be to adjust the real rate of interest, not the start of stimulus.
Lower interest rates reduce the opportunity cost of holding a non-interest-bearing bullion, and the yellow metal scaled an all-time peak of $2,135.40 on Monday on elevated bets for a Fed cut, before dropping more than $100 on uncertainty over the timing of the reductions. The Federal Open Market Committee next week updates its Summary of Economic Projections, including the median estimate for the longer-run policy rate which has been 2.5% for almost five years, save for a brief dip to 2.4% in early 2022.
Among base metals, copper and aluminium futures also ticked up against a weaker dollar ( DXY ), which makes metals priced in greenback less expensive for other currency holders, and focus turned to the release of key U.S. payrolls data on Friday. The most-traded January copper contract on the Shanghai Futures Exchange rebounding slightly from the 67,200 yuan hit earlier in the session, the lowest since Nov. 14.
ANZ in its latest note said that major Chinese steel mills increased their production by 2.4% in late November from mid-November to just over 2mt/d. Even so, inventory levels fell more than 15% over the same period. "Steel mills appear to be confident that recent government support measures will boost demand in the new year. However, as China enters winter, targeted emission controls are likely to emerge. This should see steel production fall and put downward pressure on iron ore prices."
Meanwhile in the energy market, both oil benchmarks were trading in green, after prices of U.S. crude oil slumped below $70/bbl for the first time since early July in the previous session. The latest U.S. weekly inventory report showed a large draw against expectations for a smaller decrease, coupled with a big build in gasoline inventories.
ANZ analysts noted that, A surprise unwind of OPEC’s supply cuts in the second quarter of next year cannot be ruled out. "The oil trading market is already indicating a substantial decrease in net long positions, much of which has been driven by an increase in short positions."
Elsewhere among agriculture commodities, soybean and wheat prices gained, while cocoa futures inched lower. Investors await the release of the World Agriculture Supply and Demand Estimates (WASDE) report, due on Friday, along with the weekly export sales data due on Thursday.
Recent Commodity Price Movements
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Energy
Metals
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Palladium ( XPDUSD:CUR ) +1.79% to $960.56.
- Silver (
XAGUSD:CUR
) +0.38% to $23.97. - Copper ( HG1:COM ) +1.12% to $3.76.
Agriculture
Commodity ETFs
Gold ETFs:
Other Metal ETFs:
Oil ETFs:
Agriculture ETFs:
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Commodity Roundup: Metals trade in green, U.S. crude floats above $70/bbl