Silver Moved Above $24 On China Demand Hopes

Key Insights

• WTI oil settled above the $80 level as China relaxed its coronavirus-related restrictions. 
• The news from China have also provided material support to precious metals. 
• Winter weather hit natural gas production, which was bullish for natural gas prices. 

WTI Oil Gains Ground As Traders Bet On Rising Demand From China

WTI oil moved above the $80 level, supported by multiple positive catalysts. China dropped quarantine requirements for visitors arriving into the country, which will increase air travel. In the U.S., oil production is set to decline as the country is hit by the extreme winter weather.

In addition, traders remain worried that Russia will cut oil exports in January as a response to the oil price cap scheme. In the longer term, the potential strong rebound of China’s oil demand will likely serve as the main catalyst for oil markets.

Natural Gas Moved Higher As Production Declined

Natural gas is trading near the $5.15 level as production was also hit by winter weather. However, it remains to be seen whether the rebound will be sustainable as weather forecasts indicate that weather will be warm from December 28 to January 7.

In fact, the weather may be the warmest in the last fourty years, leading to very low demand for natural gas. In this light, natural gas markets may soon move back below the $5.00 level.

Silver Climbed Above The $24.00 Level

Silver moved back above the $24.00 level as traders focused on the relaxation of coronavirus-related restrictions in China. The developments in China may serve as a leading catalyst for silver in 2023.

Gold has also moved higher despite higher Treasury yields. The pullback in the U.S. dollar provided some support to gold, although it looks that rising demand for precious metals was the key catalyst for gold markets.

Meanwhile, platinum pulled back towards $1020 after an unsuccessful attempt to settle above $1040, while palladium rallied above the $1800 level.

Copper Rallies As Traders Focus On News From China

Copper  rallied towards the $3.90 level as traders reacted to the news from China. The country is the world’s main consumer of copper, so the dynamics of the Chinese economy will stay the key catalyst for copper markets in the foreseeable future.

For a look at all of today’s economic events, check out our economic calendar.