Oil prices edged up on Thursday, boosted by concerns over supply as sanctions on Russian oil weighed on sentiments.
Meanwhile, gold prices were back above the coveted $4,000-per-ounce mark after a few sessions in the red.
Silver on COMEX also rose, tracking the upward movement in the yellow metal on Thursday.
Additionally, base metal prices were mostly in the green as the dollar retreated from its recent highs.
Oil edges up
On Thursday, oil prices saw a slight recovery due to diminishing worries about a potential oversupply as sanctions against Russian companies started to take effect.
Analysts noted that the recent sanctions targeting Russia’s major oil companies are raising worries about potential supply disruptions, even with increased production from OPEC and its allies.
According to a Reuters report this week, Lukoil’s foreign business operations are experiencing difficulties as a result of the sanctions.
“While the outlook for the oil market remains bearish with expectations for a large surplus in 2026, there are clear and obvious risks in the form of potential disruptions to Russian oil flows,” Warren Patterson, head of commodities strategy at ING Group, said.
Furthermore, the continued strength seen in refinery margins provides some resistance to the bearish outlook for the crude market.
Global oil prices dropped for the third consecutive month in October.
This decline was driven by concerns about an oversupplied market, as both the OPEC+ alliance and non-OPEC producers continue to increase output.
However, the wider OPEC+ group’s decision to halt further production increases in the first quarter of next year helped alleviate some of these oversupply worries, according to Haitong Securities.
Meanwhile, Saudi Aramco has announced a reduction in the official selling prices (OSPs) for all grades of crude oil bound for Asia for December loadings.
Specifically, the OSP for the benchmark Arab Light grade into Asia was cut by $1.20 per barrel month-over-month (MoM).
This adjustment places the premium at $1 per barrel over the benchmark, which is its lowest level since January.
Gold claims crucial level
On Thursday, gold prices exceeded the significant $4,000 per ounce threshold.
This movement was driven by concerns about the economic outlook, stemming from a decline in the dollar and the ongoing US government shutdown.
Gold is now less costly for non-dollar holders, as the dollar decreased by 0.2% after reaching a four-month high in the previous session.
In other news, the US Supreme Court expressed reservations on Wednesday regarding the legality of President Donald Trump’s extensive tariffs.
This case carries potential consequences for the global economy.
Additionally, the US labor market showed strength, potentially dampening hopes for interest rate cuts.
The ADP report on Wednesday revealed that US private employers added 42,000 jobs in October, surpassing the Reuters forecast of a 28,000 gain.
The ongoing, record-breaking US government shutdown, caused by a congressional deadlock, is forcing both investors and the Federal Reserve to depend on data from the private sector.
Although the Fed lowered interest rates last week, Chair Jerome Powell indicated that this might be the final reduction for 2025.
Following this, the perceived probability of another Fed rate cut in December has dropped significantly, from over 90% last week to 63% currently, according to CME FedWatch.
“On the positive side, gold has managed to consolidate around $4,000 for around a week now,” said David Morrison, senior market analyst at Trade Nation.
This has helped the daily MACD to pull back to neutral levels, increasing the possibility that prices could make further gains.
At the time of writing, the December gold contract on COMEX was at $4,015.62 per ounce, up 0.6%, while silver was 0.8% at $48.403 an ounce.
Base metals
A retreating dollar against a basket of major currencies supported base metal prices on Thursday.
The three-month copper contract on the London Metal Exchange was at $10,768.20 per ton, up 0.5% from the previous close.
The three-month aluminium contract was up 0.4% at $2,874.70 per ton.
Copper prices initially surged to a record high last week, driven by optimism regarding demand following the US-China trade truce.
However, the subsequent strengthening of the dollar, which reached its highest levels since May, has since put downward pressure on copper prices.
Trade flows are being re-established as the border between Africa’s two largest copper exporters reopens.
This follows disruptions to copper shipments bound for China caused by unrest in Tanzania.
Despite these previous issues, losses are being mitigated by robust Chinese purchasing as consumers replenish inventories in anticipation of increased demand.
Meanwhile, strong demand and tight supplies are keeping aluminium prices near their yearly peaks, driven by a tightening market in China.
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