Commodity Research Evening Track by Kotak Securities
Gold prices rebound in thin holiday trade
Comex Gold futures (Dec) rebounded on Thursday, surpassing the $2,645 per ounce extending its positive move for the third session, initiated after Monday's significant decline. As US markets were closed for a holiday, trading volumes were reduced. Investors are closely monitoring economic data for clues about the Federal Reserve's future monetary policy decisions, which could impact gold's price trajectory. While the market currently anticipates a 25 basis point rate cut in December, expectations for 2025 have shifted towards a more moderate 50 basis point reduction.
WTI Crude Oil traded above $69 per barrel on Thursday, following a three-day decline amid the EIA reported a 1.8 million-barrel decline in US crude inventories last week, reversing a three-week upward trend. Now market participants are closely watching the OPEC+ meeting, scheduled for December 5th where the group is likely to discuss postponing a planned production increase due to concerns over potential oversupply in 2024. Recent OPEC+ discussions suggest a leaning towards delaying output hikes. Trading volumes were subdued ahead of the US Thanksgiving holiday. Oil prices are down over 3.5% attributed to the ceasefire between Israel and Lebanon's Hezbollah, which alleviated concerns about potential disruptions to Middle Eastern oil supplies.
LME base metals prices declined today, on concern that, Chinese industrial companies reported a third consecutive month of lower profits in October. Moreover, Chinese domestic consumption remains subdued due to deflationary concerns and the ongoing real estate crisis. Additionally, the recent US election has added further uncertainty to the outlook, with the incoming president threatening to impose additional tariffs on Chinese goods. 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 is trading mostly sideways to lower by 0.50% as traders shifted their attention to the upcoming year's supply and demand dynamics. January contracts initially saw a 1% increase before declining. With Russia's gas transit deal with Ukraine set to expire in a month, Europe faces the risk of reduced gas supplies during the anticipated colder winter. This, coupled with accelerated withdrawals from storage facilities, could complicate next year's stockpiling efforts.
Above views are of the author and not of the website kindly read disclaimer
