Most commodities rose on Monday with gold prices on COMEX nearing the coveted $4,000 per ounce mark.
Oil prices also rose sharply as the Organization of the Petroleum Exporting Countries and allies agreed to only a modest increase in oil output for November.
Silver prices also rose, tracking gold’s rise, but copper was down after prices rose sharply last week.
Gold continues climb
Gold prices reached unprecedented levels this morning, surpassing $3,900 per ounce during the Asian Pacific opening.
While the rally paused just under $4,000, the mark is now a clear objective for buyers.
At the time of writing, the December gold contract on COMEX was at $3,960.40 per ounce, up 1.3% from the previous close.
The contract had hit a record high of $3,973.60 per ounce earlier in the day.
“As stated previously, markets can stay overbought, or oversold, for much longer than most reasonable observers would expect. But traders should take care at current levels,” said David Morrison, senior market analyst at Trade Nation.
Buyers should be wary of potential downside risks. But those looking to profit from a sharp sell-off should also take care.
Meanwhile, a senior White House official indicated on Sunday that mass layoffs of federal workers in Washington would commence if US President Donald Trump concludes that negotiations with congressional Democrats to resolve a partial government shutdown are entirely unproductive.
This year, gold prices have surged by almost 50%.
This increase is primarily due to robust central bank purchases, heightened demand for gold-backed exchange-traded funds, a weakening dollar, and a growing interest from retail investors who view gold as a hedge against escalating trade and geopolitical tensions.
Oil rises
Oil prices rallied nearly 2% in early trading today, recovering a significant portion of last week’s losses.
This rebound from Friday’s four-month low follows Sunday’s OPEC+ announcement of a smaller-than-anticipated output increase.
“The limited supply adjustment was seen as a supportive move that would help offset a glut in the oil market while still signalling confidence in global demand levels,” Morrison said.
Last week, West Texas Intermediate (WTI) front-month crude prices dipped below the $61.50 resistance level, continuing their decline toward $60 per barrel.
This downward trend was driven by significant selling pressure. Contributing factors included anticipation of increased supply from OPEC+, the reactivation of an Iraqi/Kurdish pipeline through Turkey after a two-and-a-half-year hiatus, and a rise in US crude inventories.
China’s crude oil imports were being stockpiled rather than consumed, indicating weak demand growth and abundant supplies.
Morrison added:
So far WTI has been unable to break back significantly above resistance (previously support) around $61.50. Until it does, then a retest of $60 per barrel can’t be ruled out.
Base metals
On Monday, base metals trading was showing a softer trend.
The recent surge in tin prices over the weekend highlights how quickly unique supply limitations can overshadow narratives of weak cyclical demand, according to Neil Welsh, head of metals at FCA regulated multi-asset brokerage Britannia Global Markets.
Meanwhile, Indonesia’s extensive measures against illegal mining are not only eliminating an unregulated part of the market but are also necessitating a redistribution of the world’s tin supply.
“That said, the possibility of reactivation under state oversight tempers the upside,” Welsh said.
Elsewhere, copper continues to command attention: production disruptions (e.g. at Grasberg) reinforce the fragile nature of supply surfaces.
Against this backdrop, many analysts continue to view aluminium as a potentially more balanced investment opportunity.
At the time of writing, the three-month copper contract on the London Metal Exchange was at $10,684.20 per ton, down 0.3%, while the aluminium contract was up 0.6% at $2,728.10 per ton.
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