Gold prices (XAUUSD:CUR) rose on Monday after a weekly fall, as investors refocused on geopolitical tensions in the Middle East, while oil prices held strong, extending gains for a fifth straight session.
Investors also shifted their focus to upcoming U.S. inflation data this week amid expectations of a Fed rate cut in September, however the market remains divided on the extent of the rate cut on the back of positive U.S. jobs data.
Gold (XAUUSD:CUR) has also been benefitting as a safe-haven metal as investors hedge against the possibility of wider conflict in the Middle East. On the data front, U.S. producer inflation data will be released on Tuesday, followed by consumer inflation figures on Wednesday. Spot Silver (XAGUSD:CUR), often viewed as an affordable alternative to gold for investors, too ticked higher, rising +1.4% to $27.85 an ounce by 5:37 am ET.
Israeli Defence Minister Yoav Gallant told U.S. Defense Secretary Lloyd Austin on Sunday that Iran was making preparations for a large-scale military attack on Israel, Axios reporter Barak Ravid said in a post on X, citing a source with knowledge of the call.
Saxo Bank’s Ole Hansen on Friday said that, supply risks remain a concern for the oil market, particularly with the halt in production from Libya’s biggest field, geopolitical tensions surrounding Ukraine’s cross-border attack on Russia, and Iran’s promise to retaliate against Israel for a recent assassination in Tehran.
“Despite these threats, the market has so far seen a limited reaction, with reports suggesting that Iran wants to avoid a region-wide war that could disrupt oil and gas flows from the Middle East.”
Elsewhere, BMI (a unit of Fitch Solutions) raised its price forecast for ICE-listed second-month arabica coffee futures contracts in 2024 from USc186 per lb to USc210 per lb.
“The view …that the start of the Brazilian coffee harvest would ease price pressures in the coffee market, has not come to fruition, with weather concerns in Brazil and Southeast Asia instead underpinning continued bullish sentiment, with constraints in Vietnam seeing ICE-listed second-month robusta coffee futures contracts closing the August 02 trading session up 44.8% on a YTD basis, equivalent to a 61.5% increase on their price level of twelve months earlier,” the brokerage said.
BMI further states, in the near term, market sentiment and warehouse data provide two indicators that bullish price development has further headroom.
Looking ahead, the brokerage forecasts that the international coffee sector will generate a surplus of 5.8mn bags in 2024/25, a slight increase compared to that presented in Q2 2024 forecast, with reduced production in Vietnam offset due to lower global consumption considering high prices.
Recent Commodity Price Movements and A look At Some ETFs
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