Gold future prices remaining stable, NGAS higher amidst expectations of cooler weather, cotton futures recovering their 22-month lows
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Summary:
- On Tuesday, gold prices remained stable.
- US NGAS futures increased on expectations of increasing heating demand as a result of colder than usual temperatures.
- Cotton prices remained almost 50% below their May peak.
Gold trading at highest levels in 3 months
On Tuesday, gold prices remained stable at approximately $1,770 per ounce as traders reevaluated the outlook for US interest rates in the wake of conflicting signals from the Federal Reserve. The Fed still has a lot of work to do in combating inflation, according to Fed officials, who conceded that the central bank may pause the pace of rate rises in the forthcoming sessions. After delivering four consecutive 75 basis point increases, investors are predicting that the Fed would scale back the magnitude of its rate hikes to 50 basis points starting in December. Gold, however, continued to trade at its highest levels in almost three months, largely as a result of recent dollar weakness and a decline in cryptocurrency prices. Although rising interest rates diminish its appeal because the metal does not pay interest, gold has long been seen as a safe-haven asset in times of economic uncertainty.
Gold Dec ‘22 Futures Price Chart
NGAS futures up on cooler temperature prospects
In the third week of November, US natural gas futures increased on expectations of increasing heating demand as a result of colder than usual temperatures. There are indications that the Freeport LNG export plant restart won't happen until December, which would increase the amount of gas available for domestic usage. According to other recent EIA statistics, US utilities added 79 bcf of gas to storage last week, falling short of market forecasts for an increase of 84 bcf and falling short of a gain of 15 bcf during the same week last year.
NGAS Dec ‘22 Futures Price Chart
Cotton recovering from 22-month lows
As dip buyers started to show up, a significant selloff that had driven cotton futures to a nearly 22-month low of 71.6 last month was tempered. Cotton futures are now moving towards the 80 USd/Lb level. Nevertheless, prices remained almost 50% below their May peak, restrained by a stronger currency and persistent worries about demand brought on by the difficult economic climate. According to the most recent estimate from the US Department of Agriculture, both acreage and yield grew, and worldwide cotton production is predicted to reach 118.1 million bales in 2022–2023—an increase of 2% over the previous year. India, Brazil, and China are mostly responsible for the increased output, which counterbalanced decreases from the United States and Pakistan.
Cotton Mar ‘23 Futures Price Chart
Sources: finance.yahoo.com, tradingeconomics.com
