EUROPEAN COMMODITIES UPDATE: Crude takes a breather after yesterday's rally while gold awaits the FOMC

Crude Oil: WTI Sep -0.5%, Brent Oct -0.5%

• Flat/subdued trade across the crude complex as prices take a breather following yesterday's hefty gains.


• To recap, crude futures surged yesterday amid comments from US President Trump who confirmed changing the deadline for Russia to reach a Ukraine ceasefire agreement to 10 days, while there were simultaneous comments from Treasury Secretary Bessent who told Chinese officials that China could face high tariffs if it continues to purchase sanctioned Russian oil due to US secondary tariff legislation.


• Meanwhile, on US-China talks, US Treasury Secretary Bessent said he will see US President Trump regarding the China tariff pause on Wednesday (no time given) and some technical details remain on the China tariff pause, while the China tariff extension decision will be up to Trump and if he does not approve tariff pause extension, tariffs on Chinese goods would 'boomerang' back to April 2nd levels, or another level that he chooses.


• This morning, some downticks in the complex coincided with comments from Polish PM Tusk, who sees a chance that the Russia-Ukraine conflict could be paused in the near future, via Bloomberg. That being said, Tusk is not involved in any Russia-Ukraine talks.


• Aside from that, newsflow this morning has remained light ahead of the FOMC announcement, and before that, the US GDP and ADP. Prices were unfazed by French, German, or EZ GDPs.


• US Private inventory data (bbls): Crude +1.5mln (exp. -1.3mln), Distillate +4.2mln (exp. +0.3mln), Gasoline -1.7mln (exp. -0.6mln), Cushing +0.5mln; little action seen following this.


• WTI resides in a USD 69.01-69.79/bbl range with its Brent counterpart in a USD 72.52-72.24/bbl range.

Precious Metals: Gold +0.1%, Silver -0.3%, Palladium -0.3%

• Uneventful trade across precious metals as traders await the risk events later today.


• The advance reading of GDP in Q2 is expected to show growth of 2.4% (from the prior -0.5%), according to Reuters. The Atlanta Fedʼs GDPnow tracking estimate for the quarter is modelling growth of 2.9%. In June (end of Q2), S&P Globalʼs PMI data suggested that the US service sector reported sustained growth, and viewed alongside an improvement in manufacturing growth, indicates that the economy grew at a reasonable annualised rate in Q2, with momentum having improved following Aprilʼs lull.


• The FOMC is widely expected to hold rates at 4.25-4.50%, with all 105 economists surveyed by Reuters predicting no change. However, Governors Waller and Bowman favour a 25bps cut, citing labour market weakening, raising the possibility of dissent. Other policymakers remain cautious due to inflation risks from tariffs and political pressure from President Trump.


• Spot gold resides in a USD 3,321.79-3,333.77/oz range, and within Monday's USD 3,308.16-3,334.27/oz parameter, with the 50 DMA seen at USD 3,343.43/oz.

Base Metals: 3M LME Copper -0.1%

• Mixed trade across base metals with newsflow on the lighter side ahead of the aforementioned risk events.


• Overnight, iron ore prices retreated following a recent strong run, with some citing no updates on the US-China trade talks, with US President Trump yet to greenlight an extension of the tariff truce.


• This morning, China's Politburo held a meeting on the economy, and said the economy still faces challenges, adding that China should accelerate the issuance of government bonds, and called to implement more proactive fiscal policy, via Xinhua.


• 3M LME copper resides in a USD 9,726.35-9,826.65/t range at the time of writing.

30 Jul 2025 - 10:25- ForexGeopolitical- Source: Newsquawk