Commodity Roundup: Gold, oil set to snap three-week losing streak

Spot gold prices were headed for a weekly gain after three consecutive declines, in part supported by Federal Reserve rate cut hopes in 2024, while crude oil prices were on course for a more than 3% gain for the week on a positive demand outlook.

Spot gold (XAUUSD:CUR) was up 0.5% for the week, after hitting a record $2,449.89 on May 20, rising more than 12% so far this year.

Gold and other metals fell on Thursday after the Federal Reserve flagged only one interest rate cut this year, signaling U.S. interest rates likely will stay higher for longer than previously indicated.

Turning to the energy market, oil prices (CL1:COM) (CO1:COM) ticked lower on the day, but were on course for their first weekly gain in four, while natural gas prices extended losses.

J.P. Morgan now expects annual U.S. crude oil output, including condensate, to increase by 362 kbd in 2024 and 395 kbd in 2025, it said in its latest note, acknowledging the notable slowdown in drilling activity.

On an annualized basis, the brokerage projects another 400 kbd growth in U.S. NGLs supply in 2024 and an additional 350 kbd in 2025.

Meanwhile, BMI – A Fitch Solutions Company, said, it expects Henry Hub prices to continue their upward trajectory over H224, adding, prices are set to average at $3.4mnbtu over the remainder of the year.

The risks to Henry Hub prices are tilted to the downside, the brokerage added.

BMI continues to expect above-average temperatures for the vast majority of the U.S. in Q3, which is expected to support higher demand for natural gas over that period. BMI currently expects U.S. natural gas demand to grow by 1.9% y-o-y in 2024. Moreover, it expects the U.S. LNG sector to sustain strong demand for feedstock gas, in line with its view of strengthening LNG exports in 2024.

Recent Commodity Price Movements and A look At Some ETFs