Commodity Capsule: Brent crude oil fell; gold prices moved little; copper advances

Commodity Capsule: Gold prices moved little on Monday, seeing little relief from recent losses as traders continued to price in higher-for-longer US interest rates before a Federal Reserve meeting later this week.

Yellow metal tumbled from record highs hit earlier in April as safe-haven demand waned in the absence of any escalation between Iran and Israel. This left gold vulnerable to outflows in the face of restrictive U.S. monetary policy.

US gold futures expiring in June were flat-to-weak around $2,342 an ounce.

A relatively strong dollar weighed on gold, in the wake of hotter-than-expected reading on the PCE price index.

Growing signs of sticky US inflation saw traders largely price out expectations for early rate cuts by the Fed. 

The central bank is now only expected to begin trimming rates in September, or even the fourth quarter.

This puts upcoming Fed meetings squarely in focus more cues on the central bank’s plans for rates.

Copper prices advance, back at two-year highs on China hopes.

Among industrial metals, copper prices hit two-year highs on Monday as hopes for strong Chinese demand were boosted by Beijing further loosening restrictions on house buying in major cities, to support the property market.

China’s property market is a key facet of the economy and a major driver of copper demand.

Copper futures on London Metal Exchange rose past $10,000 a ton- their highest level since early May 2022.

Expectations of tighter supplies had been a major boost to copper prices in recent weeks, especially as the West tightened its sanctions on Russian metal exports.

Focus was now on key Chinese purchasing managers' index data due this week.

Oil prices fell on Monday, erasing gains from Friday.

Israel-Hamas peace talks in Cairo eased fears of wider conflict in the Middle East.

US inflation data further dimmed the prospects of interest rate cuts anytime soon.

Brent crude July futures fell under $88/barrel. West Texas Intermediate futures were down hovering $83 a barrel mark.

Israel's foreign minister said on Saturday a planned incursion into Rafah could be put off in the event of a deal that involves the release of Israeli hostages.

A White House spokesperson said Israel had agreed to listen to US concerns about the humanitarian effects of the potential invasion.

Markets are also on watch for the U.S. Federal Reserve's May 1 policy review.

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