Geopolitical concerns continued to be the main driver of commodities prices this week. In particular, fears that US sanctions could be broadened to include Russian producer, Nornickel, buoyed the prices of nickel and palladium. Oil was also up strongly as some OPEC members hinted that they would be happy with oil prices as high $100pb.
Next week is looking relatively quiet in terms of data releases. We expect GDP data for the US to show that economic growth slowed in the first quarter, albeit to a still reasonably healthy 2.3% annualised. Markets will also continue to monitor closely developments in relations between the US and Russia. Any signs of deterioration are likely to boost demand for gold and other safe-haven assets. That said, tensions appear to have already come off the boil as President Trump has backtracked on his decision to impose additional sanctions on Russia and pledged to maintain a “good relationship” with the country.
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