Category: Commodities

Forex Brief August 4: OPEC+, Jobs, Central Banks, and Trade Signals

Posted on by Skerdian Meta

This week brings a heavy slate of economic data and central bank decisions, alongside an OPEC+ meeting that could steer energy markets. Investors will navigate a mix of labor reports, inflation signals, and trade updates to gauge global economic momentum. Continue reading “Forex Brief August 4: OPEC+, Jobs, Central Banks, and Trade Signals” →

Brent Oil Outlook Unchanged by Goldman Sachs, Demand Concerns Loom

Posted on by Olumide Adesina

Goldman Sachs reaffirmed its forecast that the price of oil would average $64 per barrel in the fourth quarter of 2025 and $56 in 2026. However, it foresees a broader range of risks to its baseline estimates due to recent events.

“Increasing pressure on Russia and Iran-sanctioned oil supply presents an upside risk to our price forecast given the faster-than-expected normalization in spare capacity,” the investment bank stated in a note dated August 3.

Nonetheless, Goldman identified a downside risk to its 2025–2026 average annual demand growth forecast of 800,000 barrels per day because of weak US economic data, the threat of additional secondary tariffs, and the rise in US tariff rates. According to the note, the bank’s economists believe that the weaker data “suggests that the US economy is now growing at a below-potential pace,” which raises the likelihood of a recession in the upcoming year.

The Organization of the Petroleum Exporting Countries (OPEC+) and its allies, including Russia, decided to increase oil production by 547,000 barrels per day for September.

This is the latest in a series of rapid output increases aimed at regaining market share. “We anticipate that the pace of increases in OECD commercial stocks will accelerate and that seasonal demand tailwinds will diminish after September, so even though OPEC+ policy remains flexible,” Goldman stated..

Citi Boosts Gold Target to $3,500/oz Amid Grim US Economic Outlook

Posted on by Olumide Adesina

Citi raised its gold price forecast for the next three months from $3,300 to $3,500 per ounce, with the expected trading range increasing from $3,300 to $3,600, up from $3,100 to $3,500.

The bank believes that short-term US growth and inflation concerns have improved, and that the dollar will continue to weaken, leading to a moderate rise in gold prices to new all-time highs.

President Donald Trump imposed high export taxes on goods from several trading partners, including Taiwan, Canada, Brazil, and India. Trade Representative Jamieson Greer stated on Sunday’s CBS program “Face the Nation” that the tariffs imposed on various nations are likely to remain rather than be reduced as part of ongoing negotiations.

Markets now price in an 81 percent chance of a Fed rate cut in September, according to the CME FedWatch tool. The dollar also declined last week after nonfarm payrolls increased by 73,000 jobs last month, following a downwardly revised gain of 14,000 in June.

Citi also highlights weaker US labor data in the second quarter of 2025, growing concerns about the credibility of the Federal Reserve and US statistics, and increased geopolitical risks related to the Russia-Ukraine conflict. Traditionally seen as a safe-haven investment during political and economic instability, gold tends to thrive in environments with low interest rates. Citi reports that gold demand has grown by more than one-third since mid-2022, and by the second quarter of 2025, prices are expected to double.

OPEC+ Ramps Up Oil Output, Attention Turns to Future Strategy

Posted on by Olumide Adesina

OPEC+ is facing uncertainty about its future strategies as global oil markets are experiencing an increasing surplus. However, the group plans to significantly boost production again in September to complete the reversal of its latest supply cuts to gain market share. During a recent video conference, Saudi Arabia and its allies agreed to increase production by 547,000 barrels per day for next month.

OPEC will increase production as planned
OPEC will increase production as planned

This decision marks the conclusion of a rapid reversal of a 2.2 million barrel cutback implemented by eight members in 2023. The United Arab Emirates is also gradually introducing an additional production allowance.

This increase represents a major shift for OPEC+ and its allies, moving from a focus on protecting oil prices to one of increasing output. Amid geopolitical unrest and strong seasonal demand, this policy shift has helped stabilize oil and gasoline futures, providing some relief for drivers and benefiting U.S. President Donald Trump. However, the market is nearing a significant oversupply due to the added barrels.

Three delegates indicated that OPEC+ will continue to explore options for an additional layer of halted output, which is currently set to expire at the end of 2026 and amounts to approximately 1.666 million barrels. They emphasized that the strength of market fundamentals will determine the group’s future actions, with one delegate suggesting a review later this year. A follow-up meeting is scheduled for September 7 among the eight countries.

A senior OPEC delegate remarked that the group’s unity in strategy is evident from the brief 16-minute call on Sunday. They added that the coalition remains capable of meeting at any time to halt supply increases or even reverse recent agreements.

According to the International Energy Agency in Paris, the fourth quarter is expected to see a surplus of 2 million barrels per day in global oil markets, driven by a decline in Chinese consumption and increased supplies from the U.S., Canada, Brazil, and Guyana. Wall Street forecasters, including JPMorgan Chase and Goldman Sachs, predict that by the end of the year, prices may drop to around $60 per barrel.

Anglo American Share Price (JSE: AGL) Down 10% Weekly Amid Weak Diamond and UK Results

Posted on by Skerdian Meta

Anglo American’s interim 2025 report highlights the cost of its sweeping transformation, as diamond weakness and market volatility weighed heavily on shares despite strong core copper and iron ore margins. Continue reading “Anglo American Share Price (JSE: AGL) Down 10% Weekly Amid Weak Diamond and UK Results” →

Gold Takes Hit, Sinks Below $3,300 as Trump Tariffs Bite

Posted on by Olumide Adesina

The bullion asset traded in negative territory at about $3,285. XAU/USD declined in value as the US dollar rose following US President Donald Trump’s announcement of new tariff agreements with trading partners.

