Base metals were mixed while gold edged higher as traders waited for Friday’s nonfarm payroll report to gauge which way Fed policy will move this year.
“Investors are questioning if the Fed will cut interest rates six times in 2024 if the economy is heading for a soft landing, i.e., maybe five cuts is more realistic,” Peak Trading Research said.
“This slightly hawkish shift in Fed expectations has supported the dollar this week, a bearish headwind for our dollar-denominated commodity markets,” Peak added.
Wilson Asset Management Leaders said too much lithium supply may be cause for concern.
“We did buy into the lithium space,” it said, but added that the fund has been selling some of its lithium stock holdings.
“There’s a huge amount of supply out there,” it said, adding that WAM Leaders is a “little bit cautious on lithium.”
Iron-ore prices are now likely to average $150/ton over the next three months, Citi said, representing an upgrade on its previous forecast of $140/ton.
China is likely to step up targeted support for specific areas of the real-estate sector, which would be supportive of steel and iron ore demand, Citi added.