Copper prices edged up while gold held steady ahead of the U.S. jobs report.
Commonwealth Bank of Australia expects the labor market to cool, forecasting 150,000 jobs to be added to the economy and unemployment rate of 4%, compared to the consensus of 183,000 and 3.9% respectively.
A softer than expected report would likely cement expectations for the Fed to cut rates in the first half of 2024, CBA said.
“The dollar can lift if markets grow more concerned about a U.S. recession and risk sentiment deteriorates,” it added.
Citi predicts the shock to growth from rate increases in developed economies is not yet over, and that this should support precious metals prices, weigh on crude oil and cause head winds for base metals and iron ore.
Citi said it was bullish on gold and silver, “viewing them as safe havens amid an expected developed markets recession and their positive correlation with China’s easing.”
Although, there might be reasons for optimism in industrial commodities until Lunar New Year in February, due to anticipated support from China easing measures, it said.