Commodity Capsule: Brent crude oil steady; gold in tight range; copper slips

Commodity Capsule: Gold prices kept to a tight range on Tuesday amid persistent concerns over higher-for-longer interest rates.

The US market holiday on Monday made for scant immediate trading cues.

Yellow metal found some support at the $2,000 an ounce level, recovering sharply from a two-month low over the past two sessions.

Gold is holding within the $2,000-$2,050 trading range established through most of 2024.

Increased geopolitical ructions in the Middle East and between Russia and Ukraine offered gold some support in recent sessions.

Traders began steadily pricing out chances of early interest rate cuts by the Fed after a series of hotter-than-expected U.S. inflation readings for January, while several Fed officials also warned against bets on early rate cuts.

Citi said gold could soar to $3,000 an ounce by 2025 if central banks increase their bullion purchases, inflation turns sluggish, and the global economy enters a deep recession in the coming year.

LME copper fell slightly on Tuesday, taking little support from a bigger-than-expected benchmark interest rate cut in China.

People’s Bank of China cut its benchmark five-year loan prime rate by a bigger-than-expected 25 basis points to 3.95 per cent.

Investors doubted whether the move would substantially aid the Chinese economy, given that Chinese interest rates have been at record lows for 2 years.

UK and Japan both entered a recession in late 2023, ramping up concerns over slowing global economic growth, which is likely to stymie copper demand.

Oil prices were broadly steady on Tuesday, hovering close to three-week highs on heightened Middle East tensions and recovering China demand.

Brent futures ticked moved around $83.50 a barrel.

Crude markets were "marginally lower" in "quiet trading over the Presidents' Day holiday in the US.

Houthis continued their attacks on shipping lanes in the Red Sea and Bab al-Mandab Strait, with at least four more vessels hit by drone and missile strikes since Friday. 

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