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GOLD

Gold prices surged on Monday, poised for their strongest performance in nearly two weeks, benefiting from a weakening dollar as investors eagerly await the upcoming U.S. inflation report.

This critical data release may hold sway over the Federal Reserve's interest rate deliberations later in the month.

Meanwhile, concerns linger over the euro zone's economic outlook, with the European Commission downgrading growth expectations due to Germany's descent into recession.

As the Federal Reserve's September meeting approaches, policymakers have conveyed a cautious stance on raising interest rates.

Outlook: Gold prices are poised for a strong performance as a weakening dollar and the anticipation that the U.S. Federal Reserve's will leave interest rate unchanged.

CRUDE OIL

Brent crude held just above $90 per barrel, with investors eagerly awaiting forthcoming macroeconomic data that could shed light on the direction of interest rates in Europe and the U.S.

Last week, Brent reached this price level for the first time in 10 months following Saudi Arabia and Russia's decision to extend voluntary supply cuts of 1.3 million barrels per day until year-end.

Eyes are now on the U.S. August consumer price index (CPI) data to gauge potential interest rate adjustments.

Additionally, the European Central Bank's rate decision is due Thursday, and the European Commission's revised growth projections for the euro zone indicate slower expansion in 2023 and 2024.

The International Energy Agency (IEA) and OPEC will also release their monthly reports this week, with the IEA recently lowering its 2024 oil demand growth forecast to 1 million bpd due to lackluster macroeconomic conditions, while OPEC maintains a 2.25 million bpd demand growth prediction for 2024.

Outlook: Crude prices are likely to remain higher, as investors monitor forthcoming macroeconomic data and key reports from the U.S., Europe, and energy agencies.

BASE METALS

Copper prices saw an uptick on Monday, driven by several factors including a stronger Chinese currency, a weakening dollar, and robust loan data from China, the world's leading consumer of copper.

A declining U.S. dollar tends to make dollar-denominated commodities like copper more attractive to investors using other currencies, potentially bolstering demand and prices.

China's central bank played a role in strengthening the yuan against the dollar.

With important data releases ahead, including Chinese house price data, industrial output, and urban investment figures, industrial metals markets are closely monitoring these developments.

Outlook: We expect copper to trade higher towards 739 levels, a break of which could prompt the price to move higher to 743 levels.