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Gold prices (XAUUSD:CUR) were set for a weekly fall on Friday as global stock markets regained ground from Monday’s heavy sell-off, with investors once again recalibrating their expectations around the Federal Reserve’s long-awaited interest rate cuts.
Spot gold (XAUUSD:CUR) was on course for a nearly 1% weekly fall after a drop in U.S. unemployment claims on Thursday helped soothe fears over an imminent economic slowdown. Despite bullion’s haven status, the precious metal was caught up in Monday’s plunge across broader markets.
Gold’s focus continues to be on the scope and timing of the Fed’s likely move to cut rates, ING analysts said. The brokerage expects gold to average $2,380 in the third quarter and prices peaking in the fourth quarter at $2,450/oz, resulting in an annual average of $2,301/oz.
Geopolitical tensions in the Middle East and elsewhere have also added to the yellow metal’s appeal.
Oil prices meanwhile were on course for more than 3% weekly gain amid growing Middle East supply fears. Additionally, recent U.S. jobs data also calmed demand concerns.
Israel remains on edge as it prepares for a retaliatory attack from Iran following the assassination of Hamas and Hezbollah leaders. However, a call between Iran’s President Masoud Pezeshkian and French counterpart Emmanual Macron potentiallyopened a diplomatic path to de-escalation. There is also no end in sight to the political situation that has closed Libya’s Sharara oil field, ANZ analysts said.
However, one bright spot in the oil market is jet fuel demand in China. Total air traffic grew by 14% in June compared with the same period 2019, ANZ said, citing government data which showed domestic flights are up nearly 10%.
Both Brent and WTI were set to gain more than 3% on a weekly basis as a “risk-on tone across broader financial markets helped push commodity markets higher.”
Elsewhere, U.S.-based agribusiness trading giant and exporter Cargill is reportedly streamlining its operations to three units from five in a bid to focus on its core expertise as the company missed its profit goals.
The move comes as trading profits have been squeezed, in part by ample world crop supplies and a waning amount of cattle in the U.S. that has pressured beef processors, Bloomberg reported. Cargill rivals Archer-Daniels-Midland (ADM) and Bunge Global (BG) — which make up the so-called ABCDs of global agriculture commodity trading alongside Louis Dreyfus Co. — recently reported shrinking profits.
Recent Commodity Price Movements and A look At Some ETFs
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Agriculture
Commodity ETFs
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