HomeOpinionCeteris Paribus: Commodities: A cross-section

Ceteris Paribus: Commodities: A cross-section

By Eben Mabunda

THE price of gold on Wednesday, October 27,  continued its upward trend as compared to Tuesday’s out turn in the global market as the gold price rose by 0,18% to US$1 816,70 per Troy ounce. This price level is 4,24% higher than the average gold price observed in the past 30 days (US$1 739,7).

In the week ended October 22, gold prices inched up 1,6%, extending gains to a fourth consecutive session, and were on track for a second straight weekly gain as a weaker US dollar and growing inflationary pressure boosted demand for the safe-haven metal. The US-dollar index headed for a second week of declines, lending support to gold by making it more attractive for buyers holding other currencies. Year to date, gold has declined more than 5,2%

Platinum

On Wednesday, the platinum price has also shown an uptick as the precious metal platinum rose 0,05% to $1 078,00 per Troy ounce. In the week ended October 27, platinum shrunk by 1,2% closing the trading session at US$1 044 per ounce, amid falling demand from China, the largest base metal consumer.

In other news, South African mine operators need to take hydrogen and fuel cells very seriously as a pathway to decarbonisation, a webinar hosted by law firm Fasken heard this week.

Heavy industries, confronted with the prospect of bringing the carbon intensity of their operations to zero, need all end uses possible to get to zero, with hydrogen seen as able to fill the gap left by processes unable to be electrified. Year-to-date, Platinum is down over 3,3%.

Copper                        

Copper prices extended their downward path in the week ended October 27, pressured by uncertainty over China’s moves to dampen coal prices and as speculators squared positions ahead of the weekend.

Prices had rebounded early in the week on renewed worries about scarce supplies but later went into the red. In the week, platinum prices declined 4,9% to settle at US$9 704 per ounce from US$10 206 recorded the prior week. Copper has performed fairly well having inched over 28% in the year.

Nickel

Elsewhere, recent data showed China’s imports of nickel pig iron, a cheap substitute of refined nickel, fell 12,3% from a month earlier in September. As part of a market correction, nickel prices fell to US$19 739 per tonne in the past week. The fundamental outlook for the metal remains bullish on growing concerns over supplies coupled with firm demand with the metal soaring above 20% in 2021.

Nickel output from the Philippines, the second-largest producer, is expected to be 10% lower than the annual average due to frequent rainfall and fewer vessels coming in. Also, the latest data showed nickel production at Russian miner Nornickel fell 23% from a year earlier to 129 858 tonnes in the first three quarters of the year.

Brent/Oil  

Brent hit US$86,70 a barrel on Monday, just 4 US cents below its October 2018 high with a bullish sentiment about low supplies tamped by concerns from world leaders that demand disruptions from the Covid-19 pandemic may not be over. In 2021, oil prices surged over 65% as prices were boosted by worries about coal and gas shortages in China, India, and Europe, spurring some power generators to switch from gas to fuel oil and diesel.

Goldman Sachs said a strong rebound in global oil demand could push Brent crude oil prices above its year-end forecast of US$90 per barrel with predictions, crude oil prices to reach US$110-per-barrel by next year, a 30% jump from the current levels of US$85/bbl. — Written in collaboration with Nason Mafuya.

  • Mabunda is an analyst and TV anchor at Equity Axis, a leading financial research firm in Zimbabwe. — ebenm@equityaxis.net

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