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Gold prices (XAUUSD:CUR) ticked higher at the start of the week after dropping in the previous session, helped by a softer U.S. dollar, as investors geared up for key inflation data this week, while oil prices, too, traded in the green.
Palladium futures (XPDUSD:CUR) extended their gains after rising as much as 11% on Friday. Palladium, mainly used in the autocatalysts curbing harmful emissions, remains supported by tight supplies. ETFs: (PALL), (PPLT), (SPPP)
J.P. Morgan in its latest note said it remains structurally bullish on gold and silver and perceives the recent consolidation as a buying opportunity with a target of $2,600/oz and $34/oz, respectively, in 2025. The current levels in copper, too, present a good re-entry point towards the brokerage’s $11,500 target by 3Q25, it added.
“The recent pullback in commodities is just that—a pullback—and we continue to see a 10% appreciation in the broader BCOM Commodities index by year-end,” JPM further said.
Furthermore, after rallying ~12%, U.S. Henry Hub natural gas moves from JPM’s #1 buy recommendation in April to the bottom of the list for now. “Another rally in price to our unchanged $4 target for the Dec’24 contract will likely manifest by September, making the timing of entry key for this commodity,” the investment bank noted, as it updated the 2025 natural gas price forecast to $4.30/MMBtu.
Oil prices were trading higher on the day, supported by expected summer demand and persistent geopolitical tensions.
“The chief underlying reason behind the price strength … is the growing confidence that global oil inventories will inevitably plunge during the summer in the Northern Hemisphere,” Tamas Varga of oil broker PVM told Reuters, referring to seasonal demand for oil products.
Prices were also supported by the latest round of Ukrainian drone attacks on Russian refineries. Meanwhile, EU countries on Monday agreed a new package of sanctions against Russia over its war in Ukraine, including a ban on reloading Russian liquefied natural gas in the EU for further shipment to third countries.
In terms of economic data, the U.S. personal consumption expenditures price index on Friday, will be closely watched by markets.
Recent Commodity Price Movements and A look At Some ETFs
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Energy
- Crude oil (CL1:COM) +0.52% to $81.01.
- Natural Gas (NG1:COM) -0.28% to $2.71.
Metals
Agriculture
- Corn (C_1:COM) +0.07% to $435.32.
- Wheat (W_1:COM) -2.53% to $561.18.
- Soybeans (S_1:COM) +0.64% to $1,167.83.
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: Gold and Silver Forecast
J.P. Morgan’s bullish stance on gold and silver presents an optimistic outlook for these precious metals, highlighting potential buying opportunities in the midst of recent consolidations. With price targets of $2,600/oz for gold and $34/oz for silver by 2025, investors may find these projections encouraging for long-term investment strategies.
### Natural Gas Price Forecast Update
The shift in J.P. Morgan’s recommendations for U.S. Henry Hub natural gas underscores the dynamic nature of commodity markets. With a revised target of $4.30/MMBtu for 2025, the timing of entry into natural gas investments becomes crucial, emphasizing the importance of strategic decision-making in commodity trading.
### Geopolitical Factors Influencing Oil Prices
Ongoing geopolitical tensions, such as Ukrainian drone attacks on Russian refineries and EU sanctions against Russia, continue to impact oil prices. These external factors add layers of complexity to the energy market, reinforcing the significance of staying informed about global events when analyzing commodity price movements.
