EUROPEAN COMMODITIES UPDATE: Bolstered by the risk tone, precious metals benefit despite this but remain in familiar territory

WTI/Brent: +0.5%/+0.4%

• Rallied from the early European morning, got as high as USD 68.31/bbl and USD 70.30/bbl for WTI and Brent. Newsflow at the time was fairly light, price action largely a continuation of Thursday’s upside (spurred by further drone attacks on refineries in the Middle East) and following the general risk tone, which remains underpinned after Thursday’s very strong US session.


• However, this strength has since waned with little in the way of fresh drivers to underpin it. Furthermore, while the trough to peak move today is decent at around USD 1/bbl, current upside is a much more muted c. USD 0.30/bbl, leaving the benchmarks on track to end the week lower by just under USD 1.00/bbl.


• Newflow this morning has been focussed on the latest EU sanctions package. A package which, as expected, includes a new lower Russian oil price cap. The cap will now by dynamic, set USD 15/bbl below market rates (prev. set at USD 60.0/bbl) and begin in the USD 45-50/bbl range as a starting point.


• Note, the EU’s update also includes sanctions on the Nord Stream pipeline; no move in Dutch TTF to the new package, currently marginally firmer on but holding at the low-end of the week’s EUR 34.19/MWh to EUR 36.32/MWh band.


• Ahead, the docket is headlined by Fed’s Waller (see Fixed/FX for more), before a handful of US data points. For the commodity space, we await the response of Russia to the above sanctions package and any further attacks on Iranian refineries. As a reminder, the tally as it stands is that as much as 150k BPD of Iraq production has been taken offline by the drone attacks.

Gold: +0.3%

• Bid after climbing gradually through the latter-half of Thursday’s session despite the strong risk tone. Upside that was potentially driven by the softer yield environment, which in turn was possibly driven by Import Price data and remarks from former Fed official Warsh.


• The metal then picked up a little further overnight to a USD 3350.44/oz peak. Upside that comes in contrast to the mostly firmer APAC risk tone, with China largely shrugging off the latest unfavourable tariff updates. Strength for gold possibly a function of, unsurprisingly, dovish commentary from Fed’s Waller (Voter) who made the case for a July cut and then a data-driven meeting-by-meeting approach to policy.


• The current high is just shy of Thursday’s USD 3352.3/oz best, leaving the yellow metal a little way from peaks earlier in the week at 3366, 3374 and the WTD best at USD 3377.48/oz.


• Ahead, impetus for the metal will likely be driven by the broader risk tone with a handful of pertinent US data points due. But, before that, we have another appearance from Fed’s Waller, though it remains to be seen what he can add vs his overnight commentary.

Copper: +0.7%

• Following the risk tone, posting notable gains pretty much across the board thus far.


• For 3M LME Copper, this has taken it to a USD 9.75k peak and to a fresh high for the week. In terms of the next levels to the upside, the 9th July best lies just ahead at USD 9.76k and thereafter that week’s high at USD 9.8k before attention once again turns back to the USD 10k handle.

18 Jul 2025 - 10:05- ForexGeopolitical- Source: Newsquawk