Commodity Roundup: Gold holds steady; China’s April crude oil, copper imports rise

Gold prices held steady on Thursday despite a stronger U.S. dollar (DXY), as markets await further data for clues on potential Fed rate cuts, while oil prices ticked up.

Boston Fed President Susan Collins said Wednesday that interest rates likely will need to stay higher for longer, amid the lack of progress on bringing down inflation this year.

Investors are now looking to the University of Michigan’s consumer sentiment reading on Friday and comments from a slew of Fed officials this week. U.S. consumer price index data is due on May 15.

Meanwhile, money markets are pricing in two Fed rate cuts this year and around 40 basis points of monetary easing following recent weak U.S. jobs data. Lower rates increase the appeal of holding non-yielding bullion.

On the Middle East, U.S. President Joe Biden for the first time publicly vowed to withhold weapons from Israel if its forces make a major invasion of Rafah in southern Gaza.

Israel, meanwhile, continued tank and aerial strikes on southern Gaza. Markets have not reacted directly to the moves, though Brent Crude (CO1:COM) ticked up above $84 a barrel.

“Oil markets were buoyed by a larger-than-expected draw in the U.S. inventory data. The improved China’s trade balance data added to the upside momentum,” said Tina Teng, an independent market analyst to Reuters, adding that crude prices may continue to track economic factors looking ahead.

Data on Thursday showed, China’s crude oil imports rose on the previous year in April, as refiners prepared for a fully recovered Labour Day holiday travel season.

China’s strong industrial activity is apparent in rising imports for all commodities in April, ANZ Research said in a note, adding, the composition of economic growth is favouring commodity demand, particularly the acceleration in manufacturing and the energy transition.

Robust external demand is likely to support key commodity exports, it added.

Refined copper imports rose 8% y/y, but retreated from March due to unfavourable import arbitrage. Copper futures (HG1:COM) ticked up +0.23% to $4.55 on the day.