Gold and crude oil prices were in the red on Thursday, even as the market bet on a reduction in US interest rates in the coming week.
On Thursday, gold prices trimmed earlier losses and remained near record highs.
Meanwhile, silver prices on COMEX gained sharply, hitting the $42 per ounce mark for the first time since 2011.
Copper prices also rose on Thursday on hopes that the US Federal Reserve is likely to cut interest rates next week.
Gold prices fall
Gold prices dipped on Thursday.
Despite the slight retreat, the metal remained near record highs, fueled by strong anticipation of an interest rate cut by the Federal Reserve next week.
Gold prices reached an all-time high earlier this week, despite a decline on Thursday.
This year, the yellow metal has seen a nearly 40% increase due to aggressive trade policies from US President Donald Trump, ongoing conflicts in the Middle East and Ukraine, and central bank purchasing.
US consumer prices rose in August, marking the largest annual increase in seven months.
This occurred alongside a sharp rise in weekly jobless claims, indicating a softening labour market.
Conversely, US producer prices declined in August, attributed to weaker trade services margins and subdued goods costs.
Recent economic data, including soft nonfarm payrolls and significant downward revisions revealing 911,000 fewer jobs through March, suggest a cooling economy.
This has heightened expectations for the Federal Reserve to ease its monetary policy.
According to CME FedWatch data, markets are now fully pricing in a 25-basis-point interest rate cut at next Wednesday’s Fed policy meeting, with a slight possibility of a half-point reduction.
The central bank had previously paused its easing cycle in January to assess the inflationary effects of tariffs.
At the time of writing, the gold contract on COMEX was at $3,674.22 per ounce, down 0.2%.
Oil prices slip 2%
Oil prices dropped on Thursday due to worries about weakening US demand and a general oversupply in the market.
These factors outweighed the potential impact on output from ongoing conflicts in the Middle East and the war in Ukraine.
The West Texas Intermediate crude oil on the New York Mercantile Exchange was at $62.49 per barrel, down 1.9%, while Brent prices were 1.6% lower at $66.40 a barrel.
The International Energy Agency’s monthly report indicates a more rapid increase in world oil supply than previously anticipated this year, primarily due to OPEC+’s continued output increases.
Additionally, OPEC’s monthly report, also released on Thursday, maintained unchanged forecasts for non-OPEC supply and demand, citing steady consumption, despite the IEA’s publication.
Meanwhile, OPEC+ announced a production increase starting in October.
This led to a market dilemma, as noted by PVM Oil Associates analyst Tamas Varga: a perceived supply shortage from rising Middle East and Ukraine tensions clashed with actual oversupply due to increased OPEC+ production and growing stockpiles.
In October, Saudi Arabia is poised to significantly increase its crude oil exports to China.
According to a Reuters report, Aramco is scheduled to ship approximately 1.65 million barrels per day (bpd) in October, a rise from the 1.43 million bpd allocated for September.
Silver breaches $42
Silver prices on COMEX breached the $42-per-ounce mark on Thursday for the first time since 2011.
Hopes of an interest rate cut by the Fed next week have propelled prices to a significant high over the last few weeks.
Technically, Silver has been consolidating in a narrow range of $41.50–$40.50 since the beginning of September, according to Vishal Chaturvedi, research analyst at FXstreet.
The daily chart indicates a loss of bullish momentum.
This is evidenced by a bearish divergence on the Relative Strength Index (RSI) and a flattening Moving Average Convergence Divergence (MACD) histogram, both suggesting weakening upward pressure, Chaturvedi said.
Immediate support is at $40.50 an ounce. A drop below this level would reveal the 21-day Simple Moving Average (SMA) around $39.52.
On the upside, a sustained move above $41.50 would reduce the significance of the divergence and open the door toward the $42.00 psychological barrier and beyond.
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