Market Update
Gold:
Today, gold reached a new high, touching $3,081. According to our strategist, this move is driven by a combination of political factors, trade tariffs, and concerns over inflation.
The ongoing geopolitical tensions and uncertainty surrounding global trade policies have increased demand for safe-haven assets, with gold benefiting as investors seek stability amidst market volatility.
Our firm remains vigilant about economic stability, as the current macroeconomic landscape presents both opportunities and risks.
Inflationary pressures, fueled by rising energy costs and government spending, continue to play a significant role in shaping investor sentiment.
Additionally, the weakening of the US Dollar has added further bullish momentum to gold, as a softer dollar makes commodities like gold more attractive to foreign investors.
The persistence of these conditions could push gold prices even higher.
However, despite this positive momentum, Stipelis would be hesitant to allocate additional capital to the metal at this moment, given its recent rapid appreciation.
Historically, sharp rallies in gold are often followed by a period of consolidation or retracement.
Therefore, our analysts suggest that a cooling-off phase may be necessary before the next potential leg up.
While gold remains a crucial asset in portfolio diversification, we advocate for a measured approach before considering fresh allocations.
Wheat:
In contrast to gold’s bullish momentum, wheat has hit a new two-week low, trading at $529.50.
This price decline is largely attributed to favorable weather conditions in key Black Sea growing regions.
Additionally, agreements between Russia and Ukraine ensuring safe passage for grain exports through the Black Sea have alleviated supply concerns, which are bearish for wheat prices.
The Black Sea region is a crucial player in global wheat production, with combined exports from Russia and Ukraine accounting for over 7% of total global wheat production.
This figure is approximately three times higher than the volume of wheat exported by the United States, according to a 2022 CME report.
Given this dominance, any developments in the Black Sea region will have significant implications for global wheat prices
As market participants adjust to these supply-side improvements, wheat prices are likely to remain under pressure in the short term.
Given the current trend, Stipelis maintains a cautious stance on wheat prices with downside support at 505 and 475 and upside resistance at 575 and 600 per bushel.
Final Thoughts:
Today’s commodity movements highlight the contrasting forces at play in the global markets.
Gold continues to rally on economic uncertainty and a weaker dollar, while wheat faces headwinds from favorable weather and improved Black Sea trade conditions.
Traders and investors should remain agile, staying informed on macroeconomic shifts and geopolitical developments to navigate the evolving landscape effectively.
Stephen coleman 3-27-2025