Commodity Roundup: Gold shines despite ETF outflows, silver follows (Commodity:XAUUSD:CUR)

Gold prices (XAUUSD:CUR) continued their ascent on Tuesday after climbing to a new all-time high in the previous session, buoyed by expectations of a Federal Reserve interest rate cut in June.

London’s gold price benchmark also hit an all-time high of $2,098.05 per troy ounce at an afternoon auction on Monday, surpassing the previous record of $2,078.40 set on Dec. 28, the London Bullion Market Association said. Spot gold (XAUUSD:CUR) was up +0.44% to $2,124.26 an ounce by 6:46 am ET.

Spot gold has risen about 3% year-to-date, and registered a second-consecutive monthly of gains, as safe-haven demand amid geopolitical tensions in the Middle East, and strong buying by central banks globally, offset headwinds from a steady dollar, and ETF outflows.

Major precious metals stocks to watch: Eldorado Gold (EGO), Newmont (NEM), Agnico Eagle Mines (AEM), Royal Gold (RGLD), Alamos Gold (AGI), Gold Fields (GFI), Iamgold (IAG), Barrick Gold (GOLD) and B2Gold (BTG) all closed with a gain yesterday.

What brokerages say:

ANZ analysts in a note said, while a transition from tightening to easing monetary cycle is a driver for gold, elevated geopolitical risks, healthy physical and central bank buying should lift the gold price towards $2,200/oz by year-end. “Platinum should regain its luster amid the ongoing substitution of Pt for Pd and strong auto sales.”

However, the gains in gold come despite consistent outflows via ETF holdings.

JPMorgan Commodities Research noted that the estimated value of open interest in precious metals increased by 6% week-on-week to ~$150B, the highest level in six-weeks (March 1).

“Inflows were compounded by bullish price action later in the week, a move that has further extended to start this week with gold prices jumping above $2,100/oz.” Federal Reserve Chair Jerome Powell’s testimony to the US Congress later in the week could provide a clearer indication on when rate cuts could commence.

Saxo Bank said: Gold reached a fresh record closing high despite a run higher in yields, suggesting continued demand from momentum buyers and low short-selling appetite.

Tracking moves in gold, silver prices, too, demonstrated a strong performance recently, and continues to trade in green, driven by expectations of a potential rate cut in June. The metal was also seeing fresh buying.

Turning to the energy side, crude oil prices were trading higher, but have pulled back from the highs seen following the announcement of OPEC+ production cuts, with focus turning to U.S. jobs data, and Powell’s testimony. Natural gas was trading higher for a third-straight session, close to the $2 resistance, after leading U.S. natural gas producer EQT (EQT) joined other U.S. producers in announcing production cuts to respond to persistently low prices.