Commodities
Gold prices fall, but record high in sight amid inflation angst, M.East fears
Investing.com– Gold prices fell in Asian trade on Tuesday but remained close to record highs as safe haven demand was buoyed by fears of an Iranian strike against Israel.
Markets also turned risk-off ahead of key U.S. inflation data this week that is likely to factor into the outlook for interest rate cuts.
Gold also remained upbeat on the prospect of U.S. interest rate cuts, with a softer inflation reading widely expected to further this notion.
fell 0.4% to $2,460.78 an ounce, while expiring in December fell 0.1% to $2,501.45 an ounce by 00:56 ET (04:56 GMT). Gold futures hit a record high of $2,517.10 an ounce, while spot prices remained in sight of a record high of $2,483.78 an ounce.
Iran-Israel fears keep safe haven demand elevated
Gold benefited from safe haven demand as media reports suggested that Iran could launch an attack against Israel as soon as this week.
The strike is likely to be in retaliation for the recent killing of a Hamas leader in Iran, and comes as Israel kept up its offensive in Gaza.
Uncertainty over the scale of the attack, and the threat that it could spark an all-out war in the Middle East, were key drivers of safe haven demand for gold.
CPI, economic data awaited for more rate cues
Focus this week was squarely on data from the U.S., due on Wednesday. The reading is expected to show inflation eased slightly in July.
Any more signs of cooling inflation gives the Federal Reserve more impetus to cut interest rates, especially amid growing fears that the U.S. economy is headed for a recession.
Markets are split over a 25 and 50 basis point cut in September, with Wednesday’s inflation data likely to offer more insight on the potential cut.
Beyond the inflation data, and readings are also set to offer more cues on the world’s biggest economy this week.
Broader precious metal prices fell on Tuesday but were sitting on some gains this week. fell 0.7% to $942.60 an ounce, while fell 0.8% to $27.773 an ounce.
Copper under pressure, more China cues awaited
Among industrial metals, copper prices fell on Tuesday and remained under pressure from persistent concerns over top importer China.
Benchmark on the London metal exchange fell 0.7% to $8,963.50 a ton, while one-month fell 0.7% to $4.0418 a pound.
Focus this week is on and data from China, due on Thursday, for economic cues on the world’s biggest copper importer.
The readings come after a slew of underwhelming data from the country pushed up concerns over its appetite for copper.
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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