The White House said late Thursday that Trump would establish a base tariff rate of 10 percent, rejecting earlier claims that he might raise the floor to 15 percent or more. Furthermore, an executive order signed by Trump raises the tariff on Canada from 25% to 35%,  from August 1, 2025.

Trump gave trade talks more time by extending Mexico’s current tariff rates for another ninety days. Ahead of the release of the US employment data for July later on Friday, traders are still evaluating the developments surrounding US tariffs. In July, 110K new jobs are anticipated to be added to the US economy, and the unemployment rate is predicted to increase from 4.1 percent to 4.2 percent.

The US Federal Reserve’s (Fed) hawkish posture may have short-term effects on the non-yielding yellow metal. At its July meeting on Wednesday, the US central bank held rates unchanged. Fed Chair Jerome Powell stated that the Fed should wait for additional data before deciding on whether to raise rates in September.

Signs of heightened geopolitical or trade tensions usually boost safe-haven flows and mitigate losses in gold.

Crude Oil Unchanged as Trade Tariff Worries Loom

Posted on by Olumide Adesina

Oil prices experienced little change as President Donald Trump announced tariffs against numerous countries, fueling concerns about their potential impact on oil demand.

 

EIA expects higher crude Oil production in 2025

Crude prices were still expected to increase this week despite the threat of stricter U.S. regulations, especially with restrictions on Russian oil.

However, the dollar’s strength and weak economic data from China limited oil’s weekly gains. While West Texas Intermediate crude futures dipped slightly to $69.25 a barrel, Brent oil futures for October stayed steady at $71.71 a barrel.

Brent and WTI futures rose between 4% and 8% this week after surging in the first half of the week as the U.S. moved to impose harsher sanctions on Russia. China and India, the two largest buyers of Russian oil, faced warnings of tariffs up to 100%, with India also hit with a 25% tariff due to its ties with Moscow. Since China and India are among the biggest oil importers globally, their potential decision to stop purchasing Russian oil could significantly reduce global supplies. Although crude prices appeared to decline since Thursday, this expectation contributed to substantial gains earlier in the week.

On Thursday night, Trump signed an order outlining tariffs ranging from 10 percent to 50 percent against several major U.S. trading partners.

Washington hinted at imposing high tariffs on other nations, including a 35 percent levy on Canada, despite having secured trade agreements with the UK, Japan, and South Korea. Trump’s tariffs, set to take effect in seven days, have raised concerns about potential disruptions to the economy, which could decrease global oil demand.

Additionally, the strength of the dollar surged this week after the Federal Reserve decided to maintain interest rates and indicated that it does not plan to lower them shortly, further putting pressure on oil prices. Weak purchasing managers’ index (PMI) data from China, the world’s largest oil importer, was also a factor, as it revealed sluggish manufacturing activity in the nation.

This PMI data has heightened expectations that Beijing will implement stimulus measures to bolster its economy.

President Trump’s Tariff Bombshell Sends Copper Toward Weekly Loss

Posted on by Olumide Adesina

President Donald Trump’s unexpected decision to exempt refined forms of copper from high US import tariffs caused market instability, and copper was heading for a weekly decline in London.

 

The industrial metal was down 1.4 percent for the week on the London Metal Exchange despite a slight rise on Friday.

Copper prices have fallen more than 20% this week in the US, where traders had been transferring large amounts of copper ahead of the tariffs. Starting Friday, Trump imposed 50% tariffs on semi-finished copper products, including pipes, wires, rods, sheets, and tubes.

However, less-processed forms of the metal, such as concentrates, cathodes, and ore, were exempt. The large premium that New York futures had over London disappeared in response.

Now, traders are scrambling to reserve copper storage space, hoping Trump’s decision will cause a surge of supplies, which have been stored in the US, to be moved to LME warehouses. Storage facilities for the metal, under the supervision of the Shanghai Futures Exchange, Comex, and the LME.

Central Banks Gold Rush Cools After Historic Surge

Posted on by Olumide Adesina

Central banks and jewelers cut their gold purchases in the second quarter as the driving forces behind a sharp rally slowed down due to consecutive record-high prices. According to data prepared for the World Gold Council, a trade organization, central banks bought 166.75 tons during the three months, one-third less than in the first quarter, making the first-half purchases the lowest since 2022.

The current central bank demand forecast for 2025 is approximately 815 tons of gold. As the dollar weakened against other currencies and investors sought safety amid U.S. President Donald Trump’s trade wars, gold prices increased by over 25% this year, with institutional investors playing a significant role in this rally. While traders await a catalyst to trigger further gains, gold has mostly remained within a range since reaching a record high of $3,500 in April.  Surveys of central banks indicate that they are likely to continue accumulating gold. A  survey revealed that 95% of these institutions expect global central bank reserves to increase in the coming year.

Following the invasion of Ukraine, purchase rates for gold doubled as its benefits as a hedge against political risks became evident, especially after Russia’s foreign exchange reserves were frozen. Additionally, small, unnoticed purchases in over-the-counter markets contributed to the higher overall demand for gold this quarter. Despite rising prices, investors are purchasing more gold than before.

According to the World Gold Council (WGC), total gold purchases increased by 45% year-over-year to $132 billion.

The world’s largest bullion market has experienced a significant shift, largely due to the impacts of the trade war with China. While the demand for investment bars and coins has remained relatively stable, demand for gold jewelry in mainland China dropped by 45% compared to the previous quarter.