Gold and Silver prices ended slightly lower on Friday (15/12). Friday’s strengthening US Dollar weighed on metal prices. In addition, hawkish comments from New York Fed President Williams weakened Gold prices, as he rejected speculation about a Fed rate cut in March.
Looking at the data, the number of initial jobless claims in the US last week was 202,000, compared to the estimate of 220,000. The previous figure was revised up to 221,000 from 220,000. The number of continuing jobless claims in the week of 2 December was 1.876 million, compared to expectations of 1.887 million, and previous claims were revised to 1.856 million from 1.861 million. US retail sales rose 0.3% m/m in November, compared to an expected decline of 0.1%, and the previous data was revised from a decline of 0.1% to a decline of 0.2%. Core retail sales rose 0.2% m/m, compared to an estimated decline of 0.1%, and the previous figure was revised to flat from a rise of 0.1%.
On Friday (15 December), spot gold fell slightly and is currently trading around $2019. Trading on expectations of a rate cut the day before, was let down by the data released. US retail sales and initial jobless claims data were stronger than expected, suggesting that the job market and consumer spending remain resilient.
Expectations of a major Fed rate cut next year eased slightly, despite signals from Powell’s previous statements. As a result, gold prices stopped moving higher and fluctuated widely yesterday. Early last week, gold rose on bullish news, but the news-driven trend was short-lived and intermittent. Currently, the strength of bulls and bears in the 2019 – 2047 range is relatively balanced. In the short term, rate cut expectations are corrected. But in the medium and long term, traders will focus on when and by how much interest rates will be cut. Once global central banks, issue clear signals to cut interest rates, gold will have a clearer direction.
Last week, XAUUSD prices surged to 2047, then fluctuated downwards, falling to a low near 2015. The failure to surpass the 2051 resistance, indicates that the bullish sentiment is not strong enough. Gold prices are likely to move within the range of 2009 – 2047 next. However, a drop below the 2009 resistance level will bring a decline to test the recent low of 1972 and further to the FE61.8% projection of 1941 from 2144 – 1972 and 2047 drawdown.
Meanwhile, silver prices came under pressure, due to industrial metal demand concerns after US manufacturing production in November, US December S&P manufacturing PMI and Japan’s Jibun Bank December manufacturing PMI reports were all weaker than expected. A supporting factor for precious metals on Friday was low global bond yields.
XAGUSD price recorded a 7-month high of 25.89 last week, but since then it has fallen -13% to record a low of 22.48 before a short rebound to cut losses. For the time being, the price looks quite neutral.On the upside, a move above 24.27 could test the 61.8%FR level around 24.66. While on the downside, a continued move opens up the possibility of testing the recent low.
Copper futures rose towards $3.8 per pound, close to a four-month high of $3.92 hit on December 1, tracking other base metals’ gains as dovish projections from the Fed pressured the dollar and supported the outlook for industrial activity. Central bank members increased the number of interest rate cuts projected for next year while revising down its measure of inflation, raising hopes that lower borrowing costs could support manufacturing activity. In addition, the weaker US Dollar increased foreign demand for base metals priced in USD, thereby also driving up their prices.
Supply concerns also supported this trend, as Panama plans to close its First Quantum Cobre mine, thus halting production from a major source of world supply. However, limited demand expectations from China capped the upside, triggered by the lack of stimulus announcements, after a series of policy meetings this week.
Copper is still on a short-term upward path above the 200-period EMA, and for now it tends to be neutral. A move to the upside could test 3.92 resistance while a move below 3.84 could test 3.74 support.
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Ady Phangestu
Market Analyst – HF Educational Office – Indonesia
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In the fast-paced world of investing, keeping an eye on the hottest commodities is crucial to stay ahead of the game. As we approach the end of 2022 and look forward to a new year, it’s essential to know which commodities are projected to shine in 2023. In this must-read review, we will cover everything you need to know about the most promising commodities for the 18-22 December timeframe.
