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Gold prices extended their rally to Tuesday, trading close to an all-time high amid rising hopes that the Federal Reserve would cut interest rates by the end of the year, while oil prices ticked lower on lingering demand concerns.
Spot gold (XAUUSD:CUR) rose +0.60% to $2,437.16 an ounce by 5:09 am ET, silver (XAGUSD:CUR) was trading +0.58% higher at $30.79.
Gold futures rose Monday to their second-highest closing levels ever amid political uncertainty in the U.S., amplified following the assassination attempt made on former President Trump over the weekend.
Meanwhile, in his last scheduled remarks before the customary quiet period begins on Saturday ahead of the Fed’s July meeting, Powell reiterated that inflation and economic activity had slowed broadly in line with the central bank’s expectation, but he declined to say whether that would justify reducing rates at the FOMC meeting on July 30-31.
Lower interest rates tend to reduce the opportunity cost of holding the precious metals.
Investors now await U.S. retail sales data due at 1230 GMT on Tuesday and comments from Fed governors Christopher Waller and Adriana Kugler later this week for further direction.
On the physical gold front, India’s four-week platinum imports from mid-June eclipsed 2023’s total as bullion dealers exploited a loophole by registering alloys containing around 90% gold as platinum to avoid higher duties, government and industry officials told Reuters.
Some gold mining stocks include Harmony Gold (HMY), Iamgold (IAG), Coeur Mining (CDE), Eldorado Gold (EGO), Pan-American Silver (PAAS), Agnico Eagle Mines (AEM), Barrick Gold (GOLD), Alamos Gold (AGI) Newmont (NEM), and Gold Fields (GFI).
Turning to energy, oil prices were trading in the red, pressured by Chinese oil demand outlook. The world’s second-largest economy grew 4.7% in April-June, official data showed, its slowest since the first quarter of 2023 and missing a 5.1% forecast in a Reuters poll.
The price action in oil yesterday was choppy. U.S. dollar movements, Chinese demand concerns, and expectations of a tighter global oil balance through the third quarter of the year all contributed to this choppy session, ING analysts said.
The LNG market also continues to face some supply disruptions. The Freeport LNG export facility in the U.S. has still not returned to normal operations following Hurricane Beryl. However, the plant is expected to go through a phased restart from this week, the brokerage added.
Recent Commodity Price Movements and A look At Some ETFs
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Energy
- Crude oil (CL1:COM) -0.68% to $81.35.
- Natural Gas (NG1:COM) +0.70% to $2.17.
Metals
Agriculture
- Corn (C_1:COM) -2.55% to $393.93.
- Wheat (W_1:COM) +1.04% to $536.77.
- Soybeans (S_1:COM) +0.65% to $1,082.26.
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)
#### Gold Prices and Interest Rates
Gold prices have been on the rise, nearing all-time highs, as investors anticipate a potential cut in interest rates by the Federal Reserve. A decline in interest rates typically reduces the opportunity cost of holding precious metals like gold, making them more attractive to investors.
#### Oil Prices and Chinese Demand
On the other hand, oil prices have been under pressure due to concerns about Chinese oil demand outlook. The recent data showing slower economic growth in China has contributed to the choppy trading in oil markets. This, along with other factors like U.S. dollar movements and expectations of a tighter global oil balance, has kept oil prices in the red.
#### ETF Options for Commodities
Investors looking to gain exposure to different commodities can consider various ETF options. For gold, ETFs like SPDR Gold Shares (GLD) offer a way to invest in the precious metal. Similarly, for oil and other metals, there are ETFs like U.S. Oil Fund (USO) and iShares Silver Trust (SLV) available in the market. These ETFs provide a diversified and convenient way to invest in commodities without directly trading futures contracts.
