DECEMBER 11, 2024 AT 09:55 AM
EUROPEAN COMMODITIES UPDATE: Crude pares initial China-induced losses, base metals dip
Source
SectionMarket Analysis
WTI/Brent: +0.9%/+0.9%
- WTI and Brent began the European cash open on a firmer footing as traders digested reports that the US is weighing harsher oil sanctions against Russia weeks before Trump returns to office.
- Some modest pressure was seen on the back of Reuters reporting, which noted that China's top policymakers are considering allowing the Yuan to weaken in 2025 as Trump tariff looms. The downside later exacerbated, with the Dollar index climbing to fresh session highs of 106.68, and as such, taking the crude complex to lows of the day. In recent trade, almost the entirety of the China-induced downside has been pared.
- The geopolitical environment in the Middle East has seemingly calmed down in the past few days, with updates light aside from comments by Israeli PM Netanyahu who mentioned that Israel is to react strongly if new Syria regime lets Iran back in.
- WTI and Brent is on a firmer footing and currently trade in a respective USD 68.44-69.18/bbl and USD 72.15-72.67/bbl range.
Gold: -0.1%
- Spot gold is on a slightly softer footing, after briefly topping USD 2.7k/oz overnight. Since, the yellow-metal has gradually edged back below that level. Price action has been quiet choppy, with prices dropping around USD 30/oz in quick succession, before paring the downside quickly after. This volatility may stem from reports via Bloomberg, which note that Hungary added 15 tonnes of reserves this year.
- In European trade, XAU has traded in a tight range of USD 2675.89-2704.35/oz range. As a reminder, the yellow-metal surpassed its 50DMA (2,669.33/oz) in the prior day.
Base Metals: HG Copper -0.5%
- Base metals traded on a firmer footing throughout overnight trade, with gains driven by the ongoing optimism surrounding China's easing of overall monetary policy stance.
- Into the European morning, prices began to dive lower on reports that China's top policymakers are considering allowing the Yuan to weaken in 2025 as Trump tariff looms, via Reuters citing sources.
- HG copper currently trades towards the bottom end of a USD 4.20-4.2585/lb range.