Commodity Capsule: Gold holds a 3-week high; LME copper dips; Oil rises | Watch video

Commodity Capsule: The yellow metal is aided by a weaker dollar as softer-than-expected US economic data spurred bets that the Federal Reserve will have limited headroom to keep raising rates.

Bullion had a strong run-up over the past week, as traders grew more uncertain over the US economic outlook.

Further gains in gold prices were clouded by the prospect of US rates remaining higher for longer; Eyes on a a slew of economic readings this week.

 The dollar steadied from recent losses on Wednesday. The index dropped to 103.50 level in the previous session, dropping from three-month high levels last week.

Dollar and treasury yields fell sharply tracking weaker-than-expected job openings and consumer confidence data.

Focus is now squarely on a revised reading on second-quarter economic growth, Personal consumption expenditures data on Thursday, while August nonfarm payrolls are due on Friday.

Any signs of cooling in US inflation and labor market activity gives the Fed less impetus to raise interest rates further. But given that the central bank has signaled that US rates will remain higher for longer, gold is expected to see limited relief until the central bank decides to begin trimming rates next year.

LME copper dips in cautious trade ahead of key data

Copper prices fell on Wednesday, unwinding some gains seen this week.

Traders and investors exercised caution ahead of the release of key economic data in China and in the United States.

Weakness in the dollar limited losses in copper, it was also dented by uncertainty over China, especially as Beijing showed little signs of unlocking fiscal support for the economy.

Focus is now on key PMI data from China, due on Thursday, for more cues on business activity.

Yangshan copper premium touched its highest since December 2022 at $52 a ton on Tuesday

Oil rises on large US stockpile draw, hurricane concerns

Oil prices extended gains on Wednesday after industry data showed a large draw in crude inventories in the US and as concerns about a hurricane in the Gulf of Mexico kept investors on edge.

Both benchmarks rallied over one dollar/barrel on Tuesday as the U.S. dollar slid after prospects of further interest rate hikes eased following softer U.S. job data.

US crude stocks declined by about 11.5 million barrels in the week ended August 25, according to American Petroleum Institute figures on Tuesday.

Oil major Chevron Corp evacuated some staff from the region, but production was continuing at the sites it operates in the Gulf of Mexico.

Citi sees sugar prices staying high for longer

Citi believes raw sugar prices at the ICE exchange are going to stay elevated for a longer period, possibly testing fresh highs, mainly due to expected production difficulties in Asia and the possible ban on exports from India.

On sugar, Citi upgraded its price target by 1 cent for the last quarter to 25.50 cents per pound, while also increasing targets for next year.

Bank said it expects money managers to increase positioning in raw sugar futures on ICE in coming weeks and see the possibility of prices testing higher levels around 27 to 30 cents in the last quarter of the year.

Catch latest stock market updates here. For all other news related to business, politics, tech, sports and auto, visit Zeebiz.com.