Commodity wrap: Fed rate-cut doubts push gold, silver prices lower; oil steady

Gold and silver prices fell on Monday as traders assessed expectations of rate cuts by the US Federal Reserve. 

Meanwhile, oil prices were steady as loadings have restarted at the Russian export hub of Novorossiysk, a Black Sea port, following a two-day pause caused by a Ukrainian attack.

Prices of base metals were also in the red as traders waited for more clarity regarding the Fed’s monetary policy. 

The three-month copper contract on the London Metal Exchange was at $10,786.50 per ton, down 0.5%, while the aluminium contract was 1.8% lower at $2,811.50 per ton. 

Gold falls

Gold prices declined on Monday as traders anticipated the release of US economic data later in the week, seeking indicators regarding the Federal Reserve's future interest rate path.

The gold market is currently under pressure from a strengthening US dollar, which makes the dollar-priced metal more expensive for international buyers.

Investor focus is on upcoming US economic data, including the delayed September nonfarm payrolls report due on Thursday, for clues about the nation's economic health.

This week, gold is also weighed down by diminishing expectations of a US rate cut. 

Policymakers' recent cautious statements have caused the probability of a December rate cut to fall to 43% (down from over 62% last week), according to the CME FedWatch tool.

As a non-yielding asset, safe-haven gold typically performs better in a low-interest-rate environment.

“Gold hasn’t been helped by comments from FOMC members last week, suggesting that the Fed should keep rates unchanged at its monetary policy meeting in December,” said David Morrison, senior market analyst at Trade Nation. 

For silver, a sustained drop below the $50 level this week would be a significant indicator that the metal’s price could decline further, as it searches for reliable support, according to Morrison. 

At the time of writing, the COMEX gold contract was at $4,067.69 per ounce, down 0.7%, while silver was 0.8% down at $50.305 an ounce. 

Oil steady

Following a two-day suspension after a Ukrainian attack, loadings at Russia's Novorossiysk export hub on the Black Sea resumed on Monday, resulting in a slight dip in oil prices this morning. 

However, at the time of writing, prices were flat from their previous close. 

Oil loadings in Novorossiysk resumed on Sunday, as confirmed by LSEG data and two industry sources. Despite this resumption, the ongoing focus remains on Ukrainian attacks targeting Russian oil infrastructure.

On Saturday, Ukraine's military reported a successful strike on Russia's Ryazan oil refinery. 

Furthermore, Kyiv's General Staff stated on Sunday that the Novokuibyshevsk oil refinery, located in Russia's Samara region, was also hit.

Western sanctions, imposed in an effort to encourage peace talks with Moscow regarding Ukraine, are being closely watched by investors due to their potential effect on Russian supply and trade flows. 

Specifically, the US has banned deals with Russian oil companies Lukoil and Rosneft after November 21.

On Sunday, US President Donald Trump announced that Republicans are developing legislation to sanction any country trading with Russia, noting that Iran might also be included in this measure.

“Over the longer term, traders continue to keep in mind ongoing supply and demand forecasts,” Trade Nation’s Morrison said. 

At the time of writing, the price of West Texas Intermediate crude was at $59.97 per barrel, while Brent was at $64.32 a barrel, both largely flat.