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Inflation Worries Intensify, Crude Oil and Natural Gas Continue to Soar

Summary

On Tuesday (October 5), the U.S. dollar index rose slightly, and the 10-year U.S. Treasury yield rose by 5 basis points to 1.53%. Due to rising energy prices and increasing inflation concerns, rising commodity prices drove oil-related currencies to strengthen. Traders are here. Be cautious before releasing the key employment report over the weekend, which may provide clues for the Fed's next move. The rise in U.S. bond yields and the strengthening of the U.S. dollar caused gold to fall for the first time in four trading days. U.S. oil is approaching the $80 mark, the highest closing price since the end of October 2014. Affected by the global supply shortage before the winter heating season, NYMEX November natural gas futures rose 9.5% to close at $6.312 per million British thermal units, which was nearly 12 The highest level in the past year.

Spot gold fell 1.2% to US$1,748.65 per ounce on Tuesday, and rebounded to near the 1760 mark in late trading. U.S. Treasury yields and the rise in the US dollar weakened the attractiveness of safe-haven gold. Investors waited for the key to be announced later this week. U.S. non-agricultural employment data.


David Meger, director of metal trading at High Ridge Futures, said that the US dollar and US bond yields have risen after a slight correction in the past few days, and the stock market rebounded, which is driving down gold prices. The dollar is close to the one-year high it hit last week, making gold more expensive for holders of other currencies. Investors are still weighing the impact of high inflation on gold prices. Aakash Doshi, head of Citi’s commodity research, wrote in a report that we agree with gold bulls’ statements about the persistence of inflation--especially this winter because energy prices may rise. But in the end, this may push up the bottom of the gold price, rather than supporting the continued bull market upward cycle.


U.S. oil prices continued to rise from a seven-year high on Tuesday. U.S. oil once rose more than 2% to $79.48 per barrel, approaching the critical psychological threshold of $80 per barrel. The day before OPEC+ decided to maintain its supply agreement, although soaring energy prices have triggered concerns that more petroleum products will be used for power generation. At the OPEC+ meeting on Monday, Saudi Arabia and its partners chose to moderately increase production by 400,000 barrels per day in November.


U.S. natural gas futures prices jumped to a 12-year high as global supply shortages intensified market concerns about insufficient supply in the U.S. before the winter in the northern hemisphere. Phil Flynn, a senior market analyst at Price Futures Group Inc., said that there is no room for error in the system and that if there is a cold winter, prices may rise sharply. Goldman Sachs Group predicts that due to high natural gas prices, power generation this winter may lead to an additional 650,000 barrels of crude oil demand per day.


Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.


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