Commodity Calls: Week Ending 22 November 2024

International collaboration to advance nuclear energy initiatives continues to progress, though Australia remains behind. Meanwhile, escalating geopolitical tensions, including the wars in Russia/Ukraine and the Middle East, have driven up prices for key commodities such as oil and gold.

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

• Finland and the UK have signed a memorandum of understanding (MoU) to collaborate on nuclear energy initiatives, including projects, programs, policies, and research and development.¹ The partnership will prioritise new nuclear deployment, including large-scale reactors, small modular reactors, and advanced nuclear technologies to ensure a stable energy supply.

Bearish

• Australia has opted out of joining a pact with allies, including the US and UK, aimed at accelerating civilian nuclear energy development, citing no plans to adopt the technology domestically.² Despite holding nearly a third of the world’s uranium reserves, Australia's hesitance is attributed to the high costs of nuclear power and the lengthy timeline required to establish commercially viable plants.

Explore uranium with ATOM.

Crude Oil

Bullish

• Oil prices have surged last week as intensifying war in the Ukraine boosted the geopolitical risk premium.³ Crude oil prices rose around 7%, with WTI Crude exceeding US$71 per barrel.
• China's crude oil imports are set to rebound in November, reaching their highest level in three months.⁴ China has reported that imports may total around 11.4 million barrels per day, marking the highest level since August and the third-highest monthly volume in 2024.

Bearish

• Macquarie expects oil prices to test new lows in 2025.⁵ The investment bank cited potential increased supply if geopolitical tensions ease, reduced optimism from OPEC regarding demand, and expectations of larger market surpluses.

Explore copper with BCOM.

Gold

Bullish

• Gold recorded its biggest weekly gain since March 2023, as escalating geopolitical tension boosted demand for the precious yellow metal given its appeal as a safe haven asset. The recent surge pushed gold prices above US$2,700 per ounce, further supported by dovish signals from central banks.
• Market sentiment received a boost from Goldman Sachs’ bold forecast that gold prices could reach US$3,000 per ounce in the coming year.⁶ The investment bank expects the growth to be fuelled by consistent central bank demand, particularly those with large US treasury reserves, anticipated monetary easing, and heightened geopolitical and economic uncertainty.

Bearish

• Fitch-owned BMI highlights significant downside risks for gold, anticipating volatility if the Federal Reserve adopts a more cautious stance on interest rate cuts.⁷ Additional risks that BMI suggested investors to monitor heading into the new year include a shift towards risk-on sentiment, a strengthening US dollar, and improved growth expectations.

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 22/11/2024. 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.}