Most major commodities were in the red on Thursday, with oil extending its 2% decline from the previous session.
Gold and silver prices also fell after a sharp rally over the last few trading sessions.
Among industrial metals, copper also extended its losses from Wednesday as the red metal struggled to break out.
Oil prices extend losses
On Thursday, oil prices continued their downward trend, following a more than 2% drop in the previous session.
This decline occurred as investors anticipated the upcoming OPEC+ meeting, where producers are expected to discuss a further increase in output targets.
The Organization of the Petroleum Exporting Countries and allies’ eight oil-producing nations plan to discuss potential production increases for October at a meeting this Sunday.
The group aims to regain market share by producing more oil.
According to PVM analyst Tamas Varga, an OPEC+ production increase would strongly indicate that reclaiming market share is prioritized over supporting prices.
OPEC+ previously committed to increasing output targets by approximately 2.2 million barrels per day between April and September. This was in addition to a 300,000 bpd quota increase specifically allocated to the United Arab Emirates.
Middle Eastern oil prices have been the strongest globally in recent months, even with accelerated production increases.
This trend, as per a Haitong Securities report, has strengthened the resolve of Saudi Arabia and other OPEC members to raise output.
US macroeconomic data also weighed on prices, with July’s job openings hitting a 10-month low. This signals an easing labor market, which supports expectations of a Federal Reserve interest rate cut this month.
Additionally, US crude stockpile data, typically released on Wednesdays, is anticipated on Thursday this week due to Monday’s US holiday.
Markets are keenly awaiting this government report to assess demand strength from the world’s largest oil consumer.
Gold prices retreat
Gold prices fell on Thursday but remained near $3,600 per ounce.
Gold prices experienced a dip due to some profit-taking after reaching record highs, as the dollar stabilised.
Investors are currently awaiting further indicators on the US labor market and potential interest rate cuts, which are expected in the coming days.
Gold finally broke above the $3,450 resistance level at the beginning of this week, a barrier it had faced since early May. Monday’s breakthrough continued the upward trend that started in late August.
“Prices have risen steadily ever since, lifting the daily MACD off neutral levels, although it is still far from being overbought,” said David Morrison, senior market analyst at Trade Nation.
Despite this, gold may have to pull back from recent highs before it can resume its strong rally.
Gold demand increased due to uncertainty surrounding US trade tariffs after an appeals court deemed most of President Donald Trump’s tariffs illegal.
Trump announced his intention to appeal the decision to the Supreme Court, stating that any ruling against his tariffs would negatively impact recent trade agreements.
Concerns about the Federal Reserve’s independence persisted amidst a legal dispute over Trump’s efforts to dismiss Fed Governor Lisa Cook.
However, these concerns were somewhat alleviated when Stephen Miran, Trump’s nominee for Fed Governor, pledged to uphold the central bank’s political independence.
Silver, copper slide
Silver experienced a notable pullback overnight, retracting below the $41 mark after reaching a fresh fourteen-year high on Wednesday.
This recent movement signals a temporary halt in its otherwise robust rally that has captivated market attention.
Despite this brief slip, the precious metal continues its upward trajectory, steadily narrowing the gap towards its all-time peak, which stands just shy of $50 per ounce, achieved in April 2011.
Benchmark copper futures on the London Metal Exchange dropped 1% to $9,887.05 per ton, pulling back from a nearly six-month high reached earlier this week.
Meanwhile, COMEX copper futures also saw a decline, falling 1.1% to $4.5685 per pound.
This week, copper prices surged on the back of growing speculation that China, the world’s largest importer, would introduce further stimulus measures to boost its domestic economic growth.
Such a move is anticipated to increase the country’s demand for copper.
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