The fundamental landscape remains broadly supportive for commodity prices possibly heading higher for the rest of the month.
On the economic data front, US releases show New Home Sales hit a nine-month high at 321K in January while a revision of February’s University of Michigan consumer confidence gauge sees sentiment upgraded from the preliminary reading reported 2 weeks ago. Needless to say, signs of firming recovery in the world’s largest economy are directly beneficial for cycle – sensitive copper prices.
Supportive US data also offers a boost to gold and silver prices. On one hand, a pickup in growth against a backdrop of ultra – loose monetary policy stokes medium – term inflation expectations, boosting store – of – value demand for precious metals. On the other hand, a pick-up in risk appetite weighs on the safe-haven US Dollar, offering both metals a de-facto lift.
As for crude oil, while a risk-on environment is generally supportive, geopolitical considerations remain of primary near-term significance. The WTI contract has benefited from a swelling geopolitical risk premium as Iran-linked supply disruption jitters multiply, riding them to a nine-month high on Friday. Some profit taking could cause a short-term pullback and that could be seen as a buying opportunity for any Bulls or other traders who missed the opportunity to trade the breakout.