According to the Mercantile Exchange of Vietnam (MXV), by the close of trading on September 5, the MXV-Index rose 0.35% to 2,097 points, ending a four-session losing streak. Green dominated the global commodity price board, although investment flows remained cautious. Notably, several key items in the industrial and metal sectors rebounded strongly after a previous downturn.

Precious Metals Market Sees Resurgence

As of the close of trading on September 5, precious metals showed signs of recovery. Silver prices rose for the second consecutive session, increasing 1.9% to $29.09 per ounce. Platinum also rebounded after three consecutive declining sessions, closing at $930.3 per ounce, up 2.42%. Precious metals continued to benefit from weak US employment data, reinforcing the likelihood of a Federal Reserve (FED) rate cut.

According to ADP's employment report, the US added only 99,000 non-farm jobs in the private sector in August, 45,000 less than forecasted and the lowest since January 2021. July's figure was also revised down to 111,000 jobs, instead of the previously reported 122,000. This data indicates a weakening US labor market. The US Department of Labor had also reported a sharp drop in new jobs in July, marking the lowest level in three and a half years.

These signs are increasing the likelihood that the FED will cut interest rates in its upcoming meeting, as it aims not only to control inflation but also to stabilize the labor market. As a result, both the USD and yields dropped sharply yesterday, benefiting precious metals.

For base metals, macroeconomic factors also helped COMEX copper prices rebound. By the close, copper prices rose 1.43% to $9,121 per ton.

Conversely, iron ore prices extended their decline for the fifth consecutive session, dropping 1.63% to $91.02 per ton, the lowest level in over a year. Iron ore prices have weakened quickly after a recent recovery due to weak economic data from China, dimming consumption prospects.

In a weak economic outlook, banks and institutions have continuously downgraded China's economic growth forecasts. Recently, Bank of America lowered its GDP growth forecast for China to 4.8% from 5%, while Canadian investment bank TD Securities cut its forecast to 4.7% from 5.1%. These moves follow UBS and JP Morgan, which reduced their forecasts to 4.6% last week.

Arabica Coffee Prices Rise Slightly, Supply Shortages Persist

According to MXV, at the close of yesterday's trading session, prices of the two coffee commodities saw little change compared to previous levels. Arabica prices edged up by 0.2%, while Robusta prices slightly decreased to $4,911 per ton. Market fundamentals remained unchanged, with attention focused on supply shortages in Vietnam and prolonged drought in Brazil's main coffee-producing regions.

Several businesses report that coffee trading activities in Vietnam, the world's largest Robusta coffee producer and exporter, remain subdued as both buyers and sellers wait for the next harvest season, starting in November. Currently, domestic supply is scarce, and export activities remain sluggish.

In Brazil, prolonged drought in the Southeast, the country’s largest coffee-producing region, raises concerns that the next crop (2025-2026) could see a production decline of up to 20%.

Elsewhere, the Dollar Index fell 0.25% yesterday, while the strengthening of the Brazilian Real caused the USD/BRL exchange rate to drop by more than 1%. The narrowing of the exchange rate has fueled farmers' reluctance to sell their coffee, further supporting prices.

Domestically, coffee prices in the Central Highlands and southern provinces remained unchanged this morning (September 6), ranging from 119,400 to 120,500 VND/kg. According to the Ministry of Agriculture and Rural Development, Vietnam's coffee export prices have hit record highs recently due to supply shortages both domestically and globally.

Driving the price trend of industrial raw materials yesterday was cocoa, which surged by 4% after two consecutive declining sessions. The market faces supply shortages in the 2023-2024 crop, but the outlook for improved supply could limit further price increases. Companies estimate that supply will be abundant in the first three months of the 2024-2025 crop season.

Sugar 11 prices saw little change, ending at 19.22 cents per pound. The market remains focused on supply conditions and drought in Brazil's South-Central region.

Soucre: MXV