Weekly Commodity Insights By Axis Securities Ltd
The Week That Was
* COMEX Gold prices rose 2.3% on the week, supported by substantial central bank purchases, ongoing geopolitical tensions and inflation concerns. Upcoming inflation data are expected to influence the US Fed’s policies, which will impact gold prices. Investors will also closely monitor President-elect Donald Trump's proposed economic policies as he takes oath on 20th January, which will influence gold's trajectory in the near term. For now, the macros are positive for the metal.
* Silver rallied 4.2% for the week and has recently traded between $29 and $32 per ounce. U.S. fiscal and monetary policy are expected to continue supporting the metal in the near-term, but traders are closely looking for cues from the US rates market, where the odds of a rate cut from the Fed continue to remain in freefall.
* YMEX crude prices jumped 3.5% after surging 4.8% in the previous week. The increase has been fuelled by OPEC+ production cuts, reduced Russian output, and seasonal demand due to a greater-than-average cold weather conditions in the US and Europe. Additionally, there are concerns that recent US sanctions on Russian oil producers are expected will tighten supply further, impacting global markets.
* COMEX Copper futures rose above $4.3/lb, gaining over 6% for the week - the best performance since May. Prices surged due to optimism about China’s fiscal stimulus and strong demand for EVs and renewable energy. However, trade tensions and potential US tariffs under President Trump tempered investor enthusiasm.
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