mevans
Gold prices (XAUUSD:CUR) eased on Wednesday pressured by a stronger dollar, while investors remained caution ahead of the release of minutes from the U.S. Federal Reserve’s December meeting, due at 1900 GMT, as well as a slew of important U.S. data this week that should clarify the rate outlook. Spot gold (XAUUSD:CUR) was down -0.21% to $2,054.52 an ounce by 6 am ET.
Fed officials in December predicted 75 basis points of rate cuts in 2024. However, optimism about early and aggressive U.S. interest rate cuts ebbed ahead of the release of FOMC minutes and jobs data.
Futures markets still see a 70% chance of the Fed starting to lower U.S. borrowing costs from their current 22-year high from March. But Reuters analysis of Fed policymakers’ recent comments shows that, while many of them have noted improvements on inflation and some easing of wage pressures, most have not said monetary easing is urgent. Lower rates reduce the opportunity cost of holding non-interest-bearing bullion.
Oil prices too, remained under pressure after sharp moves earlier in the week, weighed down by a firmer dollar, while markets also watched developments in Middle East tensions. On the data front, the ISM’s manufacturing survey, due later on Wednesday, was set to show whether the central bank has new recession signals to worry about.
UBS in its first outlook for the year said, it expects higher spot prices in crude oil, but U.S. natural gas investors probably have to wait until 2025 to see positive total returns again.
The Bank expects the price of Brent to recover to a $80–90/bbl range and WTI into a $75–85/bbl range, while it sees US natural gas trading most of the year below $3.00/MMBtu.
Data from the American Petroleum Institute industry group is due at 4:30 p.m. (2130 GMT) on Wednesday, and data from the Energy Information Administration, is due at 11:00 a.m. (1600 GMT) on Thursday, delayed by a day due to the New Year’s holiday on Monday.
Among base metals, copper prices too traded in red, as signs of soft demand in top consumer China dampened investor sentiment, while low inventories lent some support to the metal.
Elsewhere among agriculture commodities, soybeans, cocoa and wheat also shed.
Recent Commodity Price Movements
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Energy
Metals
Agriculture
- Corn (C_1:COM) -0.07% to $463.42.
- Wheat (W_1:COM) -0.26% to $605.19.
- Soybeans (S_1:COM) -0.43% to $1,268.50.
Commodity ETFs
Gold ETFs:
- SPDR Gold Shares ETF (GLD)
- VanEck Gold Miners ETF (GDX)
- VanEck Junior Gold Miners ETF (GDXJ)
- iShares Gold Trust ETF (IAU)
- Direxion Daily Gold Miners Index Bull 2X Shares ETF (NUGT)
- Sprott Physical Gold Trust (PHYS)
Other Metal ETFs:
- iShares Silver Trust ETF (SLV)
- Sprott Physical Silver Trust (PSLV)
- Global X Silver Miners ETF (SIL)
- U.S. Copper Index Fund, LP ETF (CPER)
- abrdn Physical Palladium Shares ETF (PALL)
Oil ETFs:
- U.S. Oil Fund, LP ETF (USO)
- Invesco DB Oil Fund ETF (DBO)
- U.S. 12 Month Oil Fund, LP ETF (USL)
- U.S. Brent Oil Fund, LP ETF (BNO)
- U.S. Natural Gas Fund, LP ETF (UNG)
- U.S. Gasoline Fund, LP ETF (UGA)
Agriculture ETFs:
- Invesco DB Agriculture Fund ETF (DBA)
- Teucrium Soybean ETF (SOYB)
- Teucrium Wheat ETF (WEAT)
- Teucrium Corn Fund ETF (CORN)
