Commodity Capsule: Brent crude oil climbs to two months high; gold soars; copper price fell

Commodity Capsule: Oil prices bounced back on Tuesday, following a more than 1 per cent drop the previous session, Escalating geopolitical tensions in the Middle East fuelled supply concerns Washington vowed to take "all necessary actions" to defend its troops following a deadly drone attack in Jordan by Iran-backed militants Iran exported 1.2-1.6 million barrels per day of crude oil through most of 2023 representing 1-1.5 per cent of the global oil supply. Brent crude futures rose past $82/barrel. US West Texas Intermediate crude rose to $77 a barrel Both contracts fell on Monday amid a deepening real estate crisis fueling worries about demand from China, after the Hong Kong court ordered the liquidation of property giant Evergrande Group.

London copper prices fell but remained in a tight range on Tuesday, Investors and traders exercised caution ahead of a key rate decision in the United States due later in the week. Copper on the London Metal Exchange eased to $8,543/metric ton Dollar maintained a narrow range against major peers as traders awaited the Federal Reserve's monetary policy decision later in the week. Fed is expected to hold interest rates, while the focus is on the tone that Fed Chair Jerome Powell will strike at the press conference on Wednesday and hints of potential rate cuts shortly.

Gold prices flitted in a tight range on Tuesday, ahead of US central bank's verdict on rates Market will watch comments from Chair Jerome Powell for clarity on the timing of easing monetary policy, though weak dollar and lower bond yields lend support. Global gold held its ground at $2,031 per ounce.

The dollar index weakened but held above the 103 mark. Yields on benchmark U.S. Treasury notes held near a two-week low. Markets widely expect the US Fed to stand pat on rates at its two-day policy meeting that starts later in the day, but attention will largely be on comments from Powell on Wednesday. Traders are betting on five quarter-point rate cuts for 2024 in the US, with the first of those arriving at a coin flip chance in March

Chicago soybean futures touched a two-year low below $12 a bushel on Tuesday, weighed down by improving supply expectations from South America and concerns about demand from China. Corn futures fell and were near three-year lows amid plentiful supply, while wheat edged down under pressure from cheap grain flowing out of the Black Sea region. CBoT soybean was down and dropped under $12 a bushel, for the first time since November 2021. CBOT corn dropped to $4.38 a bushel, close to a three-year low Wheat fell to $5.91 a bushel, not far from September's three-year low of $5.40.

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