But first, let’s start with the basics. What exactly are commodities? In simple terms, commodities are natural resources or agricultural products that are traded in bulk. Examples of commodities include gold, oil, corn, and coffee. These assets hold intrinsic value and are often seen as a hedge against inflation. Commodities are also highly susceptible to global events and tend to follow cyclical patterns, making them an attractive option for investors.
Now, let’s dive into the hottest commodities that are expected to make a splash in 2023:
## Gold ##
Gold has always been a popular commodity, known for its stability and long-term value. Historically, gold has been a safe haven for investors during times of economic uncertainty, making it an excellent commodity to include in your portfolio. In 2022, gold saw a slump due to the strengthening US dollar and the rise of cryptocurrencies. However, experts believe that 2023 could be a turning point for gold, with prices projected to hit an all-time high. With the current global geopolitical landscape and the potential for inflation, gold is a commodity to watch out for in 2023.
## Oil ##
It’s no surprise that oil has made our list of hottest commodities for 2023. Oil is an essential commodity that drives the global economy, and its demand is only going to increase in the future. With the rise of electric vehicles and increasing concerns for the environment, non-renewable resources like oil are becoming scarce. This scarcity, along with geopolitical factors like supply disruptions, could lead to a surge in oil prices in 2023. For investors, this presents a significant opportunity to capitalize on this commodity.
## Lithium ##
Lithium may not be a well-known commodity for many investors, but it’s one to keep an eye on in 2023. This rare metal is used in rechargeable batteries for electric vehicles and other electronic devices. As the world shifts towards renewable energy, the demand for lithium is expected to soar. Projections show that the demand for lithium could triple by 2025, making it a desirable long-term investment. With new technologies like solid-state batteries that require even more lithium, investing in this commodity could bring significant returns in the future.
## Soybeans ##
Soybeans are another commodity that is expected to see a surge in demand in 2023. These protein-rich beans are widely used in the production of animal feed and several food products. With the global population on the rise and the increasing demand for protein-rich sources, soybean consumption is expected to grow. This forecasted demand, coupled with supply chain disruptions and climate-related events, could lead to a spike in soybean prices, making it a lucrative investment.
## Coffee ##
Coffee is a commodity that many of us can’t imagine starting our day without. It’s the second most consumed beverage globally, and its demand is only going to increase in the coming years. As more countries develop a taste for coffee, the demand for this commodity is projected to grow. However, factors like climate change, labor shortages, and pests could potentially impact the supply of coffee beans. With all these elements in play, investing in coffee in 2023 could bring great returns for investors.
## Practical Tips for Investing ##
Now that you know the hottest commodities for 2023, here are some practical tips for investing in them:
– Do your research: Always conduct thorough research before investing in any commodity to understand the market trends and any potential risks.
– Diversify your portfolio: It’s essential to have a diverse portfolio to mitigate any potential losses. Don’t put all your eggs in one basket.
– Monitor global events: Keep an eye on global events like economic policies, geopolitical issues, and climate-related events as they can have a significant impact on commodity prices.
– Consider long-term investments: While short-term gains may seem attractive, commodities are best suited for long-term investments, where you can ride out any fluctuations in prices.
With the right approach, investing in commodities could be a wise move for any investor.
## Benefits of Investing in Commodities ##
– Diversification of portfolio: Commodities offer a unique diversification opportunity for investors who are already heavily invested in stocks and bonds.
– Inflation hedge: Commodities tend to perform well during inflationary periods, making them a great hedge against rising prices.
– Potential for growth: As seen in the past, commodities often see significant price gains in a short period, providing investors with an opportunity for substantial growth.
## In Conclusion ##
2023 is shaping up to be an exciting year for commodities, with several key players expected to shine. Gold, oil, lithium, soybeans, and coffee are commodities that investors should keep an eye on. However, it’s essential to remember that investing in commodities comes with its own risks and requires thorough research and a long-term view. As always, it’s essential to consult with a financial advisor before making any investment decisions. With the right approach and a well-diversified portfolio, you could reap great rewards from these hottest commodities of 2023. Happy investing!
