Commodities Wrap: Gold Near a 7-Month Low as Oil Slips Below US$70
Gold hovered near a seven month low on Thursday, trading around US$4,030 an ounce after a sharp slide this week, as markets continued to price a more hawkish US Federal Reserve and the prospect of higher rates. The metal edged up slightly in early trade, but remained well below the levels seen only days earlier. Oil extended its decline, with US crude slipping below US$70 a barrel, while silver eased and copper and natural gas firmed.
Price strip (intraday, early 25 June)
- Gold (COMEX): around US$4,027 per ounce, up about 0.5 percent on the day but near a seven month low
- Silver (COMEX): around US$57.8 per ounce, down about 0.5 percent
- WTI crude (Aug): around US$69.9 per barrel, down about 0.6 percent
- Brent crude (Aug): around US$73.7 per barrel, little changed on the day
- Copper (COMEX): around US$5.98 per pound, up about 0.5 percent
- Henry Hub natural gas (Jul): around US$3.23 per MMBtu, up about 0.3 percent
Prices from CNBC front-month futures; percent change vs the prior session settlement. Levels are indicative because futures prices move continuously and may differ across data providers, timestamps and active contract conventions.
Gold near a seven month low
Gold was the standout mover of the week, sliding to around US$4,027 an ounce, near its lowest level in about seven months, even as it ticked up modestly in early Thursday trade. The decline reflects a firmer US dollar and growing market bets that the Federal Reserve could keep rates higher for longer, or even raise them, which reduces the appeal of non yielding assets. Silver tracked the move lower, easing about 0.5 percent to around US$57.8 an ounce.
Oil slips below US$70
Crude extended its pullback, with US West Texas Intermediate slipping below US$70 a barrel to around US$69.9, down about 0.6 percent, and Brent near US$73.7, little changed on the day but lower over the week. The move reflects a continued unwinding of the risk premium that had been priced into oil in recent weeks, as supply concerns eased and attention shifted back toward demand and inventories. For energy markets, the question is whether supply stays comfortable through the second half of the year and whether demand signals, particularly from China and seasonal consumption, hold up.
Base metals and gas
Copper firmed about 0.5 percent to around US$5.98 a pound, supported by a steadier tone in industrial metals, while natural gas at Henry Hub edged up about 0.3 percent to around US$3.23 per million British thermal units.
Why it matters for the region
For Gulf producers, the slide in oil prices trims part of the recent boost to hydrocarbon revenue, though the move looks more like a repricing of the risk premium and a stronger dollar than a clear deterioration in the physical oil balance. If demand stays resilient and supply risks remain contained, crude could stabilise around current levels. For gold, the decline lowers the mark to market value of official and private precious metals holdings across the region, even as the longer term case for the metal remains supported by reserve diversification and central bank accumulation, with the near term path sensitive to US rates and the dollar.
Outlook
The near term path for precious metals will hinge on the Federal Reserve, the dollar and upcoming US inflation data, especially core PCE. Sustained hawkish Fed signals would keep pressure on gold and silver. For oil, attention turns to whether supply stays ample and whether demand indicators improve, with steadier demand and contained supply risk helping crude find a floor, while copper remains sensitive to Chinese industrial activity and broader risk appetite.
Sources: CNBC front-month futures (Brent, WTI, gold, silver, copper and Henry Hub natural gas); CNBC Arabia.
