Global Commodities: Increased hope of ceasefire between Ukraine and Russia may reduce demand for safe haven assets

Gold prices slightly declined during a choppy trading session on Monday as indications of progress in peace negotiations for Ukraine reduced the demand for safe-haven assets.

On Monday, US President Donald Trump met with European leaders to discuss security guarantees for Ukraine. He also mentioned having spoken with Russian President Vladimir Putin and was working on arranging a direct meeting between Putin and Ukrainian President Volodymyr Zelenskiy, which could be followed by a potential trilateral summit.

Attention is now turned on the Federal Reserve’s annual Jackson Hole symposium, taking place later this week, where global policymakers will debate labor market trends and the outlook for monetary policy. In addition, investors are looking forward to the release of the July FOMC minutes, which is scheduled for tomorrow.

Crude oil prices ended the session positively during Monday’s low liquidity trading. Investors are keeping an eye on the potential impacts of ongoing discussions regarding the Ukraine-Russia peace deal and how it could affect global oil supply, including possible changes to sanctions or steps toward reconciliation.

Natural gas prices bounced back from the day’s low but ultimately closed with slight losses as ongoing weak fundamentals continued to impact prices. Milder US weather forecasts are limiting anticipated demand for gas in the power sector.

Most base metals fell as the dollar strengthened, with traders processing geopolitical developments and anticipating important comments from Federal Reserve Chair Jerome Powell later this week.

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 Source: HDFC Securities Prime Research