Commodity Wrap: Gold will peak in three years in late 2023, while oil will have its first yearly fall in two years

 Commodity Wrap: Gold will peak in three years in late 2023, while oil will have its first yearly fall in two years

Commodity Wrap: Gold will peak in three years in late 2023, while oil will have its first yearly fall in two years

On December 29, U.S. West Texas Intermediate oil futures were up 11 cents at $71.88 a barrel, while Brent crude futures were up 18 cents, or 0.2 percent, at $77.33 a barrel.

Both WTI and Brent oil futures are expected to close the year at their lowest points since 2020 at their present prices.

By the end of 2023, oil prices should have dropped by almost 10%, marking the first yearly decrease in the previous two years. The downward trend is caused by a number of variables, such as production reductions, geopolitical concerns, and international efforts to control inflation.

Analysts claim that these elements have played a major role in the year-long volatility of oil prices, which has impacted the overall trend and consequent yearly fall.

On December 29, oil prices began to level out after plunging 3% the day before as more shipping firms were ready to start using the Red Sea route again.

On December 29, Brent oil futures increased by 18 cents, or 0.2 percent, to $77.33 per barrel, while in early Asian trading, U.S. West Texas Intermediate (WTI) crude futures increased by 11 cents to trade at $71.88 per barrel. Had been.

Both WTI and Brent oil futures are expected to close the year at their lowest points since 2020 at their present prices. The Covid-19 epidemic peaked around this time in 2020, which significantly reduced the world's oil consumption. It has caused a sharp decline in pricing.

The third straight month of declining oil prices is expected to be caused mostly by rising concerns about declining demand, which will be surpassed by worries about possible supply interruptions resulting from Middle East hostilities. The effect of production cutbacks has not been enough to maintain prices despite persistent geopolitical uncertainties, resulting in a roughly 20 percent decrease from the year's top.

On expectations of a potential US interest rate drop, gold surges.

Gold prices are expected to have their best year in three years at year's end due to growing anticipation of a US interest rate decrease in 2024. The demand for safe-haven assets has grown due to the ongoing crisis in Ukraine and the escalating tensions in the Middle East, which has supported gold's favorable performance throughout the year.

The spot price of gold was up 0.2 percent at $2,069.80 per ounce. Thanks to this performance, the yellow metal has gained 14 percent for the whole year, putting it in track for its biggest annual gain since 2020.