EUROPEAN COMMODITIES UPDATE: Crude reverses on China sources, base metals hit on US' critical mineral investigation; gold tops USD 3,300/oz

Crude Oil: WTI May +0.7%, Brent Jun +0.6%

• What kicked off as a notable downbeat session for the crude suddenly reversed.


• Sentiment was initially hit on several fronts, including the US investigation into critical minerals (following China's export controls), NVIDIA's USD 5.5bln charge related to US-Sino tensions, and downbeat ASML earnings and accompanying cautious commentary on trade.


• Thereafter, price action reversed on reports that China is said to be open to talks if US President Trump shows respect, via Bloomberg sources. China wants Trump to rein in cabinet members and show consistency, and wants US talks to address concerns on Taiwan and sanctions. Note, China has been maintaining this approach/sentiment since the start of the trade escalations.


• Meanwhile, the APAC session saw a slew of Chinese data: Chinese GDP QQ SA (Q1) 1.2% vs. Exp. 1.4% (Prev. 1.6%); GDP YY 5.4% vs. Exp. 5.1% (Prev. 5.4%); Chinese Retail Sales YY (Mar) 5.9% vs. Exp. 4.2% (Prev. 4.0%); Chinese Industrial Output YY (Mar) 7.7% vs. Exp. 5.8% (Prev. 5.9%). The mostly better-than-expected GDP and activity data from China failed to inspire given that they were from a period before the US-China tariff escalation.


• Back to trade, prospects of imminent US deals with the EU and UK look less rosy. EU and US made little progress in narrowing trade differences this week, according to Bloomberg sources. Meanwhile, sources told Sky News the UK was "in the foothills" of a deal, but it has not been straightforward, and there is some distance to go.


• Elsewhere, OPEC released its compensation lists, although this is more of a technical release (as opposed to a market mover) following the virtual meeting held by the eight countries with additional voluntary adjustments, including Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, on 3 April 2025.


• WTI resides in a USD 60.44-61.55/bbl range while its Brent counterpart trades in a USD 64.90-64.31/bbl parameter.

Precious Metals: Gold +2.5%, Silver +1.8%, Palladium -0.2%

• Firm price action across spot gold and silver amid the risk aversion caused by the aforementioned factors - namely the worsening trade landscape.


• Investors are flocking to gold and silver for safety, whilst spot palladium reacts with the auto sectors and the potential of softer demand.


• Spot gold mounted USD 3,300/oz for the first time ever, with momentum continuing - with today's range currently USD 3,230.68-3,317.92/oz.


• Gains in the complex were halted on reports that China is said to be open to talks if US President Trump shows respect, via Bloomberg sources. China wants Trump to rein in cabinet members and show consistency and wants US talks to address concerns on Taiwan and sanctions. Note, that China has been maintaining this approach/sentiment since the start of the trade escalations.

Base Metals: 3M LME Copper -0.4%

• Softer across the board amid the overall downbeat sentiment across the markets amid the aforementioned reasons.


• Prices however came off lows after reports that China is said to be open to talks if US President Trump shows respect, via Bloomberg sources. China wants Trump to rein in cabinet members and show consistency and wants US talks to address concerns on Taiwan and sanctions. Note, that China has been maintaining this approach/sentiment since the start of the trade escalations.


• Meanwhile, Chinese GDP QQ SA (Q1) 1.2% vs. Exp. 1.4% (Prev. 1.6%); GDP YY 5.4% vs. Exp. 5.1% (Prev. 5.4%); Chinese Retail Sales YY (Mar) 5.9% vs. Exp. 4.2% (Prev. 4.0%); Chinese Industrial Output YY (Mar) 7.7% vs. Exp. 5.8% (Prev. 5.9%). The mostly better-than-expected GDP and activity data from China failed to inspire given that they were from a period before the US-China tariff escalation.


• 3M LME copper resides in a USD 9,030.00-9,125.15/t range.

16 Apr 2025 - 10:10- ForexData- Source: Newsquawk