Commodity Roundup: Precious metals in green; Brent set to snap four weeks of decline

Precious metal prices were trading in positive territory on Friday, although in low volume due to Thanksgiving holiday, with expectations that the Federal Reserve is done raising interest rates, helping non-yielding bullion post a second consecutive weekly gain. Concerns over price pressures however linger, with data showing US consumers expect inflation to persist. Spot gold (XAUUSD:CUR) was up +0.20% to $1,995.70 an ounce by 6 am ET, an up 0.7% for the week.

The Fed has been on hold since its meeting in July. The market is now hoping for interest-rate cuts, with 90 bps priced by the end of next year.

Saxo Bank’s Ole Hansen in a recent note said, “Both metals (gold and silver) have thrived during the past month on rising speculation the Federal Reserve has reached the end of the road of its aggressive rate hike regime, and that next year could see a reversal.” “The past six years have seen strong December performances from gold and silver.”

Meanwhile in the energy market, U.S. crude oil prices and natural gas futures were trading lower, while Brent was up slightly. Brent crude was also set for a weekly gain after four consecutive declines as markets hoped for extended supply cuts, while waiting for the Organization of Petroleum Exporting Countries’ meeting next week.

Elsewhere in the base metals space, China’s efforts to ease the property crisis bolstered market sentiment. Copper prices in London were steady on Friday, heading for a second consecutive weekly gain. Demand outlook for copper, used in power, housing and infrastructure sectors, was brightened by a raft of measures top consumer China issued to revive its economy. The country may allow banks to offer unsecured short-term loans to qualified property developers for the first time, Bloomberg News reported on Thursday.

Reuters reported that a major Panama copper mine run by Canada’s First Quantum Minerals (FM:CA) is not operating at commercial levels, a spokesman said on Thursday, following blockades by protesters at a key port that prevented the miner from receiving shipments of coal that power the site and other supplies.

In the agriculture commodities complex, soybean, wheat and cocoa all traded in red. Sugar production in the European Union is projected to grow 3% in the 2023/24 season with a strong crop in the bloc’s East more than offsetting a drop in France, the United States Agriculture Department said in a report on Tuesday.