Commodities wrap: gold tops $3,600/oz as crude slips ahead of OPEC meeting

Oil prices slumped on Tuesday even as gold reached new heights, triggered by expectations of rate cuts by the US Federal Reserve. 

Gold prices are anticipated to reach unprecedented highs in the coming weeks. 

This surge is attributed to several factors: expectations of US interest rate reductions, apprehension regarding the Federal Reserve's autonomy, and robust demand from both individual investors and central banks.

Copper prices retreated from its highest level since late-March, while silver held its gains above the crucial level of $41 per ounce. 

Gold hits new high

Gold prices on COMEX breached the $3,600 per ounce for the first time ever on Tuesday. 

Analysts with Commerzbank AG had earlier predicted that gold prices could move towards $3,600 an ounce by the end of the year due to expectations of a dovish US central bank in the long-term. 

Gold's price has consistently risen throughout the year, with a more than 34% gain. 

Analysts have adjusted their average 2025 price forecasts accordingly, moving from $2,756 an ounce in January to $3,065 in April, and most recently to $3,220 in July, as reported by Reuters polls.

Financial markets are now anticipating a September interest rate cut, following Fed Chair Jerome Powell's recognition of increasing employment risks.

“The current price resilience suggests that safe-haven demand remains strong, with traders choosing to hold gold as protection against a host of uncertainties including President Trump’s tariffs, fiscal policy across major economies and rising bond yields, which keeps upside pressure on borrowing costs,” said David Morrison, senior market analyst at Trade Nation. 

The December gold contract on COMEX was at $3,616.70 an ounce, up 0.7% from the previous close. The contract hit a record high of $3,617.27 an ounce earlier in the day. 

Silver holds gains, copper retreats

Boosted by an increase in gold prices, silver surged past $40 per ounce earlier this week, marking its first time at that level in 14 years.

At the time of writing, the December silver contract on COMEX was at $41.530 per ounce, largely unchanged from the previous close. The current price level has not been seen since 2011. 

The gold/silver ratio fell to its lowest point this year, reaching 85, as the price of silver outpaced that of gold.

“Silver has put in a strong performance so far this week, having hit a fresh fourteen-year high overnight,” Morrison said. 

While the daily MACD has risen sharply due to the strong upside momentum of recent weeks, it has not yet reached the 'overbought' levels observed earlier in the summer.

Morrison added:

Meanwhile, in London, copper prices cooled after a brief rally that saw them touch their highest level since late March.

Traders are currently assessing the supply and demand outlook in China, a major market for the metal.

In August, the wiring metal saw a 3% increase and began September strongly, trading above $10,000 a ton intraday on both Tuesday and Wednesday.

At the time of writing, the three-month copper contract on the London Metal Exchange was at $9,955.60 per ton, down 0.4% from the previous close. Silver prices on COMEX were at $41.725 an ounce, up 0.3%. 

Oil prices slump 2%

Oil prices dropped 2% on Wednesday following reports that OPEC+ might consider increasing oil output for October.

According to a Reuters report, the Organization of the Petroleum Exporting Countries and its allies are set to discuss further oil production hikes at a meeting on Sunday.

Should this additional increase occur, OPEC+, which accounts for roughly half of the world's oil supply, would reverse a second phase of output reductions (approximately 1.65 million barrels per day, or 1.6% of global demand) over a year ahead of schedule.

An online meeting of eight OPEC+ countries is scheduled for Sunday to decide on October's output levels.

The US Energy Information Administration will issue its crude stockpile report on Thursday, delayed by Monday's holiday.

The American Petroleum Institute is set to release its weekly bulletin later tonight.

However, investors are primarily focused on this weekend's OPEC+ meetings.

At the time of writing, the price of West Texas Intermediate crude oil was down 1.9% at $64.32 per barrel.

Brent crude oil on the Intercontinental Exchange was also 1.7% lower at $67.94 a barrel.