Commodity Roundup: Gold ticks lower, platinum to hit $1,200 by year-end, ANZ says

Gold prices (XAUUSD:CUR) ticked lower on Tuesday, in part due to a stronger U.S. dollar as investors looked ahead to a monetary policy decision from the Federal Reserve, while brokerage ANZ sees platinum moving towards $1,200/oz by the end of the year.

The May consumer price index inflation report due on Wednesday will be the next major data point, along with the Fed concluding their two-day meeting on the same day.

Meanwhile, top gold consumer China is expected to resume its bullion shopping spree once prices ease from the record highs hit in May, while Vietnam is likely to allow companies to import gold for the first time in over a decade, as it aims to bridge the widening gap between local prices and international benchmarks, Reuters reported.

ANZ on Tuesday kept its gold price target unchanged at $2,500/oz by the end of 2024, stating that, while geopolitical and economic growth risks are largely priced-in, the Fed’s decision will move the gold market.

On platinum, the brokerage said, the metal’s price is levelling off after rising to $1,095/oz in mid-May. A spill-over effect from rising gold prices has spurred investor interest in platinum, it added.

“The recent rise in investment demand looks vulnerable to liquidation in the short term. Above-ground stocks are at 3,620koz (47% of annual demand), which is helping the market compensate for any near-term supply shortfall.”

ANZ expects the market deficit to widen from 518koz to above 650koz (8% of annual demand) in 2024, and this undersupplied market backdrop should help improve market sentiment and lift prices towards $1,200/oz by the end of the year.

ANZ analysts further state that sustained mining challenges and slower recycling will keep platinum supply tight in 2024. A protracted downtrend in the prices of platinum group metals is one of the key factors constraining mine and secondary supply, they added.

Meanwhile, in the energy market, oil prices ticked lower as traders awaited key economic data out of the U.S. and China, for more clues on where inflation is headed. Crude oil futures surged Monday in their largest one-day gain since February, lifted by expectations for stronger energy demand.

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