Commodity Traders Brace for U.S. Consumer Inflation Data

The weaker U.S. Dollar helped boost copper prices early in the session, but the market succumbed to heavy selling in Asia, leading to a lower close.

May Comex High Grade Copper futures settled at $3.1240, down $0.120 or -0.38%.

Reuters is reporting that Chinese brokerages Yongan futures and Gelin Dahua slashed their long positions on the Shanghai Futures Exchange (ShFE) May and June copper contracts, respectively, over the past two trading days, ShFE data show.

Buyers were also tentative due to possible retaliation against President Trump’s tariffs on steel and aluminum. Position-squaring ahead of Tuesday’s U.S. consumer inflation report also led to investor liquidation. This results of this report could have an impact on Fed policy and the U.S. Dollar. Copper prices could retreat further, for instance, if better-than-inflation data drives up demand for the dollar.

Gold

Gold prices continued to feel the impact of Friday’s stronger-than-expected U.S. Non-Farm Payrolls report, finishing lower for the session on Monday.

April Comex Gold futures settled at $1320.80, down $3.20 or -0.24%.

Despite a lower U.S. Dollar, gold buyers were scarce. Some traders showed sensitivity to the jobs data which likely means the Fed will raise interest rates at next week’s meeting and as many as two more times later in the year. Others sat on the sidelines ahead of Tuesday’s U.S. consumer inflation report that could have a major impact on Fed policy, Treasury yields, the U.S. Dollar and gold prices.

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures finished lower on Monday on renewed concerns over rising U.S. production and tight OPEC supply. Additionally, new government data showed speculators cut bets on oil, suggesting more selling could be seen over the near-term.

May WTI Crude Oil settled at $61.33, down $0.59 or -0.95% and June Brent Crude Oil finished the session at $64.79, down $0.48 or -0.74%.

In other news, on Sunday, Iranian oil minister Bijan Zanganeh said OPEC could agree in June to begin easing current production curbs in 2019, the Wall Street Journal reported.

Also on Sunday, Saudi officials said they would be delaying the initial public offering of Saudi Aramco until 2019.

Natural Gas

Natural gas futures closed higher on Monday, underpinned by new medium-range forecasts that pointed towards lingering cold temperatures that could extend winter demand for the heating fuel. The futures markets were essentially supported by strengthening spot markets in the Northeast and Mid-Atlantic which were boosted by yet another East Coast storm.

May Natural Gas futures settled at $2.800, up $0.41 or +1.49%.