Oil prices eased on Thursday as investors assessed a potential trade deal between the US and China.
Gold prices were flat after having spent most of the trading day in the green due to the Federal Reserve’s hawkish tone.
Silver prices were higher as the metal fell sharply in the previous session, presenting investors with lower-level buying.
Base metals traded soft due to a relatively hawkish US Fed, which put doubts over a December rate cut.
Oil eases
Oil prices fell on Thursday following a meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea.
At the meeting, President Trump lowered tariffs on China, leading investors to anticipate a potential trade truce between the two nations.
In a one-year agreement, Trump committed to lowering tariffs on China from 57% to 47%. In return, Beijing agreed to resume purchasing US soybeans, maintain rare earths exports, and intensify efforts against the illicit fentanyl trade.
“Traders appear to be brushing off news of a trade deal between the US and China, and who can blame them?,” said David Morrison, senior market analyst at Trade Nation.
There’s no doubt that President Trump has spent this week overselling the agreement between the US and China, given that the deal will only last for a year, and the Trump administration has only agreed to drop tariffs by 10% to 47%.
The US Fed reduced interest rates on Wednesday, as anticipated by the market.
This move further supported the economic outlook. However, the Fed indicated this might be the final cut of the year, citing concerns about data availability due to the ongoing government shutdown.
Traders are currently anticipating Sunday’s OPEC+ meeting. The group is expected to reveal a further production increase, as it systematically reverses earlier output reductions.
At the time of writing, the West Texas Intermediate crude was at $59.89 per barrel, down 1%, while Brent was also 1% lower at $63.72 a barrel.
Gold falls
Gold was largely unchanged on Thursday as the Fed’s hawkish tone at Wednesday’s meeting dampened hopes of a further interest rate cut in December.
As anticipated, the Fed reduced its benchmark rate by a quarter point, setting it between 3.75% and 4.00%.
This decision initially weakened the dollar and strengthened non-yielding bullion. However, gains were limited after Fed Chair Jerome Powell indicated that a further cut in December was “far from a foregone conclusion.”
Gold’s upward movement was restricted by Powell’s cautious stance, which dampened traders’ hopes for a more prolonged easing cycle.
Meanwhile, key contentious issues like semiconductors and agricultural exports lacked concrete agreement details, leaving markets awaiting specifics before acknowledging any lasting progress in the US-China deal.
At the time of writing, the COMEX gold contract was at $4,005.62 per ounce, largely flat.
“Should gold continue to consolidate, and if it can break and then hold above $4,000 over the next week or so, then that could set the stage for another rally,” Morrison said.
But should prices turn lower, then this should increase the probability of a deeper correction.
Among other precious metals, silver prices on COMEX were at $48.140 per ounce, up 0.5% from the previous close.
Silver prices have stabilised over the past two sessions, rebounding from a short-term oversold position, mirroring the trend seen in gold.
“Again, the bulls will be hoping that silver can make back some of its recent losses. But prices may have to consolidate further if they are to form a solid base from which silver can rally,” Morrison added.
Base metals
All base metal prices were in the red on Thursday, with copper falling below $11,000 per ton.
At the time of writing, the three-month copper contract on the London Metal Exchange was at $10,948.85 per ton, down 1.9% from the previous close.
Additionally, aluminium, zinc, and nickel were all down as the hawkish tone of the Fed on Wednesday weighed on sentiments.
The likelihood of another 25-basis-point cut in December has decreased to approximately 60% from over 90%. This shift comes after Jerome Powell cautioned that a rate reduction is “not a foregone conclusion.”
Southern Copper Corporation’s Tía María copper mine project, situated in the Arequipa region of southern Peru, has achieved a 23% construction completion rate.
The project, with an estimated investment of $1.4 billion, is designed to produce 120,000 metric tons of copper annually.
Construction is on schedule, and the company anticipates production will begin in 2027.
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