Gold Shrugs Off Fed Hike as Oil and Commodities Markets Remain Volatile

The Federal Reserve raised interest rates by 25 basis points, but gold remained muted in response. Oil prices continue to fall, while copper wobbled on tariff delay chatter before bouncing back due to a softer US dollar.

Central banks have increased their gold buying significantly in the June quarter, with 289 tonnes purchased and 89% of surveyed banks planning to continue adding gold to their reserves over the next year.

JPMorgan's commodities team has admitted that they cannot model the endgame for the ongoing conflict, which is causing oil prices to remain high. The team had previously predicted certain red lines being crossed, but these have been exceeded without an exit ramp in sight.

Copper inventories are also a concern, with a cumulative supply deficit projected to open up from 2027 and stretch to 12-13 million tonnes by 2040. This structural hole in the global copper supply chain is not being addressed by discovery rates.