Gold prices hit another record high on Monday as the yellow metal surged past the $3,800 per ounce mark.
Oil dropped 2% on prospects of more supply increases from the Organization of the Petroleum Exporting Countries and allies in November and December.
Copper prices rose on a weaker dollar and expectations of further interest rate cuts by the US Federal Reserve.
Gold hits record highs
On Monday, gold prices reached an unprecedented high, surpassing $3,860 an ounce.
This surge was driven by increased safe-haven demand, attributed to expectations of a US interest rate cut, fears of a potential government shutdown, and heightened geopolitical instability.
Source: CME Group
US President Donald Trump is scheduled to meet with the top Democratic and Republican congressional leaders later on Monday to discuss an extension of government funding.
A government shutdown would commence on Wednesday if a deal is not reached.
Early on Sunday, Russia unleashed hundreds of drones and missiles upon Kyiv and other areas of Ukraine.
This marked one of the most prolonged assaults on the capital since the full-scale conflict commenced.
The US Personal Consumption Expenditures Price Index aligned with expectations on Friday, strengthening predictions of additional Federal Reserve rate cuts in the October and December meetings.
Gold has seen a 45% increase this year, driven by several factors.
“Central bank buying and strong ETF inflows continue to underpin the rally, with gold now up 45% year-to-date, marking three consecutive quarters of gains,” said Neil Welsh, head of metals at FCA regulated multi-asset brokerage Britannia Global Markets.
Oil drops sharply
Global oil prices dropped nearly 2% on Monday.
This decline was attributed to an improved global supply outlook, driven by two key factors: OPEC+’s planned oil output increase for November and the resumption of oil exports from Iraq’s Kurdistan region through Turkey.
OPEC+ is expected to sanction a further increase in crude oil production during its meeting on Sunday.
According to media reports, the group is poised to confirm a November production increase of at least 137,000 barrels per day. This move is driven by rising oil prices and a strategic push to reclaim market share.
Despite market expectations of a supply glut, OPEC+ has consistently produced nearly 500,000 barrels per day below its set targets.
For the first time in two and a half years, crude oil flowed on Saturday from Iraq’s semi-autonomous Kurdistan region to Turkey via pipeline, according to Iraq’s oil ministry.
Following years of stalemate, an interim agreement has been reached between Iraq’s federal government, the Kurdistan Regional Government (KRG), and foreign oil producers operating in the region.
This agreement, announced by the Iraqi oil minister to Kurdish broadcaster Rudaw on Friday, will enable the flow of 180,000 to 190,000 barrels per day (bpd) of crude to Turkey’s Ceyhan port.
This resumption is projected to eventually reintroduce up to 230,000 bpd of crude to international markets.
At the time of writing, the price of West Texas Intermediate crude was at $64.52 a barrel, down 1.8%, while Brent was at $68.09 a barrel, down 1.7% from the previous close.
Silver and copper
Silver prices rose 0.6% to $46.950 per ounce on Monday. Earlier in the day, the metal breached $47 an ounce for the first time since 2011.
Silver prices on COMEX have risen by a whopping 57% since the start of the year, outperforming even gold, which has gained 45%.
Last month alone, gold’s little brother rose by 15%.
The metal is just shy of its record high of close to $50 per ounce hit in 2011. The most-active contract on COMEX breached the $47 an ounce on Monday for the first time in 14 years.
Meanwhile, the three-month copper contract was at $10,294 per ton, up 0.8% from the last close.
“With the end of the quarter and Chinese National Day holidays this week, base metals are likely to be a little subdued as traders digest last week’s price action after Freeport declared force majeure at its Grasberg mine in Indonesia,” Welsh said.
The Grasberg mine is responsible for 3% of global copper supply and Freeport-McMoRan suggested that a full recovery of output is not likely until 2027.
Citi anticipates a 20% price increase of copper, projecting a surge to $12,000 a ton within the next 6 to 12 months.
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