Investing.com– Gold prices fell in Asian trade on Monday as traders braced for a slower pace of U.S. interest rate cuts following stronger-than-expected nonfarm payrolls data, which supported the dollar. 

Among industrial metals, copper prices took limited support from data showing China’s copper imports hit a 13-month high in December. Sentiment towards China was dimmed by anticipation of more U.S. trade tariffs against the country.

Uncertainty over the economic outlook under incoming President Donald Trump still kept some safe haven demand for gold in play, as did an extended sell-off in broader risk-driven assets, particularly stocks. This limited overall losses in the yellow metal. 

fell 0.1% to $2,686.32 an ounce, while expiring in February steadied at $2,714.41 an ounce by 23:49 ET (04:49 GMT). 

Gold pressured by increased rate jitters; inflation data awaited 

Gold prices were pressured chiefly by the prospect of U.S. rates remaining higher for longer, as Friday’s saw traders further scale back bets on rate cuts this year.

Focus is now on upcoming U.S. inflation data, due on Wednesday, for more cues on the Fed’s rate outlook. The central bank signaled that sticky inflation and strength in the labor market will give it more impetus to keep rates high.

Goldman Sachs analysts said in a recent note that they now expect the Fed to cut rates only twice this year, compared to prior expectations of three cuts. The central bank’s terminal rate is also expected to be higher in this easing cycle. 

Higher rates pressure metal markets by increasing the opportunity cost of investing in non-yielding assets. Among other precious metals, fell slightly to $991.45 an ounce, while fell 0.4% to $31.205 an ounce on Monday.

Copper prices flat as markets weigh China outlook 

Benchmark on the London Metal Exchange rose 0.3% to $9,111.00 an ounce, while March rose 0.1% to $4.2960 a pound. 

The red metal was sitting on strong gains from the prior week, as soft Chinese economic data spurred increased bets that Beijing will unlock even more stimulus to shore up growth.

Trade data on Monday showed that China’s copper imports hit a 13-month high at 559,000 metric tons in December, indicating that demand remained robust in the world’s biggest copper importer.

Copper bulls are betting that Beijing will dole out even more stimulus in the coming months, especially in the face of steep import tariffs under Trump.

Trump- who will take office on January 20- has vowed to impose steep trade tariffs on China from “day one” of his Presidency.

By Anna Hirtenstein

LONDON (Reuters) -Oil extended gains for a third session on Monday, with rising above $80 a barrel to its highest in more than four months, driven by wider U.S. sanctions on Russian oil and the expected effects on exports to top buyers India and China.

Brent crude futures rose $1.48, or 1.9%, to $80.96 a barrel by 1236 GMT after hitting the highest level since Aug. 27 at $81.49.

U.S. West Texas Intermediate crude was up $1.67, or 2.2%, at $78.24 a barrel after touching its highest since Aug. 15 at $78.58.

Brent and WTI have climbed more than 6% since Jan. 8, surging on Friday after the U.S. Treasury imposed wider sanctions on Russian oil. The new sanctions included producers Gazprom (MCX:) Neft and Surgutneftegaz, as well as 183 vessels that have shipped Russian oil, targeting revenue Moscow has used to fund its war with Ukraine.

Russian oil exports will be hurt severely by the new sanctions, pushing China and India to source more crude from the Middle East, Africa and the Americas, which will boost prices and shipping costs, traders and analysts said.

“There are genuine fears in the market about supply disruption. The worst case scenario for Russian oil is looking like it could be the realistic scenario,” said PVM analyst Tamas Varga. “But it’s unclear what will happen when Donald Trump takes office next Monday.”

The sanctions include a wind-down period until March 12, so there may not be major disruptions yet, Varga added.

Goldman Sachs estimated that vessels targeted by the new sanctions transported 1.7 million barrels per day (bpd) of oil in 2024, or 25% of Russia’s exports. The bank is increasingly expecting its projection for a Brent range of $70-85 to skew to the upside, its analysts wrote in a note.

Expectations of tighter supplies have also pushed Brent and WTI monthly spreads to their widest backwardation since the third quarter of 2024. Backwardation is a market structure in which prompt prices are higher than those for future months, indicating tight supply.

RBC Capital Markets analysts said the doubling of tankers sanctioned for moving Russian barrels could be a major logistical problem affecting crude flows.

“No one is going to touch those vessels on the sanctions list or take new positions,” said Igho Sanomi, founder of oil and gas trading company Taleveras Petroleum.

“Russian supply is going to be disrupted, but we don’t see this having a significant impact because OPEC has spare capacity to fill that supply gap.”

The OPEC+ cartel comprising the Organization of the Petroleum Exporting Countries and a group of Russia-led producers, is holding back 5.86 million barrels per day, about 5.7% of global demand.

Many of the tankers named in the latest sanctions have been used to ship oil to India and China after previous Western sanctions and a price cap imposed by the Group of Seven countries in 2022 shifted trade in Russian oil from Europe to Asia. Some of the ships have also moved oil from Iran, which is also under sanctions.

“The last round of OFAC (U.S. Office of Foreign Assets Control) sanctions targeting Russian oil companies and a very large number of tankers will be consequential in particular for India,” said Harry Tchilinguirian, head of research at Onyx Capital Group.

JPMorgan analysts said Russia had some room to manoeuvre despite the new sanctions, but it would ultimately need to acquire non-sanctioned tankers or offer crude at or below $60 a barrel to use Western insurance as stipulated by the West’s price cap.

Investing.com – Macroeconomic challenges facing commodities in the first three quarters of 2024 have reversed and become tailwinds entering the new year, according to analysts at Wells Fargo (NYSE:).

Elevated interest rates and broader economic uncertainties weighed on commodity prices over the January-to-September period last year, although that trend largely turned around in the fourth quarter, the analysts led by Mason Mendez said in a note to clients published on Monday.

Commodities in general delivered a modest performance in 2024, they said, with the Bloomberg Commodity Total (EPA:) Return Index clocking a 4.5% year-to-date increase as of Dec. 26.

“While supply conditions remained supportive of higher prices, commodity demand was held back by global economic headwinds,” the analysts wrote.

That tepid demand is seen improving in 2025, becoming a possible spark that ignites an uptick in commodity prices, they added. However, they flagged that the supply side “should not be forgotten.”

“After two years of lackluster commodity prices, many commodity producers have slowed production growth,” the analysts said. “This could become a particularly acute point in 2025 in the event that demand recovers at a stronger pace than most expect.”

They noted that new commodity output often lags demand “by months, and sometimes years.”

Among individual sectors, the analysts said they are most keen on precious metals, such as , and energy, with both expected to gain at least 10% in 2025. This would exceed the return the analysts expect from the mid-point of their 250-270 target range range for the broader Bloomberg Commodity Total Return Index.

Gold, in particular, experienced a turbulent end to 2024 due in part to caution around more Federal Reserve interest rate cuts, which contributed to an uptick in nominal and real bond yields that dented the appeal of non-yielding bullion.

Still, the yellow metal jumped by around 27% annually to close out the year at $2,625 per troy ounce, and the prospect of more Fed rate reductions — albeit at a possibly slower pace — could continue to boost its appeal, the Wells Fargo analysts said.

They set a target range for gold prices at $2,700-$2,800 per troy ounce this year.

Energy, meanwhile, is tipped to benefit from greater demand as global economic conditions improve, the analysts forecast. is tipped to be between $85-$95 a barrel, while crude is seen at $90-$100 per barrel. Oil prices dropped by around 3% in 2024, weighed down partly by a sluggish post-pandemic recovery in global demand.