Commodity Capsule: Gold hits record high; brent crude oil rises

Commodity Capsule: Gold prices rose to a record high on Monday, as a softer US inflation report cemented bets that the Federal Reserve would deliver its first interest rate cut of the year in June.

Gold logged its biggest monthly rise in over three years in March after a blistering rally fuelled by rate-cut bets, strong safe-haven demand, and central bank buying.

US April gold futures zoomed $45 past record high levels of $2,260. Most active June futures have recorded all-time highs past $2286 an ounce.

US prices moderated in February, with the PCE price index rising 0.3 per cent, data showed on Friday.

Latest US inflation data is "along the lines of what we would like to see," Fed Chair Jerome Powell said, indicating that a June interest rate cut was on the table.

Traders are currently pricing in a 69 per cent probability that the Fed would begin cutting rates in June, up from 64 per cent before the data came in on Friday.

Indian gold futures hit an all-time high on Monday, tracking gains in overseas markets and squeezing demand in the world's second-biggest consumer of the precious metal.

Domestic gold futures rose to 69,487 Indian rupees per 10 grams, up nearly 10 per cent so far in 2024.

India's gold imports are set to plunge by more than 90% in March from the previous month to hit their lowest since the COVID pandemic

Copper prices kick started April higher on Monday, as positive industrial data posted by China bolstered the demand outlook.

May copper contract on the Shanghai Futures Exchange hovered past 72,800 yuan per ton, having notched 5.4 per cent in March, its biggest monthly gain in 16 months.

China's manufacturing activity expanded for the first time in six months in March, an official factory survey showed on Sunday.

This was also the highest PMI reading since March of last year when momentum from the lifting of tough COVID-19 restrictions began to stall.

Investors eyed the Federal Reserve to cut interest rates in June after data showed easing US prices.

Oil prices rose on Monday, adding to recent gains amid expectations of tighter supply from OPEC+ cuts, attacks on Russian refineries, and upbeat Chinese manufacturing data.

Brent crude rose past $87 a barrel, after rising 2.4 per cent last week. US WTI crude registered a 3.2 per cent gain last week.

Both benchmarks finished higher for a third consecutive month in March, with Brent holding above $85 a barrel since the middle of last month, as OPEC+ pledged to extend production cuts to the end of June which could tighten crude supply during summer in the Northern Hemisphere.

Russian Deputy PM Alexander Novak said that its oil companies will focus on reducing output rather than exports in the second quarter in order to evenly spread production cuts with other OPEC+ member countries.

Drone attacks from Ukraine have knocked out several Russian refineries, which is expected to reduce Russia's fuel exports.

In Europe, oil demand was firmer than expected, rising 100,000 bpd on year in February, vs forecast of 200,000 bpd contraction in 2024--Goldman Sachs.

US Crude oil production dropped 6 per cent in January from December's record high, following freezing weather-- Energy Information Administration.

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