NGAS Prices See Relief, Cotton Prices Drop As Recession Fears Heighten, Gold Prices Drop As Hawkish Central Banks Continue
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Summary:
- Cotton is at its lowest price since last September.
- Rising inventories causing Natural gas to close at its lowest level since mid-March.
- Gold prices falling as central banks continue with aggressive monetary policy tightening.
NGAS prices dropping in the wake of rising inventories
Rising inventories causing Natural gas to close at its lowest level since mid-March. The US domestic market has gained an additional 2 bcf of NGAS per day since the explosion at Freeport LNG, according to the company it is expected to return to partial operational capacity in October. During the week ended 24th June, the extra fuel gave utilities the opportunity to inject 82 bcf into underground storage, according to EIA, which beat the median estimate of 74 bcf.
NGAS Aug ‘22 Futures Price Chart
As major central banks continue with aggressive monetary policy tightening, Gold is falling
Gold prices fell below the $1,800 mark during Tuesday's trading day in the wake of pressures from imminent interest rate hikes by major central banks and a strong US Dollar. The Federal Reserve bank confirmed market expectations for an extended monetary policy tightening path, with some policy makers even advocating for another 75bps hike in July in an attempt to lower consumer prices. Simultaneously, the European Central Bank (ECB) has also pledged to start raising interest rates in July and is expected to bring its deposit interest rate into the positive side during the third quarter. In addition, tighter financial conditions amongst major economies increased fears of a global recession, pushing investors towards the safety of the dollar and prompting a broad decline in commodity prices.
Gold Aug ‘22 Futures Price Chart
Cotton prices impacted by slowing economies
Cotton is at its lowest price since last September in the wake of heightened fears of a recession amidst lower demand prospects. The inflation sensitive commodity is due to be negatively impacted by the slowdown of economic activity and consumption As major global central banks are raising rates to fight inflation. In addition, adding to the weighing on the prices is a better crop outlook as favorable weather conditions boosted hopes of good yields in top growing regions.
Cotton Oct ‘22 Futures Price Chart
Sources: finance.yahoo.com, tradingeconomics.com
