Cover News Reporter Zhu Ning
Since the beginning of this year, the volatility of the commodity market has increased, and the futures prices of crude oil, gold, copper and other major varieties have continued to rise, among which the most eye-catching is undoubtedly gold that has reached a new high. On Friday, both international gold futures and spot prices hit record highs. COMEX gold rose 1.76% to $2,349.1 an ounce, while spot gold in London also surged 1.77% to $2,329.57.
COMEX Gold Trend
The central bank continued to buy gold
Gold prices have risen one after another
In fact, gold futures in New York rose 9.8% for the entire month of March, the biggest monthly increase in more than three years, and were up 1.76% at $2,349.1 an ounce as of the previous session. In terms of domestic gold prices, on March 29, the closing price of AU99.99, which was more active in gold spot trading on the Shanghai Gold Exchange, was 527.54 yuan per gram, an increase of 9.68% from the closing price on February 29.
For the recent trend of gold, some industry analysts said that the first factor is the uncertainty of the world economic growth prospects brought about by international geopolitical conflicts and local turmoil, in addition, the investment strategies of sovereign wealth funds in some countries, including China, are facing adjustments recently.
Shanghai gold trend
It is worth noting that data released by the central bank on April 7 showed that China's gold reserves were 72.74 million ounces at the end of March and 72.58 million ounces at the end of February, marking the 17th consecutive month of increasing gold reserves.
Other analysts believe that the market is widely expected that the Fed will maintain an accommodative stance, even if inflation is stubborn and economic data is strong, which means that real interest rates will fall further, which is good for gold prices. The recurrence of short-term U.S. economic and employment data may bring back and forth fluctuations in gold prices, but as the negative impact of the high interest rate environment on the economy gradually emerges, the rise in U.S. Treasury yields may be nearing the end, forming support for medium-term gold prices.
Brent crude oil trend
For the first time in 5 months, the oil stood at $90
China's commodity price index rose in March
In addition to gold, since the beginning of this year, the prices of various commodities have started a "soaring" mode, and gold, copper, aluminum and other metals have performed particularly well. Since March, the global copper price has continued to rise, on March 16, the international copper price (LME copper) once broke through the $9,000/ton mark, so far, the international copper price has exceeded $9,300/ton.
In addition, WTI crude oil rose 4.5% this week to $86.91 per barrel, and Brent oil rose 4.22% to $91.17 per barrel, which is the first time in five months that Brent oil has risen above the $90 mark. It should be pointed out that in the first quarter of this year, WTI crude oil futures once rose from $70 / barrel to $83 / barrel, with a cumulative increase of 15.66%.
Goldman Sachs, the "commodity standard-bearer", said in a recently released research report that raw material prices may rebound by 15% this year as borrowing rates fall, manufacturing recovery and geopolitical risks continue. Goldman Sachs predicts that copper, aluminum, gold and petroleum products may rise in price. Goldman Sachs also warned in the report that not all commodities will rise in price, and investors should choose carefully.
The data showed that the global manufacturing purchasing managers' index (PMI) expanded for the first time since September 2022 in recent days, indicating continued improvement in manufacturing activity. Goldman Sachs expects copper prices to hit $10,000/t by the end of this year and $12,000/t in 2025. Aluminum prices are expected to rise to $2,600/mt this year, which is still nearly 10% upside from the current level.
It is worth mentioning that in addition to bulk commodities such as ferrous metals and precious metals, major agricultural products such as lean pork, orange juice, palm oil, cattle and cotton have risen significantly since the beginning of this year.
From the perspective of domestic commodities, the China Federation of Logistics and Purchasing recently announced China's commodity price index in March. China's commodity price index was 112 points in March, up 0.6% month-on-month. In terms of industries, the price index of non-ferrous metals and chemicals rose month-on-month, especially the price index of non-ferrous metals increased significantly, up 3.6% month-on-month. The chemical price index rose for three consecutive months.
Among the 50 commodities monitored by the China Federation of Logistics and Purchasing, 23 commodities rose in March compared with the previous month. The top three price increases were lithium carbonate, palm oil and refined nickel, up 15.2%, 8.8% and 4.9% respectively from the previous month.
London LME copper trend
Institutions are bullish on the commodity outlook
For the commodity market outlook, institutions represented by Goldman Sachs said that they will continue to be bullish on the commodity market outlook. Goldman Sachs said commodity prices will rise this year as the Federal Reserve and the European Central Bank cut interest rates and industrial and consumer demand will be supported.
A Goldman Sachs report noted that raw material prices could rise by 15% in 2024 as borrowing costs fall, manufacturing recovery and geopolitical risks persist. In Goldman Sachs' year-end price forecast, copper will rise to $10,000/mt, aluminum to $2,600/t, and gold to $2,300/oz.
On a macro level, policymakers at both the Fed and the ECB have signaled their intention to cut interest rates this year as inflation comes down. "We found that in a non-recessionary environment in the United States, interest rate cuts lead to higher commodity prices, with metals (especially copper and gold) boosting the most, followed by crude oil," Goldman Sachs analysts said. Importantly, the positive impact on prices tends to increase over time as the boost to economic growth from accommodative financial conditions becomes apparent. ”
"The Fed's interest rate hike cycle will eventually end this year, although there are 'twists and turns', but it will not affect the start of the interest rate cut cycle in 2024. Some industry researchers believe that the weak expectations of the US dollar will stimulate the "financial attributes" of non-ferrous metals, coupled with the recovery of domestic and foreign demand, PMI has rebounded more than expected, which will greatly promote the consumption growth of non-ferrous commodities and is expected to open a new round of demand for some resource commodities.
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