Commodity Roundup: London gold price hits record high at $2069.40; oil extends fall

Gold prices (XAUUSD:CUR) held steady in thin holiday trading on Thursday after five-consecutive session of gains supported by a fall in the U.S. dollar index (DXY) to a five-month low. Futures now imply an 88% chance of a rate cut as early as March, a huge swing from a month ago when the probability was just 21%. The London’s gold price benchmark hit an all-time high of $2,069.40 per troy ounce at an afternoon auction on Wednesday, the London Bullion Market Association said. Spot gold (XAUUSD:CUR) is up 3% in the past one month and was headed for a 7th consecutive December rally amid expectations of rate cuts. Spot silver (XAGUSD:CUR) up 2% this year.

LBMA’s Ruth Crowell said, “Gold continues to be the safe-haven of choice in periods of uncertainty and high volatility.”

In the energy market, oil prices extended losses, with both benchmarks down 1% as traders monitored developments in the Red Sea, where shippers are returning despite further attacks. WTI’s second-month 25-delta put skew continued to flatten, trading at its least bearish level since mid-November. Distillate cracks remain weak, with ICE gasoil and Nymex heating oil’s premiums over crude both at the smallest since July, Bloomberg News reported.

Among base metals, copper prices ticked lower after hovering around a five-month high earlier in the session. Three-month copper on the London Metal Exchange hit its highest since Aug. 1 at $8,715 in the previous session.

A weaker dollar makes greenback-priced metals cheaper to holders of other currencies. The currency was headed for a yearly decline after two years of strong gains as the market expects the U.S. central bank to cut key policy rates next year. On a yearly basis, LME nickel was headed for its steepest loss since 2008, down 43.7% so far this year, on oversupply pressure, as per report.

Elsewhere among agricultural commodities, corn, soybean and cocoa prices fell, while wheat rose.