EUROPEAN COMMODITIES UPDATE: Crude contained again while XAU benefits from geopols

Analysis details (10:00)

• Crude benchmarks are modestly softer on the session but once again newsflow is relatively limited in nature ex-geopols and as such the December'23 contracts remain within familiar levels around 30-40 cents below the USD 85.00/bbl and USD 90.00/bbl marks for WTI and Brent respectively.


• The main developments for the space have, as has been the case recently, focused on geopolitics after reports that the IDF undertook an extensive ground raid into the Gaza Strip while the Israeli PM confirmed that they are preparing for a ground invasion and the timing of this will be determined via consensus; the PM would not provide any further details when questioned. Most recently, the Iranian IRGC Commander has warned Israel against commencing a ground operation within Gaza, saying "“the dragon of Gaza will devour them. If they set foot in Gaza, they’ll be buried there."


• Israel-Hamas aside, Russian Defence Minister Shoigu has been on the wires and announced that they are to begin training on a nuclear strike, remarks likely in the context of Russia having announced it is withdrawing from the global nuclear test ban agreement.


• Given the above developments, spot gold is firmer to the tune of USD 10/oz and is testing the USD 1990/oz mark to the upside. Action which takes it further away from any real technical levels and brings back into view the USD 2k handle. Though, levels above that are someway away and largely coalesces around the USD 2050/oz figure before the YTD peak of USD 2081/oz.


• Turning to base metals, the likes of LME Copper are tracking the broader market tone and the accompanying USD strength that has been a feature of the European morning and as such reside in the red. For copper specifically, the 3-month contract is testing the USD 8k mark to the downside with losses of just under 0.5% on the session thus far; though, the pace of the decline has slowed significantly in recent trade alongside a slowdown in macro developments and a steadying  in broader price action ahead of a packed PM agenda.

26 Oct 2023 - 09:55- MetalsResearch Sheet- Source: Newsquawk