Commodity Calls: Week Ending 1 November 2024

Uranium producers form strategic partnership, the OPEC+ pushes back output increases, and Asian investors snap up gold ahead of the US election.

Join Global X each week for ‘Commodity Calls’ to explore all the recent signals and developments that occurred in the world of commodities.

Looking for more? Check out this week’s Market Moves and Thematic Spotlight.

Uranium

Bullish

  • Kazakhstan’s Kazatomprom has formed a strategic partnership with Mongolia’s MonAtom to provide new opportunities for uranium within both countries.1 The partnership will allow for the exchange of experience and technologies targeted at improving the efficiency and safety of uranium production.
  • Swiss company Deep Atomic has unveiled one of the West’s first SMR designs.2 The SMR, named MK60 is a light-water small modular reactor. Each unit generates up to 60 MW and can provide up to 60MW of additional cooling capacity when paired with datacentre operations.

Bearish

  • US regulators have rejected Amazon’s power purchase agreement with nuclear power provider Talen Energy.3 The Federal Energy Regulatory Commission, the US’s top energy regulator, voted 2-1 against the deal that would’ve seen Talen Energy increase energy output to facilitate Amazon’s datacentre demands. The deal was seen as unfairly prioritising Amazon’s energy security over the general public.

Explore uranium with ATOM.

Crude Oil

Bullish

  • The OPEC+ has pushed back its scheduled December production increase as prices have continued to struggle over the past quarter.4 The oil producing bloc had already postponed the restart from October, however with Brent trading near US$73 a barrel, the price is now too low to support government spending for multiple major OPEC members.

Bearish

  • Russia and Ukraine have entered discussions about halting attacks on each other’s energy facilities and infrastructure.5 Should an agreement be reached; it could mark a step toward de-escalation of the war and reduce risk premiums on Russian and Ukrainian crude oil exports.

Explore crude oil & energy with BCOM.

Gold

Bullish

  • Asian gold ETFs saw their biggest weekly inflow since at least 2003 last week in the lead up to the US Election.6 Asian investors are investing in gold as a hedge against geopolitical risks. Both a Trump or Harris presidency could lead to tariffs and sanctions levied against China, which could cause a sell-off or increased volatility.
  • A poor employment change report could be signalling that the US job market is weaker than previously expected.7 The US added just 12,000 jobs last month against market expectations of 106,000. A weakening labour market could add pressure on the Federal Reserve to cut rates at a more aggressive pace.

Bearish

  • Gold sold off last week after hitting an all-time high of US$2800.8 Investors are entering over-bought territory with net long contracts nearing all-time highs.

Explore gold with GOLD.

 

Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at 04/11/2024. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.

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This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalised investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.