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Gold prices (XAUUSD:CUR) were poised for a weekly gain after experiencing two consecutive losses. This gain was driven by speculation surrounding an early rate cut by the U.S. central bank. Meanwhile, U.S. natural gas futures (NG1:COM) received a boost from a storage build that was smaller than expected.
Spot gold (XAUUSD:CUR) saw an increase of over 1% on Friday, setting it up for a 2.3% weekly rise. The rise in gold prices can be attributed to higher-than-estimated U.S. jobless claims, which strengthened expectations of policy easing. Traders are currently pricing in about a 67% chance of a rate cut by the U.S. Fed in September, according to the CME’s FedWatch Tool. The anticipation of lower interest rates reduces the opportunity cost of holding precious metals, making them more attractive as an investment.
“What we’re seeing is continued impact from the expectations for Fed rate cuts, or when those rate cuts may occur,” said David Meger, director of alternative investments and trading at High Ridge Futures told Reuters.
In the energy market, oil prices were on track for a weekly gain due to stalled cease-fire talks between Israel and Hamas, while natural gas prices were headed for a third consecutive weekly rise, supported by signs of robust demand and a decline in production.
U.S. natural gas futures (NG1:COM) surged past $2.3/MMBtu, reaching their highest level in nearly four months.
According to RBC Capital Markets strategists, the latest bullish storage data for natural gas reveals a 79 billion cubic feet (Bcf) injection, which is below the consensus median expectation of 87 Bcf. This injection figure also falls under the five-year average of 81 Bcf, indicating a tightening supply-demand balance.
Copper futures (HG1:COM) inched up towards a weekly gain despite the U.S. dollar holding steady.
“A growing supply deficit is likely to worsen if prices don’t rise enough to incentivize new mines,” ANZ Research said in a note, highlighting that regulatory and geopolitical issues are impeding supply growth and extending project timelines.
Recent Commodity Price Movements and A Look at Some ETFs
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Energy
- Crude oil (CL1:COM) +0.72% to $79.83.
- Natural Gas (NG1:COM) +0.88% to $2.32.
Metals
Agriculture
- Corn (C_1:COM) -2.49% to $445.14.
- Wheat (W_1:COM) +2.44% to $653.08.
- Soybeans (S_1:COM) +0.17% to $1,195.61.
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)
Additional insight:
– The expected rate cut by the U.S. central bank is driving speculation and impacting gold prices positively.
– Regulatory and geopolitical issues are affecting supply growth in the copper market, hinting at potential price increases.
– Investors looking for exposure to commodities can explore a variety of ETFs to diversify their portfolios and capitalize on market trends.
