Commodity Calls: Week Ending 13 September 2024

Gold hits a new all-time high on poor economic data, Russia considers restricting uranium exports to the West, and crude oil demand growth slows by most since the pandemic.

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.

Gold

Bullish

  • Gold hit a new all-time high on slightly worse-than-expected US economic data.1 US producer inflation and initial jobless claims both came in higher than forecast, causing a dip in treasury yields as investors priced-in the possibility of a deeper rate cut by the Fed.2 Gold has historically had an inverse relationship with US interest rates.

Bearish

  • According to Bloomberg, global economists have assigned just a 30% chance of recession in the US by 2025.3 A recessionary environment is positive for gold as the precious metal is considered a store of value and safe haven asset.

Explore physical gold with GOLD.

Uranium

Bullish

  • Russian President Vladimir Putin said in a televised meeting that the country would consider restricting uranium exports to the West.4 Russia currently accounts for a third of the world’s uranium enrichment capacity, and roughly five percent of mine supply.
  • Sweden is proposing to invest ~US$100 million in 2025 to expand low-emission energy.5 This includes budgeting for new nuclear builds, designating real estate for nuclear projects, and streamlining the process for permitting new nuclear reactors in the country.

Bearish

  • North Korea has made the first display of its uranium enrichment program for atomic bombs.6 The publicly available video is a sign that the nation no longer sees any reason to hide its weapons program, in stark contrast to its stance in 2002 when it strongly denied accusations by US President Bush.

Explore uranium with ATOM.

Crude Oil

Bullish

  • Hurricane Francine has disrupted multiple oil rigs in the Gulf of Mexico, with up to 675,000 barrels per day of capacity shutting down as operators bunkered down for the storm.7 Francine was upgraded from Tropical Storm to Hurricane on Thursday, then further strengthened to a category two system before the weekend.8

Bearish

  • According to the IEA, crude oil consumption growth is at its slowest since the COVID-19 pandemic due to the cooling of the Chinese economy.9 Weakening US economic data is also driving concerns of a possible recession, which could further impact oil demand.

Explore crude oil with BCOM.

 

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 17/09/2024. 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.