Commodities
Gold prices steady with CPI in sight, copper creeps higher
© Reuters.
Investing.com– Gold prices moved little on Tuesday as the dollar arrested recent losses before key U.S. inflation data due later this week, while copper prices held on to recent gains on hopes that the worst had passed for China’s economy.
Bullion prices found some relief in recent sessions as the retreated from a near six-month peak on some profit taking. But the greenback steadied in Asian trade on Tuesday, remaining within sight of recent highs.
The outlook for U.S. inflation and interest rates remained high, pointing to more pressure on gold prices in the coming months. This trade had also battered gold through the past year, as rising interest rates pushed up the opportunity cost of investing in bullion.
steadied at $1,922.61 an ounce, while expiring in December fell 0.1% to $1,945.35 an ounce by 00:54 ET (04:54 GMT).
U.S. CPI, Fed meeting awaited
Focus is now squarely on a inflation reading for August, which is expected to show inflation growing at a faster pace than July. U.S. inflation is expected to have picked up amid higher fuel costs and resilient retail spending.
The reading is also expected to set the tone for a next week, with higher inflation giving the central bank more impetus to keep rates higher, or even hike them further this year.
While the bank is widely expected to keep rates on hold in September, a stronger inflation reading could elicit a more hawkish outlook from the Fed. The central bank is also set to keep until at least mid-2024.
Such a scenario presents a weak outlook for gold, given that the dollar and Treasury yields are likely to rise further in a high interest rate environment. Waning fears of a U.S. recession have also stymied safe haven demand for gold, although worsening trade tensions between the U.S. and China saw bullion catch some bids.
Copper rebound holds amid some China optimism
Among industrial metals, copper prices rose further on Tuesday, taking continued support from positive economic readings on China.
rose 0.1% to $3.8057 a pound, after an over 1% rally in the prior session.
Data released on Monday showed substantial improvement in Chinese through August, amid continued monetary support from the government.
The readings also came after data released over the weekend showed that recovered from deflationary territory in August. This ramped up hopes that China’s economy was turning around after a severe slowdown this year.
But markets still remained somewhat sour on the world’s largest copper importer. A showed that China’s economy is expected to grow 5% in 2023, in line with a conservative government forecast. Growth is also expected to slow further in 2024.
(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.
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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