• Supplies rebound from world’s largest coffee producer. 
• Brazilian coffee harvest at least 75% complete

Coffee prices fell on Monday on track for the second straight loss, plumbing four-week lows and moving away from recent record highs amid active profit-taking, and after supplies rebounded from Brazil, the world’s largest producer of coffee. 

Brazilian authorities managed to accelerate the rate of shipments in order to overcome recent problems that led to accumulated inventories and delayed exports, with the harvest season already over 75% completed. 

Prices

Coffee prices fell $3.9 per contract today, about 1.7% to $227.90, the lowest since July 5, with a session-high at $232.50. 

A contract equals 100 pounds, with the pound price estimated at $2.279 currently. 

Coffee prices lost 0.9% on Friday, the third loss in four days as global supplies improved. 

Coffee prices lost 3.3% last week, the second weekly loss in a row on profit-taking away from a record high of $255.05 per contract. 

Supply Rebound

The current drop in coffee prices came amid aggressive short-term profit-taking, while shipping rates have clearly improved from Brazilian ports amid increasing efforts from Brazilian authorities to overcome the problems facing supplies.

Harvest Season 

As the harvest season accelerates in Brazil, it puts pressure on coffee prices, with data showing that 75% of the total coffee harvest finished as of July 16 in Brazil.

That’s remarkably faster than the previous harvest year, which finished 66% of the total harvest at the same time last year. 

Brazilian Coffee output 

Despite all this, several analysts reduced the outlook for Brazilian coffee output in 2024-2025 to 66 million bags, down from 70.4 million bags in previous forecasts, due to higher temperatures and drought. 

Drought 

Brazilian weather agencies showed that several major coffee production regions failed to get any rain last week, especially the Minas Gerais region. 

• World’s most valuable cryptocurrency hits seven-week high
• Trump pledges to make America the world’s crypto capital

Bitcoin rose on Monday above $70,000 per bitcoin, extending gains for the second day and scaling a seven-week high after positive remarks by Republican candidate for the US presidency, Donald Trump, at the Bitcoin Conference in Nashville. 

Trump expressed his strong support for the crypto sphere and pledged to make America the world’s crypto capital.

Prices 

Bitcoin rose 2.6% at Bitstamp today to $70,016, the highest since June 10, with a session-low at $68,165. 

Bitcoin also rose 0.5% on Sunday, the third profit in four sessions amid a strong sentiment. 

Bitcoin marked a 0.25% profit last week, the third weekly profit in a row. 

Crypto Market Value 

The market value of cryptocurrencies rose by $65 billion on Monday to $2.597 trillion as both bitcoin and ethereum surged. 

Trump

Donald Trump expressed his strong support for bitcoin and the crypto industry during his speech at the Bitcoin Conference last week. 

He warned that if the US failed to adopt cryptocurrencies and blockchains, China will adopt them, and he added that Washington shouldn’t allow Beijing to dominate the industry. 

He wants the US to be the world first in technology, science, manufacturing, AI, and the space industry, among other major sectors, with crypto playing a pivotal role. 

Trump noted that nearly 175 million people are interested in bitcoin and cryptocurrencies, and he criticized current president Joe Biden for his crypto regulations. 

He vowed to appoint a special crypto presidential counselor once elected, and he believes that bitcoin doesn’t represent a threat to the dollar of any kind. 

• Markets await Fed’s meeting results
• Hopes for improving demand in India, the world’s second largest consumer 

Gold prices rose in European trade on Monday for the second straight session, trading above the psychological level of $2400 once more as US 10-year treasury yields dropped. 

Now traders await the Federal Reserve’s policy meeting this week, expected to provide important clues on the path ahead for US interest rates.

Gold prices are boosted by hopes of increasing Indian demand after the government reduced customs on gold and silver prices last week.

Prices 

Gold prices rose 0.7% today to $2403 an ounce, with a session-low at $2386.

On Friday, gold prices rose 0.95%, the first profit in three days away from two-week lows at $2353, as yen’s surge waned. 

Prices marked a 1.4% weekly loss last week, the first such weekly loss in five on profit-taking away from a record high at $2483. 

US Yields 

US 10-year treasury yields fell 0.75% on Monday, on track for the third loss in a row, plumbing two-week lows at 4.163%, boosting non-yielding assets.

A string of weak US data last week boosted the odds of Fed rate cuts in September and November to 100%. 

Fed Meeting

The Federal Reserve is convening this week to decide on policies, with analysts expecting no changes to interest rates at 5.5%.

The monetary policy statement, and Fed Chair Jerome Powell’s subsequent press conference will likely provide clues on the future of US interest rates.

Indian Demand 

The Indian government reduced import customs on silver and gold from 15% to 6% last week, which is expected to boost actual demand and jewelry making in the world’s second largest consumer of gold. 

The SPDR 

Gold holdings at the SPDR Gold Trust fell 2.02 tonnes on Friday to a total of 843.17 tonnes away from 845.19 tonnes, the highest since February 6. 

• Gauging inflationary pressures on ECB
• Less than a 50% chance of an ECB September rate cut

Euro rose in European trade on Monday on track for the third straight profit against the dollar on hopes that the interest rate gap between Euro zone and the US will shrink in September. 

The odds of an ECB interest rate cut in September is still less than 50%, with investors now awaiting major Euro zone inflation data for July later this week, which would provide important clues on the path ahead for monetary policies. 

The Price 

The EUR/USD rose 0.15% to $1.0870, with a session-low at $1.0848 .

The pair rose 0.1% on Friday, the second profit in a row away from a two-week trough at $1.0826. 

The pair lost 0.25% last week, the second weekly loss in a row amid risk aversion and after weak European data.

European Rates

There’s a less than 50% chance of a 0.25% European Central Bank rate cut in September as investors await more data to shine light on growth and inflation in the euro zone.

European Inflation 

Investors await important consumer prices data for Germany and the whole euro zone in the next few days.

The days will showcase the level of inflationary pressures on the ECB and will help determine the next policy decisions. 

US Rates

Recent weak US data boosted the odds of Federal Reserve interest rate cuts in September and November to 100%.

Rate Gap

The Eurozone/US interest rate gap is still hovering at 125 basis points in favor of the US, and will likely shrink to 100 basis points in September.