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Bullion –

Spot gold posted modest gains on Thursday, settling above $4,205/Oz after recovering from an early dip ahead of September PCE report before next week’s FOMC meeting. Mixed U.S. labour data added to the cautious tone, with layoffs surging to their highest November level since 2022 even as jobless claims fell to their lowest since Sep 2022. Silver fell over 2% as traders took profits from a rally that had become overheated coupled with a rebound in the dollar index and firmer U.S. Treasury yields. Expectations for a Fed rate cut remain elevated, with markets pricing in an 87% probability of a 25-bps reduction. Geopolitical uncertainty following stalled U.S.–Russia talks and a rise in U.S. 10- year breakeven inflation supported safe-haven demand for gold. Today, gold is trade above $4205 as investors awaits U.S. inflation data for clearer signals on the Fed’s December policy stance.

Crude Oil –

WTI crude oil prices surged to $60/bbl on Thursday as prospects for a near-term Ukraine peace deal faded following unsuccessful US-Russian talks and Ukraine’s fifth attack on Russia's Druzhba oil pipeline. Gains were limited, however, by ongoing oversupply concerns, an unexpected build in US crude inventories, and a cut in Saudi official selling prices. Saudi Aramco will reportedly reduce the price of its Arab Light grade for Asian buyers to a 60-cent premium to the regional benchmark for January, the lowest since January 2021. Today, oil prices edged lower to $59.5/bbl as traders focused on developments in Ukraine ceasefire negotiations and awaited key US inflation data.

Natural Gas –

Nymex Henry Hub gas futures closed above $5/mmBtu, as colder mid-December weather projections helped offset the impact of a smaller-than-expected draw in US gas stocks.

Base metals –

Base metals traded mixed on Thursday, with aluminium and zinc firming while copper eased over 0.3% to settle near $11,450/ton. Despite the pullback, copper remains close to record highs as sharp withdrawals from LME Asian warehouses, the largest since 2013, reignited supply-squeeze speculation. The market continues to weigh tightening supply after Kamoa-Kakula and Glencore trimmed production guidance, even as Rio Tinto raised its 2025 outlook. Broader sentiment was supported by expectations of a Fed rate cut next week and softer U.S. labor data, including a 32K decline in ADP payrolls and rising layoffs, signalling a cooling economy. Meanwhile, attention remains on China ahead of key policy meetings, where authorities are expected to maintain a manufacturing-led growth approach. With supply risks in focus and key U.S. inflation data due later today, volatility may persist, keeping copper and broader base metals biased to the upside.

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