EUROPEAN COMMODITIES UPDATE: Crude takes a breather, gold ebbs lower, and copper marches higher

Analysis details (10:58)

WTI and Brent October contracts are consolidating following yesterday's slide in prices, which saw the former settle lower by over USD 2/bbl and the latter by just shy of that mark. News flow for the complex has been rather light this morning, although the UAE Energy Minister has joined the growing list of OPEC+ members backing the Saudi statement regarding flexibility and a readiness to even cut-output if needed. As things stand, OPEC+ is preparing markets for a potential cut to its quotas, which would also aid the compliance issue. All in all, the September 5th meeting could hinge on the Iranian nuclear talks as per some sources alluding to this. WTI resides back above USD 93/bbl and Brent meanders around USD 100/bbl. Elsewhere, spot gold has been trading with a mild downside bias in the run-up to Fed Chair Powell’s speech, whereby he will likely reiterate that the Fed's decision will be based on incoming data within the context of its goal to bring inflation back down to target. That being said, the US jobs report on September 2nd and the US CPI Report on September 13th will be the prime catalysts before then, therefore, there is a chance that Powell could disappoint on that front today. Nonetheless, spot gold resides around USD 1,750/oz after dipping under its 10 DMA (USD 1,756.60/oz) and trades tentatively awaiting the next catalyst, with upside levels including the 50 and 21 DMAs at USD 1,765.65/oz, and USD 1,769/oz respectively. Base metals are mixed but copper prices remain supported and reside around USD 8,250/t, whilst the latest monthly update from the International Copper and Study Group suggested that the copper supply deficit at 66kt in June (vs a deficit of 34kt in May).

26 Aug 2022 - 10:58- Research Sheet- Source: Newsquawk