Gold, Silver Prices Surge as US Markets Close; Oil Rebounds for Second Day
On Monday, influenced by the OPEC+ decision to extend the oil production cut plan until at least the end of September, as well as the prospect of a surge in oil demand due to the US summer driving season, both US and Brent crude oil prices rebounded significantly, with intraday gains exceeding 1%.
At the same time, the Federal Reserve's most closely watched inflation gauge, the Personal Consumption Expenditures (PCE) inflation data, is set to be released on Thursday this week. Economists anticipate that this report is likely to bring some positive signals, indicating that the decline in inflation has not completely stalled. On Monday, both gold and silver prices rebounded, with intraday gains of over 1%.
Oil prices accelerated away from a more than one-week low, with intraday gains reaching up to 1.3%.
After a cumulative decline of over 2.2% last week and hitting a low not seen since February 8, oil prices rebounded significantly at the beginning of this week following the largest single-week drop in four weeks.
International crude oil futures fluctuated several times during Monday's trading, turning positive in the European morning and completely shaking off the downward trend. In the European morning, US WTI crude oil hit a daily low of $77.69, falling by more than 0.03% intraday, while Brent crude hit a daily low of $82.07, falling by about 0.06% intraday. As the European trading session progressed, the gains expanded, and by the US afternoon trading session, US oil had risen to $78.80, with intraday gains of over 1.3%, and Brent crude hit a daily high of $83.20, with intraday gains exceeding 1.3%.
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Ultimately, crude oil achieved two consecutive days of gains. WTI July crude oil futures closed up 1.07%, at $78.55 per barrel, while Brent crude oil eventually rose by 1.2%, at $82.82 per barrel, both detaching from the three-month low set last Thursday.
Analysts point out that despite market uncertainties, the fundamental supply and demand relationship remains a key factor supporting oil prices. The extension of OPEC+'s oil production cut plan and the prospect of a surge in oil demand during the US summer driving season provide certain support for oil prices.
On one hand, the OPEC+ alliance plans to hold a meeting on June 2nd, a day later than originally scheduled, and the market widely expects the oil production cut plan to continue at least until the end of September. Analysts note that the organization's decision to hold the meeting online supports the expectation that oil production cuts will continue.
On the other hand, the market may refocus on demand. With the arrival of the US Memorial Day weekend, the US driving peak season is about to begin, which will help traders observe more information about fuel demand. Moreover, the US Department of Energy reported last Wednesday that gasoline demand reached its highest level since November, providing some support for oil prices. Additionally, according to data from the American Automobile Association, preliminary signs indicate that the number of passengers expected to travel by plane over the Memorial Day weekend this year will reach the highest level in nearly two decades, showing a strong rebound in crude oil demand.
According to UBS Group commodity strategist Giovanni Staunovo, "Record air travel activity and strong gasoline demand should provide some support for oil prices."On the eve of the Fed's PCE data release, gold prices rebounded by 1%.
On Monday, both gold and silver prices rebounded. After a cumulative decline of over 3% last week, marking the largest weekly drop since the week of September 29, the spot gold price recovered on Monday, rising from the lowest level since May 9. During the early trading session of the US stock market, spot gold prices refreshed their daily high to above $2,358 per ounce, with an intraday gain of over 1.0%.
Following a 2.43% decline last week, COMEX July silver futures accelerated their rebound on Monday, with the daily high refreshed to $32.06 per ounce during the US stock market's lunch break, with a gain of over 5.1%. The night session of Shanghai silver saw its gains expand to about 5%, reaching a high of 8,442 yuan.
Last week, due to the Fed's hawkish rhetoric, investors took the opportunity to take profits from the recent high prices of precious metals. On Monday, gold and silver futures rose overall. Some market analysts believe that the recent decline in gold prices is just a short-term correction. They point out that easing inflation expectations, the possibility of the Fed cutting interest rates before the end of the year, and the continued strong demand for gold from central banks are all factors supporting a long-term bullish outlook for gold.
At the same time, the market's focus this week will shift to the US personal consumption expenditure (PCE) inflation data, which is the Fed's preferred measure of inflation. On May 26th, according to media reports citing economists' expectations, the US April core PCE price index, excluding food and energy prices, is expected to rise by 0.2%. This will be the smallest increase in the index this year, and it better reflects the underlying inflation situation. Economists quoted by the media stated:
"The report is likely to bring some positive signals that the decline in inflation has not completely stalled. Against the backdrop of a cooling labor market and slowing income growth, consumer confidence is gradually weakening, which will continue to drive inflation downward for the rest of the year."