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Financial markets

Commodity Market Shaped by Ukraine Negotiations and US Policy

Strategic Insights

— 2 min read

The Frankfurt Stock Exchange has noted that Ukraine negotiations and US tariff and monetary policy are significantly influencing the commodities market. As the central bankers' symposium in Jackson Hole, USA, begins, commodities analysts are anticipating whether Fed officials will signal further interest rate cuts in September. This speculation could potentially boost the price of gold, which has been moving sideways at around US$3,300 per troy ounce.

Key Takeaways:

  • The price of gold is expected to gain a boost if Fed officials signal further interest rate cuts in September, according to Carsten Fritsch of Commerzbank.
  • Precious metals will continue to be supported by the easing of monetary policy, with geopolitical risks causing uncertainty and upward pressure on gold prices, according to Dora Borbely of DekaBank.
  • Central banks, particularly in emerging markets, are continuing to demand gold, stabilizing prices.
  • There is ongoing uncertainty regarding US tariffs on gold, with reports of tariffs on certain gold bars being later clarified by US President Trump.
  • High debt levels in many countries, slowing economic growth, and US interest rate cuts are contributing to the stable price of gold, according to Mobeen Tahir of WisdomTree.
  • Global trading in gold ETCs has been strongly influenced by the Trump/Putin meeting, with increased demand for gold and silver ETCs.
  • High turnover is being recorded on Xetra by gold ETCs, with silver price trackers from WisdomTree also generating strong activity.
  • Xetra Gold's gold reserves have risen to 174 tons, with gold ETCs accumulating over EUR5 billion since the beginning of the year.
  • Silver ETCs have recorded high inflows of EUR1 billion this year, while industrial metal ETCs have seen net outflows of EUR580 million.
  • The oil price has fluctuated sharply, with signals from the war in Ukraine and US sanctions against Russia playing a role.

Statistics:

  • Gold price: US$3,300 per troy ounce (current price)
  • Gold price: US$3,340 per troy ounce (Thursday morning)
  • All-time high gold price: just under US$3,500
  • Silver price: US$37.88 (current price)
  • 14-year high silver price: reached in July
  • Brent oil price: US$67 per barrel
  • Peak Brent oil price: over US$82
  • Lowest Brent oil price: US$58
  • OPEC+ oil supply expansion: significant expansion up to and including September
  • WisdomTree reports: net inflows for energy ETCs over the past four weeks
  • Copper price: experienced significant fluctuations, with a sharp rise at the end of July and a sharp decline at the beginning of August
  • Copper tariff: 50 percent tariff now only applies to imports of semi-finished copper products

Sources:

  • Commerzbank: Carsten Fritsch
  • DekaBank: Dora Borbely
  • WisdomTree: Mobeen Tahir
  • Lang & Schwarz: Michael Norizin
  • Crossflow: ETF analysis and trading firm
  • Xetra Gold: gold reserves at 174 tons
  • WisdomTree: silver price trackers, copper, and energy ETCs
  • Commerzbank: Carsten Fritsch and analyst Fritsch's comments
  • DekaBank: Dora Borbely and analyst Borbely's comments
  • WisdomTree: Mobeen Tahir and analyst Tahir's comments

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