Gold held steady as investors awaited the US House vote on a government reopening deal, which could clarify economic data and the Federal Reserve’s potential path for rate cuts.
Silver prices rose nearly 2% on Wednesday as the rally in precious metals overshadowed gold’s gains.
Meanwhile, oil prices fell sharply on concerns over an impending oversupply in the market.
However, losses in oil were limited as traders weighed the possibility of the US government shutdown ending, fuelling demand for the black liquid.
Gold and silver rise
Gold prices rose slightly on Wednesday after spending most of the day flat as investors anticipated a US House of Representatives vote on the agreement to reopen the federal government.
A successful vote would provide clearer insights into economic data and the potential trajectory for Federal Reserve interest rate cuts.
Gold began the week with solid gains on Monday and built modestly upon those on Tuesday.
Gold fell briefly on Wednesday, giving in to its momentum from the last couple of sessions.
The decline in prices that occurred around the time of the European lunchtime was likely spurred by a slight recovery in the US dollar.
“But overall, gold is managing to hold on to gains made since last Tuesday’s low,” said David Morrison, senior market analyst at Trade Nation.
The daily MACD continues to look constructive from a bullish perspective as it curls up off neutral levels. But there’s also a hint of nervousness out there.
Meanwhile, silver rose overnight, moving back above the $51.50 mark.
This recovery regained a significant portion of the 7% single-day loss it experienced three weeks prior.
From a bullish standpoint, the outlook is constructive. Following the drop from an overbought state to a neutral level last month, positive upside momentum has been steadily increasing.
At the time of writing, the gold contract on COMEX was at $4,131.26 per ounce, up 0.4%, while silver was 1.5% higher at $51.515 an ounce.
Oil slips
Despite expectations that the resolution of the unprecedented US government shutdown might stimulate oil demand, oil prices dropped over 1% on Wednesday, primarily due to market oversupply.
Crude price gains are being suppressed by an oversupply, as analysts have previously noted.
Following a period of unwinding production cuts since August of this year, OPEC+ recently agreed to temporarily halt further output increases during the first quarter of next year.
“Today’s modest decline came amid subdued trade, with participants reluctant to take fresh positions ahead of US inventory data, which was pushed back due to Veterans’ Day,” Trade Nation’s Morrison said.
Official inventory figures from the US Energy Information Administration are due out on Thursday, following Wednesday’s weekly update from the American Petroleum Institute (API).
The International Energy Agency (IEA) on Wednesday included a new scenario and consequently raised its forecast for future global demand growth.
Despite this significant reversal in stance for the group, the announcement had minimal effect on the current market.
Morrison said:
Prices appear to be rangebound, and this has helped the daily MACD push up towards the neutral area from oversold readings three weeks ago.
Meanwhile, the Organization of the Petroleum Exporting Countries in its monthly report on Wednesday, said that world oil supply will match demand in 2026.
At the time of writing, the price of West Texas Intermediate crude was at $59.73 per barrel, down 2.2%, while Brent was 2% lower at $63.85 a barrel.
Base metals
Most base metal prices rose on Wednesday on optimism that the US government shutdown will end.
A vote in the US House of Representatives on a deal to reopen the federal government is anticipated to provide clarity regarding economic data and the potential trajectory for Federal Reserve rate cuts.
Aluminium continues to be the focus in the near term, maintaining a position near its recent high levels.
This rally is driven by ongoing supply anxieties, stemming from several key factors: capacity restrictions placed on Chinese smelters by the government, energy-related production constraints impacting European producers, and the tightening of US inventories due to tariffs.
Strong investor participation has driven futures in Shanghai to their highest level in a year, accompanied by record trading volumes.
This surge reflects expectations of sustained demand, fueled particularly by construction in the renewable energy and data center sectors.
“For now, aluminium’s resilience is keeping market participants focused on whether the rally can be sustained into year-end,” Neil Welsh, head of metals at FCA-regulated multi-asset brokerage Britannia Global Markets, said in an emailed commentary.
The three-month copper contract on the London Metal Exchange rose 1% to $10,937.70 per ton.
Welsh said:
Underlying fundamentals for copper remain robust. Infrastructure investment, electrification initiatives, and accelerating demand from AI data centres are expected to drive significant consumption growth over the coming decade.
The post Commodity wrap: gold, base metals climb on US shutdown optimism; oil slumps appeared first on Invezz
