Commodities
Copper prices dip on stronger dollar and LME stockpile increase
© Reuters
Copper prices on the London Metal Exchange (LME) experienced a decline today, with a 1.3% drop to $8,500 per metric ton. This downturn is attributed to the recent strength of the US dollar and an increase in stocks within LME warehouses. The metal, often regarded as an indicator of economic health, has come under close observation following these developments.
Last week, reached a four-month high at $8,640 but has since faced challenges due to various market factors. Notably, LME stockpiles have swelled to 174,900 tons compared to mid-year figures. This growth in inventory is occurring alongside mixed signals from China’s November factory activity results among other factors.
Additionally, the proportion of cancelled warrants in the LME has seen a significant rise, hinting at possible future withdrawals from inventories. As the US dollar strengthens, the cost for holders of other currencies increases, leading to a dampened demand for dollar-priced metals such as copper.
This comes after recent supply concerns had momentarily supported copper prices. On Friday, First Quantum Minerals (OTC:) Ltd suspended its annual production guidance for its Cobre Panama mine due to ongoing contract disputes with the government and initiated arbitration proceedings. Despite these operational challenges contributing to supply constraints, the price of copper still fell by 0.4% to $8,579.50 per ton today due to the broader market conditions.
In response to these supply uncertainties and reflecting market tightness, global miners and Chinese smelters have agreed on lower treatment and refining charges (TC/RCs) for copper concentrate for 2024. This marks the first decrease after three years of stability in TC/RCs. Correspondingly, the Shanghai Futures Exchange’s January copper contract earlier saw an uptick of 0.8%, closing at 68,880 yuan ($9,658.15) per ton amidst these developments.
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Commodities
Oil prices rise; supply, demand concerns in focus for 2025
Investing.com– Oil prices rose Tuesday, but stuck to a tight trading range as traders remained uncertain over a potential supply glut and softening demand in the coming year.
At 05:55 ET (10:55 GMT), rose 0.8% to $72.86 a barrel, and rose 0.8% to $69.78 a barrel.
Trading volumes were thin ahead of the Christmas holiday, while strength in the dollar also weighed on oil prices after the Federal Reserve signaled a slower pace of rate cuts in 2025.
Oil nurses losses in 2024 as demand jitters weigh
and WTI prices were down about 5% so far in 2024, with persistent concerns over slowing demand in China being a key point of pressure.
Chinese oil imports steadily dropped this year as the world’s largest oil importer struggled with slowing economic growth. While the country did outline plans to ramp up fiscal spending and stimulus measures in the coming year, markets were still holding out for more clarity on the planned measures.
Increased electric vehicle adoption in China also undermined fuel demand in the country.
Both the OPEC and the IEA have forecast slower demand growth in 2025 due to slowing demand in China. The country is also expected to face increased economic headwinds from a renewed trade war with the U.S. under Donald Trump.
Supply uncertainty spurs caution; US inventory data awaited
Oil markets were on edge over a potential supply glut in 2025. While the OPEC recently agreed to extend its ongoing supply cuts until at least mid-2025, production elsewhere could potentially increase.
US oil production remained close to record highs, and could potentially increase in the coming year, especially as Trump vowed to ramp up domestic energy production.
US inventory data, from the , is due later Tuesday and is set to offer more cues on oil production and supply.
(Peter Nurse contributed to this article.)
Commodities
Gold prices edge up, remains pressured by strong dollar after hawkish Fed
Investing.com– Gold prices edged higher in Asian trade on Tuesday, extending their tepid performance as investors still remained cautious with the rising dollar following the U.S. Federal Reserve’s hawkish tilt.
Traders also refrained from placing large bets ahead of a shortened trading week due to the Christmas holiday.
inched up 0.2% to $2,617.22 per ounce, while expiring in February ticked up 0.1% to $2,631.89 an ounce by 21:46 ET (02:46 GMT).
The yellow metal had inched up 0.3% on Monday, after losing more than 1% in the previous week, reflecting uncertainty about the metal’s outlook.
Bullion under pressure on Fed rate outlook
Gold prices had hit a one-month low on Wednesday, as the Fed meeting indicated that rates will remain higher for a longer period after Wednesday’s cut.
Prices have failed to fully recover from it and have seen subdued moves as investors still assessed the implications of the Fed’s rate outlook.
Higher interest rates put downward pressure on gold as, as the opportunity cost of holding gold increases, making it more attractive compared to interest-bearing assets like bonds.
Traders are now expecting only two quarter-point reductions in 2025 amid continued economic resilience and still-elevated inflation. This compares to expectations of four rate cuts before the Fed meeting.
Strong dollar creates downward pressure on gold, other metals
The Fed’s hawkish shift provided renewed strength to the U.S. dollar, as higher interest rates make the greenback more attractive due to increased returns on dollar-denominated assets.
The rose 0.1% in Asia hours on Tuesday and hovered near a two-year high it reached last week.
A stronger dollar often weighs on gold prices as it makes the yellow metal more expensive for buyers using other currencies.
Other precious metals were largely muted. inched up 0.1% to $951.90 an ounce, while gained 0.2% to $30.062 an ounce.
Copper subdued on strong dollar, seasonal factors
Among industrial metals, copper prices were subdued and moved within tight ranges on Tuesday as a strong greenback weighed on the red metal.
Analysts attributed the weakness in copper to seasonal sluggishness as industrial production and construction projects often slow down as businesses and projects prepare for year-end closures and holidays.
Benchmark on the London Metal Exchange were largely unchanged at $8,940.50 a ton, while one-month were also steady at $4.0905 a pound.
Commodities
Oil prices ease on surplus concerns, dollar strength
By Nicole Jao
NEW YORK (Reuters) -Oil prices edged lower on Monday in thin trade ahead of the Christmas holiday on concerns about a supply surplus next year and a strengthened dollar.
futures settled down 31 cents, or 0.43%, at $72.63 a barrel. U.S. West Texas Intermediate crude futures fell 22 cents, or 0.32%, to $69.24 a barrel.
Macquarie analysts projected a growing supply surplus for next year, which will hold Brent prices to an average of $70.50 a barrel, down from this year’s average of $79.64, they said in a December report.
Concerns about European supply eased on reports the Druzhba pipeline, which sends Russian and Kazakh oil to Hungary, Slovakia, the Czech Republic and Germany, has restarted after halting on Thursday due to technical problems at a Russian pumping station.
The U.S. dollar was hovering around two-year highs on Monday morning, after hitting that milestone on Friday.
“With the U.S. dollar changing from weaker to stronger, oil prices have given up earlier gains,” UBS analyst Giovanni Staunovo said.
A stronger dollar makes oil more expensive for holders of other currencies.
On Friday, U.S. data that showed cooling inflation helped alleviate concerns after the Federal Reserve interest rate cut last week.
“With the Fed sending mixed signals and some of these economic data points not being all that robust, the market is listless,” said John Kilduff, partner at Again Capital in New York.
Brent futures fell by around 2.1% last week, while WTI futures lost 2.6%, on concerns about global economic growth and oil demand after the U.S. central bank signalled caution over further easing of monetary policy.
Research from Asia’s top refiner Sinopec (OTC:) pointing to China’s oil consumption peaking in 2027 also weighed on prices.
U.S. President-elect Donald Trump on Friday urged the European Union to increase U.S. oil and gas imports or face tariffs on the bloc’s exports.
Trump also threatened to reassert U.S. control over the Panama Canal on Sunday, accusing Panama of charging excessive rates to use the Central American passage and drawing a sharp rebuke from Panamanian President Jose Raul Mulino.
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