Commodity Calls: Week Ending 16 February 2024

Crude oil looks to rise as geopolitical tensions return to the Middle East, precious metals remain dependent on the Fed’s rate-cut narrative, and copper has a strong week thanks to supply-constraint fears.

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

Crude Oil


  • Crude oil prices may rise as geopolitical tension has returned to the Middle East. Israel’s military occupied the city of Rafah in Gaza after Israeli Prime Minister, Benjamin Netanyahu, rejected a counterproposal from Hamas for a hostage and ceasefire agreement.1 Houthi rebels have also continued their attacks on ships in the Red Sea – including a strike on a US carrier.2


  • The OPEC’s spare oil production capacity has hit its highest level in almost eight years (excluding Covid-19 adjustments).3 While the Middle Eastern conflict threatens up to 13% of the world’s crude oil supply, the OPEC can increase production by up to 6.4 million barrels per day if needed.4

Explore crude oil with BCOM.

Precious Metals


  • A UBS forecast expects gold prices to eclipse US$2,200 per ounce by the end of the year on a projected weaker dollar and eventual easing in monetary policy.5 The same report expects silver to outperform as the precious metal tends to have a leveraged reaction to gold price movements.
  • Silver is heavily tied to the health of the economy due to its industrial uses. It has underperformed gold significantly in the past year, and any significant rebound in price could be dramatic.6


  • Gold fell under US$2,000 for the first time this year after inflation in the US surprised to the upside.7 Unexpectedly sticky inflation has caused traders to re-evaluate bets on rate-cuts in the first half of 2024. Gold has historically outperformed when the Federal Reserve reduced interest rates.

Explore precious metals with ETPMPM.



  • Copper recorded its biggest weekly gain in three months on recent positive consumer data in China and falling global inventories. Chinese locals travelled the most in five years this Lunar New Year, implying that consumer sentiment and spending may have bottomed and are on their way to recovery.8 Chile’s copper production fell 1.4% last year, thanks largely to reduced output from Codelco, the largest copper miner in the world.9


  • Overall economic data from China continues to underperform expectations. Manufacturing PMI for January came in at 52.7 but missed forecasts.10 Chinese CPI YoY sat at -0.8%, continuing its deflationary streak.11

Explore copper with WIRE.