EUROPEAN COMMODITIES UPDATE: Crude rises on trade optimism and geopolitics, gold unwinds risk premium

Crude Oil: WTI Sep +0.9%, Brent Sep +0.8%

• Firmer trade across the crude complex with a bulk of this morning's price action commencing just before 07:00 BST as European traders entered the fray, to the trade optimism felt across markets following the US-Japan deals alongside unofficial reports of an EU-US deal, although US officials suggested taking these reports with a pinch of salt.


• The price action also coincided with commentary from US envoy Barrack, who said Lebanon's failure to disarm Hezbollah means that the Israeli raids will continue; " There is no open deadline for disarming Hezbollah and the one who decides the duration of this period is Israel, not the United States".


• Sticking with geopolitics, British maritime security firm Ambrey said unidentified people in a wooden boat fired on a Comoros-flagged livestock carrier on Thursday in the Red Sea near Yemen.


• Elsewhere, TotalEnergies in its quarterly earnings report suggested, "The market is facing an abundant supply that is fueled by OPEC+'s decision to unwind some voluntary production cuts and weak demand that is linked to the slowdown in global economic growth."


• WTI resides closer to the upper end of a USD 65.37-66.24/bbl range, while Brent sits in a USD 68.61-69.45/bbl range.

Precious Metals: Gold -0.5%, Silver -0.5%, Palladium -1.0%

• Lower across the board amid the outflow of havens on trade optimism, with a similar performance seen across the bond market.


• To recap, following the US-Japan deal, reports noted that the US and the EU were closing in on a trade deal with a 15% tariff rate, albeit this is yet to be officially confirmed, and White House Trade Adviser Navarro said to take the reports with a pinch of salt.


• On the Fed, US Treasury Secretary Bessent said they could see 1-2 rate cuts this year and noted that he has breakfast with Fed Chair Powell almost every week. Bessent separately commented that a new Fed Chairman nominee is likely to be announced in December or January.


• Note, White House said US President Trump will visit the Federal Reserve on Thursday at 16:00EDT/21:00BST.


• Overnight, it was reported that China June YTD gold output fell 0.3% Y/Y to 179.083 metric tons and China June YTD gold consumption fell 3.54% Y/Y to 505 metric tons, according to the China Gold Association.


• Spot gold resides in a USD 3,366-3,393.48/oz range at the time of writing.

Base Metals: 3M LME Copper U/C

• Base metals are flat/mixed despite the broader risk appetite as traders gear up for trade deals ahead of next Friday's deadline, with the EU and US on watch, whilst officials from Washington and Beijing also gear up for a meeting next week, in Sweden. Furthermore, markets are also on the lookout for details regarding the US copper tariff.


• Overnight, Chinese lithium futures hit a five-month peak on expectations of potential supply cuts.


• Aside from that, there has been little of note for the base metals complex this morning.


• 3M LME copper resides in a USD 9,923.05-9,969.00/t range.

24 Jul 2025 - 10:05- ForexGeopolitical- Source: Newsquawk