Adhitya Nur
Gold ticked up on Friday, set for a second-straight weekly gain, as a less-than-expected rise in U.S. consumer prices bolstered rate cut bets, while nickel futures rallied to an eight-month high as unrest in New Caledonia fuelled supply fears.
The consumer price index data “could be an early indication that over time inflation will cool, and the Fed will make its first interest rate cut,” Phillip Streible, chief market strategist at Blue Line Futures told Reuters.
Spot gold (XAUUSD:CUR) was up +0.20% to $2,382.66 an ounce by 6 am ET, set for 0.7% weekly rise.
Meanwhile, U.S. natural gas prices climbed as domestic storage rose by slightly less than expected, with a build of 70B cf for the week ended March 10. U.S. futures (NG1:COM) were on course for a fourth-consecutive week of gains.
The natgas rally also is fuelled by “stout flows of 1.9B cf the past week at Freeport LNG, much lighter Y/Y production, bouts of early season heat over Texas,” and expectations of a steady decrease in still high inventory surpluses, NatGasWeather.com says.
Among base metals, copper futures (HG1:COM) gained over 1%, on its way to a second-weekly gain, driven by hopes of recovery in the Chinese economy as policymakers ramped up support.
“Copper’s rally continued unabated despite a short squeeze on the Comex easing… Broader sentiment remained supported by the prospect of rate cuts in the U.S. following data released earlier this week that showed a fall in US inflation,” ANZ Research said.
Nickel, used in the production of electric batteries, (LN1:COM) meanwhile remained well bid “as traders contemplate supply disruptions in New Caledonia. Mining operations in the world’s third-largest nickel producer were suspended,” the brokerage added.
Nickel prices in London surged more than 6% on Friday to their highest levels in eight months, boosted by funds inflow, supply disruption concerns in New Caledonia, and China’s latest rollout of support measures, Reuters reported.
New Caledonia, a French-ruled Pacific island, accounted for 6% of global mine nickel output last year, according to data by the International Nickel Study Group.
Related nickel stocks: VALE (VALE), BHP (BHP), Homeland Nickel (SHL:CA) (OTCPK:SRCGF), Anglo-American (OTCQX:AAUKF), Glencore (OTCPK:GLCNF).
Insight into Commodity Price Movements and Investments
Gold and nickel are showing strength in the market due to different factors affecting their respective industries. Gold is benefiting from rate cut expectations based on lower-than-expected inflation rates in the U.S., while nickel is experiencing a surge in prices due to supply concerns in New Caledonia.
Impact of Supply Disruptions on Nickel Prices
The suspension of mining operations in New Caledonia, a significant nickel producer, has led to increased fears of supply shortages, driving nickel prices to an eight-month high. This disruption, coupled with China’s support measures and inflow of funds, has created a bullish trend for nickel futures.
Diversifying Investments in Commodity ETFs
Investors looking to capitalize on the current trends in gold and nickel markets may consider diversifying their portfolios with commodity ETFs. ETFs such as SPDR Gold Shares, VanEck Gold Miners, and iShares Gold Trust offer exposure to the gold market, while ETFs like iShares Silver Trust and U.S. Copper Index Fund provide opportunities in the metal sector.
