Commodities

Gold trades sideways, copper dips as China cuts rates

Published

2 years ago

June 20, 2023

Gold prices moved little on Tuesday as markets awaited more cues on U.S. monetary policy this week, while copper prices fell slightly after China cut its lending benchmark for the first time in 10 months.

China trimmed its benchmark loan prime rate (LPR) by 10 basis points across the board – a move that was largely expected by markets – as Beijing struggles to shore up a slowing economic rebound in the country.

But the move sent a somewhat negative signal to metal markets, given that it highlights deepening cracks in the Chinese economy despite the lifting of anti-COVID measures earlier this year.

Copper dips as China rate cut comes amid economic weakness

Copper prices retreated further from a recent one-month high, as the LPR cut appeared to be largely priced in by markets.

The move was preceded by cuts in China’s short and medium-term rates, and was widely anticipated by markets.

Copper futures fell 0.2% to $3.8565 a pound by 21:37 ET (01:37 GMT).

China’s rate cuts come as the government struggles to support slowing economic growth, after a string of weak economic readings showed that a post-COVID recovery had run out of steam. Several major investment banks, most recently Goldman Sachs (NYSE:GS), also cut their outlook for China’s economy this year.

The country is the world’s largest copper importer, with any cues on its economy being largely factored into commodity prices.

Fed, economic uncertainty keeps gold in holding pattern

Federal Reserve Chair Jerome Powell is expected to testify before Congress on Wednesday, potentially serving up more cues on U.S. monetary policy after the central bank paused its rate hike cycle last week.

But gold came under pressure as the Fed also flagged a higher peak interest rate this year, which could herald more hikes from the bank as it moves against sticky inflation.

Spot gold fell 0.1% to $1,948.72 an ounce, while gold futures fell 0.1% to $1,960.15 an ounce.

Uncertainty over rising interest rates, coupled with mixed signals on a potential recession this year kept gold trading within a tight trading range for the past month.

Prices have moved largely between $1,925 and $2,000 an ounce, with few catalysts allowing for a breakout in either direction.

While the prospect of rising interest rates has kept gains in gold limited, the yellow metal remained supported by some safe haven demand as investors positioned for a potential recession this year.

Other precious metals followed a similar trend as gold, with platinum and silver futures both treading water on Tuesday.

Focus this week is also on a slew of Fed speakers for more cues on monetary policy, as well as U.S. business activity data for June.

Commodities

Oil set for weekly gains on colder weather, Chinese policy support

Published

11 hours ago

January 3, 2025

By Enes Tunagur

LONDON (Reuters) -Oil prices held steady on Friday, remaining poised for weekly gains after closing the previous session at their highest in more than two months, underpinned by colder European and U.S. weather and additional economic stimulus flagged by China.

futures were down 9 cents at $75.84 a barrel by 1212 GMT after settling on Thursday at the highest level since Oct. 25. U.S. West Texas Intermediate crude dipped by 6 cents to $73.07, with Thursday’s close its highest since Oct. 14.

Brent was on track for a 2.2% weekly gain while WTI was set for a 3.5% increase.

Signs of Chinese economic fragility heightened expectations of policy measures to boost growth in the world’s top oil importer.

“As China’s economic trajectory is poised to play a pivotal role in 2025, hopes are pinned on government stimulus measures to drive increased consumption and bolster oil demand growth in the months ahead,” said StoneX analyst Alex Hodes.

China announced a couple of new measures to boost growth for its fragile economy this week with a surprise move to raise wages for government workers and announcement of a sharp increase in funding from ultra-long treasury bonds. The additional funding is to be used to spur business investment and consumer-boosting initiatives.

Oil is likely to have gained some price support from expected increased demand for after forecasts for colder weather in some regions.

“Oil demand is likely benefiting from cold temperatures across Europe and the U.S.,” said UBS analyst Giovanni Staunovo.

Also supporting prices this week, stockpiles dropped by 1.2 million barrels to 415.6 million barrels, EIA data showed.

Meanwhile, U.S. gasoline and distillate inventories jumped as refineries ramped up output, though fuel demand hit a two-year low.

Commodities

Russian court tells Yandex to hide images of oil refinery after Ukrainian attacks, TASS says

Published

11 hours ago

January 3, 2025

(Reuters) -A Russian court has ordered internet company Yandex (NASDAQ:) to hide access to maps and photos of one of Russia’s largest oil refineries due to repeated attacks by Ukrainian drones, state news agency TASS reported on Friday.

Yandex, often referred to as “Russia’s Google (NASDAQ:)”, operates the country’s largest search engine and other online services like maps, translate and email, as well as ride-hailing and food delivery.

The court in Moscow ordered Yandex to exclude information about the refinery’s infrastructure from its search results by removing and editing images of workshops, compressor stations and other parts of the plant from Yandex Maps, TASS reported.

It was not clear which refinery the court decision referred to, but TASS said the facility had been attacked four times by Ukrainian drones in 2024.

Ukraine has staged numerous strikes on Russian oil storage facilities and refineries, responding to Moscow’s February 2022 invasion and repeated attacks on Ukrainian cities and infrastructure.

The court’s decision can be appealed. Yandex declined to comment.

The refinery had tried to resolve the issue directly with Yandex before taking the matter to court, TASS said. The claimant argued that the availability of information about the refinery online undermined Russia’s defence capability and negatively impacted the armed forces.

Commodities

Oil prices slipped lower; set for second straight weekly gain

Published

11 hours ago

January 3, 2025

Investing.com–Oil prices slipped slightly lower Friday, but were still heading for a second consecutive weekly gain as optimism around China’s economic growth lifted market sentiment.

At 08:00 ET (13:00 GMT), fell 0.1% to $73.08 a barrel, and expiring in February slipped 0.1% to $75.84 a barrel.

Oil had gained sharply in the previous session after data showed growth in Chinese factory activity.

Both contracts were on course for second consecutive weekly gains, with WTI headed for a 3.5% jump and set to rise nearly 3% for the week.

Chinese stimulus hopes support oil prices

China’s grew in December, a Caixin/S&P Global survey showed on Thursday, but at a slower pace than expected.

An official survey released on Tuesday also showed that China’s manufacturing activity barely grew in December. However, services and construction fared better, with the data suggesting that policy stimulus is trickling into some sectors.

Beijing has signaled looser monetary policy for 2025 and has doled out a raft of major stimulus measures since late September, in order to boost its sluggish economy.

China’s central bank has indicated that it plans to lower interest rates from the current 1.5% “at an appropriate time” in 2025, the Financial Times reported on Friday.

Traders assess EIA data amid oversupply concerns

{{8849|US crude oil inventories declined, while gasoline and distillate stocks saw significant increases as demand softened during the week ending December 27, the reported on Thursday.

The EIA stated that dropped by 1.2 million barrels last week, falling short of analysts’ expectations for a 2.8 million-barrel decrease.

Latest EIA surveys have shown that U.S. oil production remains near record levels, and the incoming Donald Trump administration is likely to agree to policies that would focus on ramping up domestic fossil fuel production.

This comes amid worries about potential oversupply driven by anticipated production increases from non-OPEC nations, further underscoring an oversupply scenario.

The International Energy Agency recently said that the oil market will remain adequately supplied, despite a rise in demand forecast for 2025.

(Peter Nurse contributed to this article.)