Palladium prices barely move despite Chinese stimulus measures
Palladium prices barely rose on Friday as the dollar lost ground against most major rivals, following fresh Chinese stimulus measures after the People's Bank of China cut reserve requirements for local banks to boost the economy.
Such a step did help to improve the prices of many metals and commodities, with traders now awaiting crucial Chinese industrial production and retail sales data later.
Continuous concerns about supply shortages, and expectations that the Federal Reserve will maintain interest rates unchanged helped boost oil prices in particular this week.
Higher interest rates raise costs of borrowing for consumers and corporations and weigh on growth and metals demand.
Otherwise, the dollar index fell 0.1% as of 15:51 GMT to 105.2, with a session-high at 105.4, and a low at 105.08.
Palladium futures due in December rose 0.3% to $1251.5 an ounce as of 15:52 GMT.
Palladium is used extensively in the automotive and electronics industries, with particular use in reducing exhaust fumes.
Oil prices on track for third weekly profit in row
Oil prices fell in European trade for the first session in six days off ten-week highs on active profit-taking.
Oil prices are still heading for the third weekly profit in a row amid expectations of excessive market shortages in the fourth quarter of the year and amid OPEC optimism for global demand.
Prices are also boosted by strong Chinese economic data, which renewed hopes for improving fuel demand, in turn overshadowing concerns about US oversupply as inventory and crude production increase.
Global Prices
US crude fell 1.5% to $89.27 a barrel, with the highest since November 2022 at $91.11 a barrel, while Brent declined 1.25% to $92.70 a barrel, with the highest since November 2022 at $94.58.
US crude rose 2.1% on Thursday, while Brent added 2.0%, the fifth profit in a row amid expectations of excessive shortages in the final quarter of the year.
Weekly Trades
Oil prices are up 2.5% so far this week on track for the third weekly profit in a row.
Shortages
The International Energy Agency said the decision by Saudi Arabia and Russia to cut crude output by 1.3 million bpd until the end of the year will cause shortages in the fourth quarter of the year.
Bank of America analysts believe such cuts will send Brent prices above $100 by the end of the year.
Conversely, OPEC maintained its optimistic outlook for demand growth worldwide this year and next year,while also expecting flexible global economic growth despite higher interest rates.
OPEC specifically expects global demand on crude to rise by 2.25 million bpd in 2024, and to rise by 2.44 million bpd this year.
Chinese Demand
Recent strong Chinese data indicated the economy is likely recovering in the third quarter of the year and exiting the recent struggles.
China's industrial production rose 4.5% in August, beating estimates of 3.9%, while retail sales rose 4.6% in August, beating estimates of 3.0%, as unemployment fell to 5.2%.
In another stimulus step to boost the economy, the People's Bank of China decided to lower the required cash reserves held by banks by 25 basis points to nearly 7.4%.
US Stocks
The Energy Information Administration reported a buildup of 4 million barrels in US crude stocks last week, while analysts expected a 2.2 million barrels drop.
US production also surged by 100 thousand bpd to a total of 12.9 million bpd, the highest since March 2020.
Dollar backs off six-month high on profit-taking
Dollar fell in European trade on Friday against a basket of major rivals off six-month highs, on track for the first loss in four days on profit-taking.
The greenback is still heading for the ninth weekly profit in a row, the longest such streak of weekly gains in nine years following a spate of strong US data.
The Index
The dollar index fell 0.2% to 105.15, with a session-high at 105.41, after closing up 0.55% on Thursday, the third profit in a row, scaling a six-month high at 105.43.
Such showed retail sales rose unexpectedly in August, while producer prices rose past estimates, as unemployment claims were less than expected last week.
Such data revived the possibility of maintaining higher interest rates for an extended duration in 2024 as the inflation continues to be stubborn.
The dollar index is up 0.25% so far this week, on track for the ninth weekly profit in a row, as the US economy proves flexible.
There's still a 40% chance the Federal Reserve will raise interest rates by 25 basis points at the November meeting, in turn boosting the dollar's standing.
Silver climbs over 2% after strong Chinese data
Silver prices rose over 2% in European trade on Friday off four-week lows and on track for the largest profit since late August on active purchases from low levels.
Recent strong Chinese data raised hopes for improving demand on metals and commodities, as authorities continue to take strong measures to support recovery.
Silver Prices Today
Silver prices rose 2.25% to $23.16 an ounce, with a session-low at $22.63, after declining 0.8% on Thursday, the third loss in a row, plumbing a four-week trough at $22.30 an ounce under pressure from dollar and US treasury yields.
Chinese Demand
Recent strong Chinese data indicated the economy is likely recovering in the third quarter of the year and exiting the recent struggles.
China's industrial production rose 4.5% in August, beating estimates of 3.9%, while retail sales rose 4.6% in August, beating estimates of 3.0%, as unemployment fell to 5.2%.
In another stimulus step to boost the economy, the People's Bank of China decided to lower the required cash reserves held by banks by 25 basis points to nearly 7.4%.
Such strong data and monetary decisions will service to boost hopes for improving actual demand on metals, especially industrial metals in the world's largest metals consumer.