3 Commodities to watch closely this week

  • This week’s spotlight shines on cocoa, where record-breaking futures prices signal supply shortages due to poor harvests in key producing countries like Ivory Coast and Ghana.
  • European gas futures remain elevated amidst regional tensions following recent attacks, while gold’s trajectory is influenced by the Federal Reserve’s hinted rate cuts, with technical analysis suggesting potential bullish patterns.

Cocoa:  

Cocoa futures hit $9,400 a ton for the first time ever, marking a 45% increase in March. 

Poor harvests in key producing countries such as Ivory Coast and Ghana, where adverse weather conditions, including heavy rains from El Niño and subsequent extreme heat, have led to supply shortages. The Ivory Coast cocoa regulator anticipates a 33% decrease in production, from 600,000 MT to 400,000 MT. 

European Gas:  

European natural gas futures are trading near €29/MWh, maintaining levels last seen in early February following a terrorist attack on a concert hall near Moscow. Additional attacks (related to Russia war on Ukraine and not the terrorist attack) on energy facilities in Russia and Ukraine have further fueled supply concerns.  

However, prices could ease as Europe moves beyond the heating season. 

Gold:  

Last week, the US Federal Reserve maintained its expected 75-basis points reduction in the Fed Fund rate this year, aligning with previous communications. This contributed to gold reaching a new all-time high before a subsequent decline.  

Analysis might suggest a bullish pattern forming, with the possibility of gold surpassing $2,200/oz. and testing the ATH near $2,225/oz., while maintaining support levels around $2,150/oz. 

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