IGI Logo

Comex Gold future surged on Monday and continued their rally on Tuesday to trade over $2,636 an ounce, driven by a weakening dollar and uncertainty about the Federal Reserve's interest rate path. The recent decline in the dollar, fueled by the waning "Trump trade," has benefited gold. Despite a recent dip, Goldman Sachs maintains its bullish outlook for gold, predicting a price of $3,000 per ounce by the end of 2025. Central bank buying and trade tensions are seen as key factors driving the upward trend in gold prices.

WTI Crude Oil fell to $68.6 per barrel on Tuesday, retreating from a recent surge caused by production halts at Norway's Sverdrup oilfield. While supply disruptions at Sverdrup and Kazakhstan's Tengiz field remained a concern, escalating geopolitical tensions between Russia and Ukraine added to market uncertainty. However, the broader market outlook was dampened by worries over sluggish Chinese demand and abundant global supply. The International Energy Agency forecasts a potential oil surplus of over 1 million barrels per day in 2024, which could worsen if OPEC+ increases production.

LME Aluminum prices surged by about 1% to trade near $2,630 per ton on concerns about potential supply shortages following China's removal of export tax rebates. This move aimed to address overcapacity issues and reduce trade tensions. A weaker US dollar further boosted demand for dollar-denominated commodities like aluminum. However, LME Copper and Lead trading lower by 0.30% and 0.50% respectively on persistent demand concerns in China and investors were disappointed by Beijing’s latest support measures aimed at stabilizing the economy.

European natural gas gained as much as 1.1% and surged for the fourth straight day, with benchmark futures nearing a one-year high. This rise was triggered by Ukraine's first long-range missile strike on Russian territory. While Russia is still expected to supply its usual gas volumes to Europe via Ukraine, traders remain cautious about potential disruptions due to the ongoing conflict. The expiration of the gas transit deal between Russia and Ukraine next year poses a significant risk, especially for central European countries reliant on this route. US economic calendar for today includes housing data, with building permits and housing starts in focus.

Above views are of the author and not of the website kindly read disclaimer