Nymex crude oil declined by over 5% as global demand concerns weighed on prices - Axis Securities Ltd
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The Week That Was
* Spot gold continued its record-breaking run for the third consecutive week – its longest such run since April - advancing roughly 1.4% on a series of favorable tailwinds. The Federal Reserve’s rate cut, coupled with escalating geopolitical tensions and fresh stimulus initiatives from China, have bolstered demand for the yellow metal. The market is currently pricing in a 56.7% probability of an additional 50-basis-point rate cut in November, with a 43.3% chance of a 25-basis-point cut, as indicated by the CME FedWatch Tool. This dovish outlook across central banks worldwide continues to underpin gold's strong performance.
* Spot silver also marked its third consecutive week of gains, rising by 1.3% and closing above $31.5—its highest level in over a decade. The white metal has rallied in tandem with gold, buoyed by expectations of additional rate cuts from the Federal Reserve and other major central banks by year-end. Furthermore, this week, silver continued to benefit from China's aggressive fiscal and monetary stimulus measures to support economic growth.
* Nymex crude oil declined by over 5% as global demand concerns weighed on prices. Additionally, the market reacted negatively to reports that Saudi Arabia is moving forward with plans to begin unwinding production cuts in December. Although prices saw a brief rebound following China's stimulus announcement, concerns about slowing demand from the world's two largest economies—China and the U.S.—remain a significant headwind. Tactically, any escalation in Middle East tensions could provide short-term support to crude prices.
* Comex Copper posted its most robust weekly performance since July, gaining nearly 6%. The rally was fueled by China's latest stimulus measures, which provided a boost to industrial metals. The People's Bank of China cut the reserve requirement ratio by 50 basis points, its second reduction this year, freeing up 1 trillion yuan for lending. Additionally, the central bank lowered its one-year medium-term lending facility rate, alongside key short-term rates, to encourage borrowing and liquidity.
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