Following Fed Chair Powell's dovish signals at the Jackson Hole symposium, market expectations for a September rate cut warmed, the dollar weakened, and prices for crude oil, gold, and copper all rose on Friday.

Crude Oil: Oil Prices Edge Higher as US Rate Cut Prospects Offset Gloomy Supply Outlook

Oil prices rose on Friday as Fed Chair Jerome Powell's hint of openness to a September rate cut offset an increasingly bearish supply outlook.

WTI crude edged higher, closing above $63 per barrel; Brent crude closed near $68. Powell's highly anticipated remarks were more dovish than some investors had expected.

Oil futures stand to benefit from lower borrowing costs as investors anticipate rate cuts will stimulate economic activity and boost fuel demand. Lower rates also reduce financing and storage costs.

However, gains were capped by expectations that the global market will face a surplus after the peak summer demand period ends. Year-to-date, oil prices have fallen more than 10% amid concerns that US tariff hikes will hurt economic growth, coinciding with OPEC+ members restoring some idle capacity.

On the geopolitical front, there were few signs of progress towards a peace deal to end the Russia-Ukraine conflict, with Ukrainian President Zelenskyy stating he had no contact with Russia regarding possible negotiations.

October WTI crude rose 0.2% to settle at $63.66 a barrel.

October Brent crude rose 0.1% to $67.73 a barrel.

Precious Metals: Powell's Speech Drives Gold Higher

Gold prices rose on Friday, benefiting from a sharp drop in the dollar and bond yields after Fed Chair Powell cautiously opened the door for a September rate cut.
Traders increased bets on rate cuts in September and within the year, and lower interest rates typically benefit gold prices.

"With expectations for rate cuts firming, gold looks set to retest its record high, and Powell’s speech has been the missing catalyst for gold to stage a rally similar to the one we saw earlier this year," said Ewa Manthey, commodities strategist at ING.

Spot gold was up 0.94% at $3,370.13 per ounce at 3:18 PM ET.

Base Metals: Rate Cut Expectations Lift Copper Prices

Copper prices rose as the dollar weakened after Fed Chair Powell signaled a potential rate cut next month.

"As we consider future policy changes, the stability of the unemployment rate and other labor market indicators allows us to proceed carefully," Powell noted in his prepared remarks for Friday's annual conference in Jackson Hole, Wyoming. "Nevertheless, with policy in restrictive territory, changes in the baseline outlook and the balance of risks could make it appropriate to adjust our policy stance."

Powell's comments triggered a significant drop in the dollar, lifting dollar-priced metal prices. His stance signaled a shift in focus towards labor market risks, suggesting the Fed might not wait for perfect inflation data before cutting rates.

Meanwhile, Chile's Codelco lowered its production guidance, as a fatal accident at its largest mine hampered efforts to counter the effects of deteriorating ore grades.