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The raw materials rally in the first months of 2024 does not stop. Oil prices extended gains on Monday with Brent rising 0.3% to $84.21 at 10am after rising to $84.43 earlier, its highest since May 10. US crude oil (WTI) rose 23 cents to 80.29 dollars a barrel in June, after previously reaching 80.35 dollars, the highest since May 1st. They also do better in gold and silver. Gold once again updated its historical highs, rising to 2,450 dollars an ounce, subsequently retracing to 2,443 dollars, but maintaining an increase of over 1%. Silver is also rising, marking a +2.6% to 32 dollars an ounce.
Oil reflects tensions in the Middle East following the death of Iranian President Raisi
What worried investors on Monday was primarily the news of the death of the Iranian president, Ebrahim Raisi, in a plane crash. In a geopolitical context already exacerbated by the war in Israel, Raisi’s disappearance contributes to increasing geopolitical tension in the area.
Separately, Saudi Crown Prince Mohammed bin Salman postponed his visit to Japan, scheduled for Monday, due to a health problem with his father, King Salman, Japanese Chief Cabinet Secretary Yoshimasa Hayashi said. Saudi Arabia’s state news agency reported on Sunday that 88-year-old King Salman will undergo treatment for lung inflammation. «This adds to the layer of uncertainty that already surrounds the energy markets this morning following the news of the death of the Iranian president», they explain from Ig. According to experts, WTI prices could rebound further towards $83.50 after exceeding the average of $80.02.
Safe haven assets are on the rise as they also look to rate cuts
Gold prices, in addition to benefiting from gains as a safe haven asset in a context of market tension, are reflecting the slowdown in inflation data in the United States last week which has increased expectations that the Federal Reserve may implement the first interest rate cut soon, while silver hit an 11-year high. Last week’s data showed signs of slowing inflation and traders now predict a 65% chance of a US rate cut by September.
Minerals look to China
Iron ore futures rose Monday to three-month highs after traders welcomed China’s latest support measures for the ailing real estate sector, which uses large volumes of iron ore. .
Notably, China announced “historic” steps to stabilize its real estate sector on Friday, with the central bank announcing 1 trillion yuan in additional financing and easing mortgage rules. Iron ore and steel are widely used in the construction industry, and China is the world’s largest consumer of raw materials. (All rights reserved)
