Gold Surges to Record Highs Amid Federal Reserve Independence Concerns

Gold prices soared to new record highs as President Trump’s threats to fire US Federal Reserve Chair Jerome Powell led to a flight to safe-haven assets. The spot gold settled over 2.9% higher yesterday and continued to rise in early morning trading, briefly breaking above US$3,440/oz.

Trump’s pressure on Powell to ease monetary policy has raised worries about Fed independence, leading to a surge in exchange-traded fund (ETF) holdings in gold. Spot gold is up more than 30% this year, making it the best-performing commodity. Meanwhile, COMEX gold inventories have been declining, reaching just under 43.1moz.

Oil Faces Pressure Amid Risk-Off Sentiment

However, oil prices were unable to escape the broader risk-off sentiment in the market. ICE oil settled 2.5% lower due to factors such as demand concerns, tariff uncertainty, and progress in US-Iran nuclear talks. Despite this, the prompt timespread has strengthened, indicating a relatively tight spot market.

While there is a surplus in the oil market for the final quarter of the year, the forward curve remains in contango from early next year. Market sentiment remains negative as speculators have been selling off positions, leaving them with the smallest net long position since October.

US Crop Plantings Accelerate

The USDA’s latest report shows that US corn and soybean plantings are progressing well. Corn plantings are at 12% complete, up from last year and above the five-year average. Soybean plantings are also ahead of last year and the average. However, the condition of the winter wheat crop has deteriorated over the last week.

Overall, the commodities market is experiencing significant movements due to geopolitical and economic factors. Investors should stay informed and consider diversifying their portfolios to mitigate risks and take advantage of potential opportunities.