EUROPEAN COMMODITIES UPDATE: Crude edges higher in choppy trade; XAU eyes USD 2.6k

WTI/Brent: +0.7% / +0.8%

• WTI and Brent are firmer in what has been a choppy session for the complex thus far, having swung between gains and losses since the cash open.
• On the geopolitical front, Middle Eastern geopolitical newsflow was relatively light; Israel conducted an airstrike which killed Hezbollah’s media relations chief Mohammad Afif.
• As for Russia/Ukraine the main story over the weekend was, US President Biden’s administration lifting restrictions on Ukraine using US-made weapons to strike deep inside Russia, according to sources familiar with the decision cited by Reuters.
• WTI’Dec currently trades towards the upper end of a USD 66.61-67.49/bbl range, whilst Brent’Jan 25 resides towards the upper end of a USD 70.70-71.65/bbl range.
• Goldman Sachs sees Brent crude trading USD 70-85/bbl but could climb on harsher Trump sanctions on Iran, while it reiterated its gold target of USD 3,000/oz by December 2025.

Precious metals: Gold +1.1%, Silver +1.5%

• Precious metals are on a firmer footing, having rallied overnight alongside strength in silver, but without a clear catalyst driving the upside.
• Some of the upside could potentially be associated with the return of geopolitical risk premia, given the aforementioned US/Ukraine/Russia developments.
• XAU currently holds towards the upper end of a 2,566-597/oz range; the 100 DMA (2548.22), which was tested last Thursday, has now been left behind. Next upside level for the yellow-metal includes USD 2.6k, and then its 50 DMA at 2,653.64 thereafter.

Base metals: Copper +0.4%

• Base metals hold a positive bias, continuing the price action seen overnight, where the complex benefited from a generally positive risk sentiment in APAC trade overnight.
• 3M LME Copper is slightly firmer and trades within a USD 8,994-9,044.50 range; currently holding just above the USD 9k mark.