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Commodities rise on softer dollar as market awaits key US economic data

Comex Gold Dec futures climbed to nearly $2650 per ounce on Wednesday, driven by recent FOMC minutes wheare Fed officials expressed optimism about easing inflation and a robust labor market, they also indicated a cautious stance on future rate reductions, favoring a gradual approach. Investors are currently leaning towards a 25 basis point rate cut in December, a move that could potentially reduce the opportunity cost of holding gold.

WTI Crude Oil rose above $69 per barrel on Wednesday, as traders assessed signs of another OPEC+ output delay against easing geopolitical risks following the Israel-Hezbollah cease-fire. Markets are closely awaiting the OPEC+ meeting on December 1, with reports suggesting the group will delay January’s planned production increase by several months due to signs of a supply glut. Meanwhile, Middle East tensions eased after Israel and Hezbollah reached a 60-day cease-fire deal through US-mediated talks.

LME Zinc continue to trade higher for the second day to $3118 per ton following a significant increase in withdrawal orders from London Metal Exchange (LME) warehouses. Other base metals are also trading positive amid supply-side challenges, such as declining ore grades and escalating costs at major mines like Escondida, are adding further pressure on the market. LME Copper and lead trading 0.6% higher while Aluminium and Nickel are trading moderately lower China's industrial sector posted weakening profits for the third month in October.

European natural gas declined for the second consecutive day on Wednesday. This downward trend can be attributed to consistent gas supplies and relatively milder weather conditions. While benchmark futures experienced a 2.9% dip, they remain near their one-year high. Market volatility persists due to the upcoming expiration of the gas transit agreement between Ukraine and Russia at the end of 2024. Uncertainty surrounding a potential alternative agreement has contributed to price fluctuations.

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