Commodity wrap: gold, silver prices ease on Christmas Eve; oil heads for steepest drop since 2020

Gold prices took a breather on Christmas Eve after rising above the psychologically-crucial level of $4,500 per ounce. 

Silver prices also fell slightly on Wednesday, after having hit a series of record highs in the last few weeks. Prices had breached $72.7055 per ounce for the first time ever earlier in the session. 

Meanwhile, oil prices fell slightly as well after having spent most of the day in the green. Prices were set for their steepest annual decline since 2020. 

Gold and silver prices ease

After hitting a session high above the significant $4,500-an-ounce level, gold prices retreated slightly on Wednesday. 

Similarly, silver and platinum pulled back, trimming some of the gains achieved during their recent record-breaking rally.

At the time of writing, the COMEX gold contract was at $4,497.35 per ounce, down 0.2%, while silver was largely unchanged at $71.188 an ounce. 

Palladium prices plunged more than 8% to trade at $1,787.50 an ounce. 

Gold is currently undergoing chart consolidation and experiencing mild profit-taking, according to Jim Wyckoff, a senior analyst at Kitco Metals, following its recent achievement of record highs.

Historically, gold performs well when interest rates are low and during times of market uncertainty.

The sentiment for lower rates has been echoed by US President Donald Trump, who stated on Tuesday that he desires the next Federal Reserve chair to decrease interest rates, provided markets are performing well. 

The US central bank has already cut rates three times this year, and traders are currently anticipating two further rate cuts in the upcoming year.

Wyckoff added:

The next upside target for gold market is $4,600/oz and for silver is $75/oz by the end of the year. The technicals remain bullish.

Silver prices have dramatically outperformed gold so far this year. 

With a year-to-date surge of 147%, driven by strong fundamentals, silver’s gain is more than double that of bullion, which saw an increase of over 70% during the same period.

Oil prices slip

Oil prices were higher throughout the session on Wednesday before slipping again.  

This upward trend was fueled by strong US economic data and ongoing concerns about potential supply interruptions from Venezuela and Russia. 

Despite this recent rise, however, oil prices are still headed for their sharpest annual decline since 2020.

At the time of writing, the price of West Texas Intermediate crude oil was at $58.37 per barrel, down 0.1%, while Brent was at $62.22 per barrel, down 0.2%. 

Since December 16, when the two contracts dropped to almost five-year lows, they have both seen gains of approximately 6%.

The US economy achieved its fastest growth rate in two years during the third quarter, according to US data, primarily driven by strong consumer spending and a significant recovery in exports.

Despite recent trends, Brent and WTI crude prices are set to record their steepest annual drops since 2020 (when COVID-19 impacted demand), with expected declines of about 16% and 18%, respectively. 

This downturn is primarily driven by forecasts that supply will exceed demand next year.

Vessel movements for Venezuelan oil are stalled, with over a dozen loaded ships awaiting new instructions following the US seizure of the supertanker Skipper and the targeting of two more vessels this past weekend.

Meanwhile, oil flow from Kazakhstan through the Caspian Pipeline Consortium (CPC) is expected to significantly drop in December, by one-third to its lowest level since October 2024. 

This decrease follows a Ukrainian drone attack that damaged key export facilities at the main CPC terminal, according to two market sources on Wednesday.

In the US, crude oil inventories saw a rise of 2.39 million barrels last week.

Gasoline stocks also increased by 1.09 million barrels, and distillate inventories grew by 685,000 barrels, as reported by market sources citing Tuesday’s American Petroleum Institute figures.

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