(London) Gold approached its all-time high, buoyed by slowing US inflation, before falling back towards the end of the week.
The ounce of gold reached a high since March 2022 at 2048.74 dollars on Thursday, approaching its all-time high which dates from 2020 at 2075.47 dollars.
Although the yellow metal is sometimes perceived as a safe haven against inflation, it was on the contrary a less vigorous rise in prices than expected in the United States which favored gold in the first sessions of the week.
The Consumer Price Index (CPI) and Producer Price Index (PPI) both showed a deceleration in inflation, prompting investors to bet on a less stringent US Federal Reserve (Fed).
This weighs on the yield of US government bonds, which in turn makes gold, the zero-yield safe haven, more attractive by comparison.
And the fall in the price of the dollar driven by speculation about a less strict Fed also makes gold less expensive for investors using other currencies.
Conversely, on Friday, “gold nosedived as the dollar and government bond yields ended the week on a rebound” after mixed economic indicators, commented Michael Hewson, analyst at CMC Markets.
Around 11:30 a.m. (Eastern time), an ounce of gold traded against 1997.35 dollars, instead of 2007.91 dollars the previous Thursday, the markets having remained closed Friday for the weekend of Easter.
Global Hypoglycemia
Sugar prices were pushed to new highs this week, hitting prices not seen in more than a decade in both London and New York amid escalating shortage fears.
White sugar in London peaked at $690.20 a tonne on Tuesday, the highest since late October 2011, and in New York white sugar climbed to 24.14 cents a pound on Wednesday, a new high since late October. March 2012.
“Concerns over the availability of supply are the main reason why sugar prices have risen over the past six months,” said analyst Bill Weatherburn of Capital Economics.
Major producing countries such as India and China have lowered their sugar production estimates for the 2022-2023 season harvest.
“The next sugar cane harvests in India and Thailand, the second and third largest exporters of sugar, are threatened by the El Niño weather phenomenon”, also specify Carsten Fritsch and Thu Lan Nguyen, of Commerzbank.
This climatic phenomenon causes overheating of the waters of the Pacific off the coast of South America.
In 2016, El Niño caused severe droughts in Thailand and India, significantly reducing harvests and also causing sugar prices to soar.
Lower-than-expected sugar production in India “prompted the government to intervene and limit exports for the rest of the year to ensure sufficient supply” within the country, adds Weatherburn.
While the supply situation is “unlikely” to change much over the next few months, “which will keep prices high”, Weatherburn notes that by the end of the year, “Prices are expected to fall due to increased production, especially in Brazil and Thailand.”
In New York, a pound of raw sugar for July delivery was worth 23.35 cents, down from 23.18 cents eight days earlier.
In London, a ton of white sugar for delivery in August was worth 665.20 dollars against 661.80 dollars the previous Thursday at the close.
nickel shaped
Nickel prices benefited from the general momentum in industrial metals due to the weakness of the greenback, as base metal prices on the London Metal Exchange (LME) are denominated in dollars.
“The weakness of the dollar has given the necessary impetus to base metals” for prices to rise on the LME, explains Daria Efanova, analyst at Sucden.
A weaker greenback makes commodities denominated in dollars more attractive to investors using foreign currencies, thereby increasing their purchasing power.
The pick-up in Chinese activity was also benefiting nickel and other industrial metals, as the country recorded a rebound in the country’s exports for the first time in six months.
In parallel, Thu Lan Nguyen of Commerzbank notes that “the resumption of nickel trading on the LME during business hours in Asia has effectively increased liquidity”.
But according to the analyst, daily volumes traded recently were still around 50% below average levels seen in February last year, a sign that the market has yet to recover from the turmoil that rocked it. in March 2022, when the metal had reached its all-time high.
On the LME, a ton of nickel for delivery in three months traded at 23,995 dollars on Friday, against 22,800 dollars the previous Thursday at the close.