Five Key Charts To Watch In Global Commodity Markets This Week

(Bloomberg) -- Americans go to the polls on Tuesday in a presidential election that could influence gold prices and the future path for US renewable investments. And this week gets bookended by US agricultural reports that signal how the world’s wheat supplies are faring.

Here are five notable charts to consider in global commodity markets as the week gets underway.

Gold will continue to rally if Republican presidential candidate Donald Trump wins the White House, but it will retreat if Vice President Kamala Harris takes over, according to a MLIV Pulse survey released last week. Gold is viewed as a Trump trade to hedge against any inflation from his proposed tariffs. The precious metal was also picked as the best haven play in case of a Trump win in an earlier Pulse survey. Respondents said Harris would put pressure on gold prices, with other survey results suggesting the Democrat candidate is seen as less inflationary.

American drivers are enjoying the cheapest seasonal fuel prices in years, with average retail gasoline prices going for just above $3 a gallon across the nation in October. That’s offering relief to consumers who just two years ago were paying record-high prices above $5. Pump prices — a key data point consumers use to gauge inflation — have notably been tumbling in swing states including Arizona and Michigan. The trend gives Democrats some last-minute reprieve by blunting Republican criticisms of high living costs under the Biden administration as voters head to the polls.

The US election is bringing uncertainty to the legacy of the Democrats’ signature climate law, with Trump vowing to rescind unspent funding from the Inflation Reduction Act. Yet, Republican states and districts — and swing states Republicans hope to win — have disproportionately benefited from clean-technology investments drawn by the IRA. BloombergNEF estimates that more than 86% of the roughly $114 billion in factory investments tied to renewables or electric vehicles has gone to Republican-leaning or swing states.

A natural gas trade known as the widowmaker due to its volatility is in focus as unseasonably warm weather in the US reduces demand for the heating and power plant fuel. The spread between March and April futures — essentially a bet on how tight supplies will be at the end of the North American winter — are edging closer to negative territory. If the trend continues, it could be the earliest dip below zero in the season on a closing basis since November 2009. If traders drove March futures below gas for delivery the following month, it indicates they expect ample end-of-winter supplies as a mild season could reduce consumption.

Wheat will be in the spotlight this week, with two key reports shedding light on the world’s supply of the key cereal crop. The US Department of Agriculture’s Monday crop progress report includes an update on conditions of US wheat, which is off to an historically bad start due to drought. Then on Friday, the agency will estimate global grain supply and demand amid concerns that top exporter Russia will ship less wheat.