Commodity Calls: Week Ending 15 November 2024

The 2024 United Nations Climate Change Conference (COP29) continues this week in Azerbaijan where nations are coming together to work towards global decarbonisation goals, with key commodities playing a crucial role in achieving these targets.

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

  • The United Nations Climate Change Conference (COP29) emphasised that achieving decarbonisation by 2050 will be nearly impossible without nuclear energy. Building on the momentum from COP28, where 31 countries committed to tripling nuclear energy capacity by 2050, six additional nations have now joined this pledge. Meanwhile, the United States has unveiled a roadmap detailing its plans to deploy 200 gigawatts of nuclear capacity by 2050.1
  • Uranium prices rose at the end of the week following Russia’s announcement of temporary restrictions on uranium exports to the US.2 As the world’s largest uranium supplier, Russia’s move comes in response to sanctions the US imposed on Russian uranium exports.

Bearish

  • Uranium miner Paladin Energy slashed its production guidance, acknowledging that its initial targets were overly optimistic.3 Ongoing operational challenges at its flagship Langer Heinrich mine in Namibia have exacerbated the situation, leading to a sharp decline in its share price, which lost a quarter of its value following the news.

Explore uranium with ATOM.

Copper

Bullish

  • BHP CEO Mike Henry stated that meeting surging copper demand will require around $250 billion in investment over the next decade.4 He anticipates a 70-100% increase in demand by 2050 and expects further mergers and industry activity as a result.

Bearish

  • A surging US dollar has pressured base metals, including copper, which has dropped to a two-month low. The red metal’s decline has further been driven by uncertainty over Chinese stimulus measures, and the potential for new US tariffs on China, weighing on market sentiment.

Explore copper with WIRE.

Precious Metals

Bullish

  • Industrial metals were higher with Aluminium prices rising 6% last week after China scrapped a tax rebate that helped fuel a boom in exports.5 China is the biggest producer of aluminium, producing around 40 million tonnes of the metal last year, which accounted for more than half of the total global production.
  • Platinum regained its price premium over palladium. Platinum has been trading at a discount to palladium since 2017, but there could be support for platinum driven by mining supply reductions, auto-catalyst demand and broader industrial use.

Bearish

  • The global silver deficit is projected to narrow by 4% to 182 million ounces in 2024.6 This is attributed to a 2% growth in total supply, outpacing a 1% increase in demand, as mine production is expected to increase with rising output from the likes of Mexico, Chile, and the US.
  • Money managers’ bullish positions on gold have dropped to their lowest level in over three months, as Donald Trump’s decisive election victory reduced demand for safe-haven assets.7 Gold prices have declined about 7% since hitting a record at the end of last month, with losses accelerating in the aftermath of the election.

Explore gold with GOLD or broader precious metals with ETPMPM.

 

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 19/11/2024. 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.