Investing.com– Oil prices fell Tuesday on concerns high U.S. interest rates will eat into demand this year, amid continued uncertainty in the Middle East. 

At 08:15 ET (12:15 GMT),  fell 1.8% to $82.17 a barrel, while fell 1.9% to $77.77 a barrel. 

US rate fears cloud demand outlook 

Fears of high-for-longer U.S. rates were a key point of pressure for crude markets, after a string of Fed officials warned of such a scenario amid sticky inflation.

Vice Chair Philip Jefferson said on Monday that it was too early to tell if the slowdown is “long lasting,” and Vice Chair Michael Barr noted that restrictive policy needs more time, dulling hopes for early cuts.

There are more Fed speakers to digest Tuesday, including Barr once more, as well as FOMC members Thomas Barkin, John Williams and Raphael Bostic, ahead of the release of the  of the Fed’s late-April meeting on Wednesday.

High rates are expected to dull activity in the largest economy in the world, likely hitting crude demand, while also limiting money for investment and economic growth, which usually support oil demand. 

The International Energy Agency last week trimmed its outlook for crude demand this year, citing concerns over weaker economic conditions due to pressure from interest rates. 

On the flip side, the Organization of Petroleum Exporting Countries maintained its demand forecast, citing strength in top exporter China. 

China has been a point of confidence for oil demand, especially as Beijing rolled out a string of stimulus measures in recent weeks to support growth. 

Political uncertainty in Middle East

Iranian President Ebrahim Raisi, who was seen as a successor to Supreme Leader Ayatollah Ali Khamenei, was killed in a helicopter crash over the weekend, while there are concerns over the health of Saudi King Salman bin Abdulaziz after Crown Prince Mohammed Bin Salman deferred a trip to Japan.

While these events have not had an impact on supplies yet, they have created a degree of political uncertainty in two major oil-producing countries.

OPEC meeting awaited for more cues

Oil markets were also awaiting an in June, where the cartel, along with its allies including Russia, will discuss output policy, including whether to extend the voluntary supply cuts of 2.2 million barrels per day from mainly Saudi Arabia.

The group, known as OPEC+, could well extend some voluntary cuts past their initial June-end deadline if demand fails to pick up.

“As the market waits for clarity from OPEC+ on its output policy for the second half of the year, there are some signs of weakness in the market,” said analysts at ING, in a note.

“Refinery margins have been trending lower for some time, raising the prospect of cuts in refinery runs, particularly in Asia. In addition, the physical crude market is also weaker.” 

(Ambar Warrick contributed to this article.)

Investing.com– Copper prices are set to see some near-term volatility after surging to record highs in recent sessions, Morgan Stanley analysts said in a note, although the red metal is still expected to push higher this year. 

A mix of strong demand-supply fundamentals and outsized speculative trading drove stellar gains in over the past few sessions, putting prices at lifetime highs.

Bulls expect copper demand to increase in the coming months amid a greater global push into green energy and electrification, and that copper mines will be unable to meet this increased demand.

This notion was a key driver of copper gains, and also triggered a short squeeze on the Comex, which furthered copper’s rally. on the London Metal Exchange hit a record high of $11,101.50 a ton on Monday. 

But copper prices fell sharply from these records on Tuesday, with MS analysts stating that the red metal was set for some near-term volatility after the abrupt gains. 

Still, they expect the red metal to rally further in 2024, and presented a bull case of $13,125 a ton for LME copper, along with a base case of $10,500 a ton. 

MS analysts said the physical copper market was likely tighter than initially anticipated, especially amid low U.S. inventory and staggered China shipping. 

The growing popularity of artificial intelligence, and the industry’s large energy requirement is also expected to drive up copper demand. Copper plays a key role in electricity transmission infrastructure. 

“We remain bullish on copper as persistent supply challenges widen our deficit for 2024,which looks set to persist into 2025. Demand and narrative tailwinds from data centres/AI should also boost participation, with long positioning rising,” MS analysts wrote in a note.

China is the world’s biggest copper importer, and is expected to see an economic rebound in 2024 on sustained stimulus support from Beijing. Such a scenario is expected to push up the country’s appetite for copper, although weakness in the property market may limit its demand. 

Investing.com– Gold prices fell in Asian trade on Tuesday, retreating from record highs as some easing uncertainty over Iran cooled safe haven demand for the yellow metal, while pressure from concerns over U.S. interest rates persisted. 

Among industrial metals, a rally in copper, to record highs, also reversed course on Tuesday amid some profit-taking, and as traders gauged just how much potential the red metal had this year. 

Gold surged to a record high on Monday, benefiting from increased safe haven demand as traders feared some geopolitical instability in the Middle East after Iran’s President was killed in a helicopter crash. But the immediate impact of his death remained unclear. 

fell 0.5% to $2,413.77 an ounce, while expiring in June fell 0.9% to $2,416.75 an ounce by 00:59 ET (04:59 GMT). Spot gold hit a record high of nearly $2,450 on Monday. 

Gold stalls as safe haven demand ebbs, rate fears persist

The lack of any major instability in the Middle East sapped safe haven demand for gold, leaving it more vulnerable to concerns over U.S. interest rates.

A string of Federal Reserve officials warned on Monday that the central bank needed much more convincing that inflation was easing before it could begin trimming interest rates. The central bank is likely to keep rates high for longer.

The firmed as markets now positioned for the of the Fed’s late-April meeting, due Wednesday, which in turn pressured broader metal prices and cut short a rally in prices.

High-for-long interest rates diminish the appeal of non-yielding assets such as gold by increasing the opportunity cost of investing in them.

Other precious metals also sank on Tuesday. fell 1.6% to $1,042.60 an ounce, while fell 2.5% to $31.628 an ounce. But both metals retained a bulk of their gains made through the past few sessions.

Copper comes off record highs

Copper prices retreated sharply from record highs made on Monday, as investors stepped back to see just how much potential the red metal had this year. 

Copper’s recent rally was sparked chiefly by a speculative frenzy over a potential supply deficit of the red metal, which in turn had caused a short squeeze on the Comex exchange and triggered even more gains. 

But these gains were seen cooling on Tuesday, with focus on whether copper shipments could be sourced in time to meet immediate demand. 

on the London Metal Exchange fell 1.3% to $10,825.0 a ton, after hitting a record high above $11,100 on Monday.

fell 1.1% to $5.0510 a pound, also retreating from record highs.