Commodity Roundup: Gold shines for third-straight week; upbeat China data help base metals

Precious metal prices were trading in green on the first day of the month on Friday, with spot gold (XAUUSD:CUR) on track for its third consecutive weekly gain amid hopes of interest rate cut by the first half of next year by the U.S. central bank, which boosted the outlook for zero-yield bullion. Spot gold (XAUUSD:CUR) was up +0.40% to $2,043.87 an ounce by 6 am ET.

However, according to David Meger, director of metals trading at High Ridge Futures, “there could be some pullback in gold next week, but in general, we believe this trend of sideways to higher momentum will continue in the near future.”

Lower interest rates reduce the opportunity cost of holding non-interest-bearing bullion. In the physical market, top consumer China’s net gold imports via Hong Kong fell for a second consecutive month in October as a patchy economic recovery weighed on demand in the key bullion market, Reuters reported.

Meanwhile in the energy market, oil prices were trading higher, while natgas futures fell.

“More importantly, we don’t see the need to cut (production) if the alliance were to accept oil prices in the high $70s-to high $80s range.”

UBS on the other hand said, market participants will closely watch compliance levels, but those additional cuts should prevent an oversupplied market in 1Q24, in its view. “We continue to believe that the undersupplied oil market should see prices rising over the coming months.”

In the base metals market, copper prices advanced on Friday, set for a third-straight weekly gain supported by a softer dollar and data showing factory activity surprisingly expanded in November in top consumer China. The Caixin China General Manufacturing PMI rose to 50.7 in November from 49.5 in October, beating market forecasts of 49.8 and pointing to the highest reading since August. Among other metals, LME aluminium rose 0.4% to $2,201 a ton, zinc advanced 0.3% to $2,483, lead increased 0.3% to $2,129, tin gained 1% to $23,480.

Elsewhere among agriculture commodities, wheat and soybeans move lower, while cocoa ticked up.