Commodities
Gold prices edge lower as dollar firms after Trump attack
Investing.com– Gold prices fell slightly in early Asian trade on Monday, remaining in sight of a record high but seeing few increases in safe haven demand after an alleged assassination attempt on former U.S. President Donald Trump.
Safe haven buying, in the face of increased U.S. political uncertainty, favored the dollar, with the greenback recovering a measure of recent losses on Monday. Still, the dollar remained weak amid growing bets on U.S. interest rate cuts, which buoyed gold in recent weeks.
fell 0.2% to $2,407.49 an ounce, while expiring in August fell 0.4% to $2,412.20 an ounce by 20:34 ET (00:34 GMT).
US political uncertainty grows after Trump attack
Markets were still grappling with an uncertain political outlook for the U.S. after a failed assassination attempt on Trump at a campaign rally in Butler, Pennsylvania on Saturday.
The assailant shot at Trump and hit him in the ear, although the former president was still seen urging supporters to “fight!”
Heightened political jitters in the wake of the attack were initially expected to support safe haven plays into gold. But such a scenario did not play out as expected, as the dollar benefited from some inflows, while the yellow metal largely retreated after the attack.
Analysts speculated that the attack improved Trump’s chances of a victory over Democratic frontrunner Joe Biden later this year. A Trump presidency is expected to potentially add to inflation and debt- a scenario that usually results in a stronger dollar.
The rose about 0.2% against a basket of currencies, although it was nursing steep losses over the past two weeks.
Traders were somewhat cautious towards gold with the yellow metal trading close to a record high of $4,050 an ounce hit earlier this year. Historically, gold has always fallen sharply after marking brief record highs.
The yellow metal, along with broader metal markets, benefited greatly from increased speculation over interest rate cuts by the Federal Reserve. Soft consumer price index inflation reading from last week saw traders ramp up bets the Fed will cut rates by 25 basis points in September- a notion that battered the dollar.
Other precious metals also retreated on Monday, seeing little immediate safe haven demand.
fell 0.6% to $1,007.65 an ounce, while fell 0.9% to $30.890 an ounce.
Copper edges lower as China woes mount ahead of GDP data
Among industrial metals, copper prices fell on Monday, extending losses from last week amid persistent concerns over top importer China.
Data on Friday showed China’s imports of the red metal fell in June, raising questions over domestic demand.
Benchmark on the London Metal Exchange fell 0.4% to $9,841.50 a tonne, while one-month fell 0.4% to $4.5633 a pound.
Focus is now squarely on key Chinese data for the second quarter, due later on Monday. The reading is expected to show some cooling in growth, which bodes poorly for copper demand.
By Robert Harvey
LONDON (Reuters) -Oil futures jumped by almost 1% on Monday as a potential hurricane approaching the U.S. Gulf Coast helped oil prices to recover some of the previous week’s heavy losses.
rose 58 cents, or 0.82%, to $71.64 a barrel by 1125 GMT while West Texas Intermediate crude futures were up 61 cents, or 0.9%, at $68.28.
Prices of Brent crude had fallen in each of the past six trading sessions, retreating by more than 11%, or nearly $9 a barrel, to register the lowest closing price since December 2021 on Friday.
Analysts said Monday’s rebound was partly in response to a potential hurricane near the U.S. Gulf Coast while Libyan supply disruption has also been supporting prices.
Libya’s NOC late last week declared force majeure on several crude cargoes loading from the Es Sider port, with oil production curtailed by a political standoff over the central bank and oil revenue, four trading sources with knowledge of the matter told Reuters.
A weather system in the southwestern Gulf of Mexico is forecast to become a hurricane before it reaches the northwestern U.S. Gulf Coast, the U.S. National Hurricane Center said on Sunday. The U.S. Gulf Coast accounts for about 60% of U.S. refining capacity.
“A small recovery in prices is under way this morning, inspired by hurricane warnings that might threaten the U.S. Gulf Coast, but the wider conversation remains on where demand will come from and what OPEC+ can do,” said PVM analyst John Evans.
The OPEC+ oil producer group last week agreed to delay a planned output increase of 180,000 barrels per day for October by two months in reaction to tumbling crude prices
Trading houses Gunvor and Trafigura expect oil prices to range between $60 and $70 a barrel because of sluggish Chinese demand and persistent oversupply, executives told the APPEC conference in Singapore on Monday.
Meanwhile, Morgan Stanley cut its Brent price forecast for the fourth quarter to $75 a barrel from $80, adding that prices are likely to remain around that level unless demand weakens further.
The weakness in Chinese demand is driven by an economic slowdown and growing shift towards lower-carbon fuels, said speakers at the APPEC energy industry event.
Refining margins in Asia have slipped to their lowest seasonal levels since 2020.
A U.S. jobs report on Friday showed that August non-farm payrolls increased by less than market watchers had expected.
A decline in the jobless rate could slow the pace at which the Federal Reserve cuts interest rates, analysts said. Lower interest rates typically increase oil demand by spurring economic growth.
(Reuters) – Goldman Sachs adjusted its expectations for OPEC+ oil production saying it now expects three months of production increases starting from December instead of October, the bank said in a note on Friday.
OPEC+ has agreed to delay a planned oil output increase for October and November, the producers group said on Thursday after crude prices hit their lowest in nine months, adding it could further pause or reverse the hikes if needed.
However Goldman Sachs maintained its range of $70-85 per barrel and a December 2025 Brent forecast at $74 per barrel.
The investment bank expects the effects of a modest reduction in OPEC+ supply in the upcoming months to be counterbalanced by easing effects from the current softness in China’s demand and faster-than-expected recovery of Libya’s supply.
“We still see the risks to our $70-85 range as skewed to the downside given high spare capacity, and downside risks to demand from weakness in China and potential trade tensions,” Goldman Sachs said.
Brent crude futures were down $1.63, or 2.24%, to $71.06 a barrel on Friday, their lowest level since December 2021. U.S. West Texas Intermediate crude futures fell $1.48 on Friday, or 2.14%, to $67.67, their lowest since June 2023. [O/R]
Investing.com — Oil prices settled lower Friday, ending the week with a loss as weaker U.S. nonfarm payrolls stoked concerns about an economic-led slowdown in crude demand.
At 2:30 p.m. ET (1430 GMT), the futures (WTI) traded fell 2.1% to settle at $67.67 a barrel, while contract fell 2.2% to $71.06 per barrel.
U.S. economic slowdown worries resurface after weak jobs report
The US economy added fewer jobs than anticipated in August, but rose from a sharply revised July figure, according to Labor Department data that could factor into the Federal Reserve’s next policy decisions.
Nonfarm payrolls came in at 142,000 last month, up from a downwardly-revised mark of 89,000 in July. Economists had called for a reading of 164,000, up from the initial July mark of 114,000.
Following the release, bets that the Fed will introduce a deeper 50 basis-point rate cut — rather than a shallower 25 basis-point reduction — increased.
Concerns about the demand come just a day after OPEC+ said it had agreed to postpone a planned increase in oil production for October and November.
U.S., Europe working on Iran sanctions
Geopolitical tensions ratcheted up on Friday after the U.S. and Europe they were working on sanctions to impose on Iran after the Tehran sent missiles to Russia.
The U.S. had previously warned Iran about transferring missiles to Russia, saying it would represent a major escalation in Iran’s support of Russia’s war against Ukraine.
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