Gold prices (XAUUSD:CUR) ticker lower on Monday as benchmark 10-year Treasury yields climbed, making zero-interest-bearing gold less attractive, while investors also looked ahead to the release of minutes from the latest Fed meeting. Spot gold was down -0.21% to $1,975.76 an ounce by 6 am ET. Market participants also had their focus on U.S. leading economic indicators due later in the day.
Meanwhile in the energy market, oil prices edged higher, with Brent (CO1:COM) advancing more than 1% on prospect of OPEC+ deepening supply cuts to support prices after falling on demand concerns.
Oil prices have dropped by almost 20% since late September while prompt inter-month spreads for Brent and WTI slipped into contango last week, Reuters reported. In a contango market prompt prices are lower than those in future months, signalling sufficient supply.
JPM Commodities Research in a note said, “global oil demand growth will likely decelerate to 1 mbd as the last phase of the post-pandemic rebound dissipates and advancing energy efficiencies and an expanding electric vehicle fleet gain ground.”
“We expect Saudi Arabia and Russia to extend their voluntary production/export cuts through 1Q24. Our view on demand in 2024 suggests that as long as the broader OPEC+ maintains the 2 mbd cut in quotas agreed in November 2022 and the extra 1.7 mbd of curbs from some members pledged in April 2023, Saudi and Russia will be able to unwind some of their 1.3 mbd voluntary reductions starting in April 2024.”
In base metals, copper prices held firm helped by a softer dollar, and on hopes of support to the country’s distressed property sector. “Iron ore recorded its fourth consecutive weekly gain amid optimism that support measures from Beijing will boost demand. Major Chinese producers increased crude steel output in early November by 2.4% over late October, according to China Iron & Steel Association data. However, there are still signs of broad weakness in the market. Official data from NBS showed October steel output was down 9% y/y,” ANZ reported.
Elsewhere among agriculture commodities, soybean and coca traded higher, while wheat futures inched down. According to the most recent USDA Livestock, Dairy, and Poultry Outlook report, fourth-quarter pork production is lowered to about 7.1 billion pounds, based on assumptions of continued year-over-year lower average dressed weights.
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Read More: Commodity Roundup: Gold down; JPM sees Saudi, Russia extending output cuts through 1Q24