EUROPEAN COMMODITIES UPDATE: Crude and gold remain firm amid escalating geopolitics

Crude Oil: WTI Jun +1.9%, Brent Jul +1.9%

• Firm gains across the crude complex, with prices rebounding from the earlier OPEC-induced downside, with most of Asia also returning to the market from the long weekend.
• The upside could be at least partially attributed to the geopolitical developments yesterday, in which Israel expanded its Gaza operation and suggested that it plans to occupy the territory, marking a major escalation from its initial plans of destroying Hamas and its capabilities.
• Meanwhile, European Commission is to make a legal proposal to ban Russian gas and LNG imports by end-2027 and ban new Russian gas deals and existing spot contracts by end-2025; plans will be announced on Tuesday, legal proposals due in June, via an EU official; In fitting with Bloomberg reports from yesterday that the EU plans to propose banning Russian gas imports by the end of 2027.
• Ahead, there is little in terms of Tier 1 data, although the EIA STEO will be released at 17:00BST before the weekly private inventory report after the US close.
• WTI resides in a USD 57.03-58.52/bbl range while Brent sits in a USD 60.18-61.64/bbl parameter.

Precious Metals: Gold +1.3%, Silver +1.5%, Palladium +0.7%

• Higher across the board amid a softer Dollar, the return of APAC players, ongoing tariff woes, and escalating geopolitics.
• Spot gold has almost reversed the losses seen during the final week of April with the yellow metal current in a USD 3,322.75-3,387.02/oz parameter as it eyes USD 3,400/oz to the upside.
• In other news, Shanghai Gold Exchange plans to expand its warehouse network to Hong Kong to boost the visibility of its yuan-denominated gold products outside mainland China, according to Bloomberg sources.

Base Metals: 3M LME Copper +0.3%

• The base metals complex ekes mild gains with the aid of a softer Dollar and alongside the return of some demand as most APAC markets returned from their long weekend.
• Sentiment this morning has been cautious and base metals have been somewhat reflective of the market tone.
• 3M LME copper has waned off best levels but resides around the middle of a USD 9,366.50-9,487.53/t intraday band.
• Dalian iron ore futures was rangebound on its return and ended the day flat, with upside capped by disappointing Chinese Caixin Services PMI.