Nickel prices rallied on Wednesday as the dollar lost ground against most major rivals, while analysts assess the state of supplies.

A delay in the release of smelters data stoked concerns of tightened supplies, which underpinned prices in recent months. 

Nickel is mainly used in stainless steel production and EV batteries, and has long suffered from an oversupply status, but officials at Vale expect the market to swing to deficits by 2028. 

Fed Chair Jerome Powell said in a San Francisco conference that policymakers shouldn’t rush into interest rate cuts, especially as the US economic performance proves resilient, while inflation remains above 2%.

San Francisco Fed President Mary Dale, and Cleveland Fed President Loretta Mister, both said that the Fed will likely cut interest rates three times this year.

Later this week, the US government will report the crucial payrolls report for March. 

Otherwise, the dollar index fell 0.5% to 104.3 as of 16:00 GMT, with a session-high at 104.8, and a low at 104.2.

On trading, nickel spot prices rose 2.7% as of 16:12 GMT to $16.9 thousand a tonne. 

Global oil prices rose in European trade on Wednesday on track for the fifth profit in a row, scaling a six-week high as Brent approaches $90 due to concerns about global supply disruptions.

The OPEC+ technical meeting wrapped up today without changes in production policies, with traders now awaiting official US inventory data from the EIA later today, after initial data showed a larger than expected drawdown.

Prices 

US crude rose 0.85% to $86.06 a barrel, the highest since October 2023, while Brent rose 0.8% to $89.84 a barrel, the highest since October 2023 as well. 

US crude rose 1.75% on Tuesday, while Brent added 1.8%, the fourth profit in a row amid growing geopolitical concerns. 

Global Supplies

Ukraine continued its drone attacks against Russian energy infrastructure, after hitting Russia’s third largest oil refinery this week.

Iran on the other hand vowed to respond to Israel after accusing it of launching airstrikes against its consulate in Damascus, killing seven Iranian officials. 

The increasing tensions between Israel and Iran have stoked concerns once more about a potential widespread conflict in the Middle East that could disrupt supplies.

US Stocks

Initial data from the American Petroleum Institute showed US crude stocks fell by 2.3 million barrels in the week ending March 29, passing estimates of 0.5 million drop. 

It’s the third weekly drop in a month, which is a positive sign for demand in the US.

Now traders await official EIA data today, expected to show an inventory drawdown of 0.3 million barrels. 

Oil Supply Deficit Projections 

Bank of America is projecting a global oil supply deficit of 450 thousand bpd in the second and third quarters as global GDP growth rebounds. 

Silver prices rallied in European trade on Tuesday to a two-year high, extending gains for the fifth straight session and trading above $26 for the first time since 2022 on strong retail demand. 

Retailers have recently noticed that silver isn’t moving in tandem with gold, which recently hit record highs at $2200 last week, in turn triggering a late boom in silver prices. 

Prices

Silver prices rose 1.6% to $26.55 an ounce, the highest since March 2022, after rallying 4.2% on Tuesday, the fourth profit in a row, and the largest in 2024. 

The gains come in tandem with a surge in gold prices and strong haven demand. 

Retailers 

As retailers seek assets to guard against potential risks as global central banks change their policies to a more accommodative direction, it’s clear that silver is becoming an excellent under-valued choice. 

The recent silver surge tipped off many retailers that silver remains far from its true value compared to gold, which is trading at record highs. 

Gold hit a record high of $2288 an ounce on April 3, while silver is very far away from its record high of $49.78 scaled in April 2011, in turn triggering strong demand on the white silver for its potential hidden value.  

Historically, silver had usually taken widen movement arcs upside and down compared to gold, however recent times were an exception, with retailers now paying more attention to the missing silver value. 

Silver Forecasts 

The Silver Institute expects 2024 to be an excellent year for the white metal, with prices potentially hitting 10-year highs.

The Institute expected total global demand to reach 1.2 billion ounces in 2024, the second highest on record. 

Gold prices fell in European trade on Wednesday for the first time in seven days away from recent record highs amid active profit-taking, while investors hold off major positions ahead of the Fed Chair Jerome Powell’s speech about the future of US interest rates.

Bearish remarks will boost the odds of a June Fed interest rate cut, in turn sending gold prices towards fresh record highs.

Prices 

Gold prices fell 0.5% to $2270 an ounce, with a record high at $2288, after gold prices rallied by 1.3% on Tuesday, the sixth profit in a row amid concerns about inflation and geopolitical tensions.

The gains are also boosted by somewhat bearish remarks by several Fed officials on the future of US interest rates.

Powell 

Fed Chair Jerome Powell is speaking at Stanford University later today, expected to reveal new clues on the future of US policies. 

Bearish Fed Remarks

San Francisco Fed President Mary Dale, and Cleveland Fed President Loretta Mister, both said that the Fed will likely cut interest rates three times this year.

US Rates

Following their remarks, the odds of a June Fed interest rate cut rallied from 57% to 63%. 

Now investors await important US data later today on private sector employment and the services sector in March. 

Gold Performance Projections

JPMorgan's analysts foresee gold prices hitting $2500 an ounce this year.

Goldman Sachs' analysts project a minimum price target of $2300 an ounce for this year, anticipating policy easing by the Federal Reserve.

The SPDR

Gold holdings at the SPDR Gold Trust rose 2.02 tonnes yesterday to a total of 829 tonnes, away from recent March 13 lows.