EUROPEAN COMMODITIES UPDATE: Gold bides time ahead of US jobs; base metals rise

WTI/Brent: -0.2%/-0.3%

• Modest downward tilt with prices lacklustre after the prior day's choppy performance amid the deluge of OPEC+ updates, with traders keeping an eye on geopolitical updates ahead of the US jobs report.


• Post-OPEC, analysts at ING said "Expectations for a smaller surplus means that downside for ICE Brent is likely more limited in 2025 than initially expected. Previously, we had forecast ICE Brent to average $69/bbl over 2025. However, following this action from OPEC+, we have increased this to $71/bbl. The fact that the market will still be in surplus means that there is still downside in prices from current levels, particularly in 4Q25. Risks to this view include OPEC+ extending these cuts even further into 2025 and stricter enforcement of oil sanctions against Iran."


• Elsewhere, Morgan Stanley raised its H2 2025 Brent price forecast to USD 70/bbl (prev. USD 66-68/bbl); and lowered its estimate for OPEC-9 production by 400k BPD for 2025 and 700k BPD by Q4 2025. The desk said the OPEC+ updated production agreement tightens its supply/demand outlook for 2025, particularly for H2. MS still estimates a surplus for the oil market next year, but smaller than before.


• WTI Jan'25 resides between USD 67.94-68.49/bbl and Brent Feb'25 within USD 71.70-72.19/bbl parameters.

Spot Gold: +0.4%

• Mixed trade across precious metals but the breadth of the market is once again narrow ahead of the US jobs report.


• Mild outperformance is seen in spot palladium, whilst spot gold posts modest gains and spot silver mild losses.


• Spot gold resides in a USD 2,613-2,645.73/oz range after dipping under yesterday's USD 2,623.61/oz low. Prices remain sandwiched between the 50 DMA (USD 2.667.96/oz) and 100 DMA (2,583.44/oz).

3M LME Copper: +0.8%

• Upward bias across base metals as traders look ahead to the US jobs report, and thereafter the Chinese Central Economic Work Conference next week.


• While no major numerical targets are expected from the Conference (typically set at the Two Sessions), the market will be closely watching for shifts in tone on fiscal and monetary policy heading into next year.


• The focus will likely be on whether there’s a new emphasis on boosting domestic demand or supporting the property market. Analysts will also be attentive to any changes in rhetoric that could signal a shift toward more aggressive policy support.


• Analysts at ING “expect the markets would be satisfied with a shift to signal more aggressive policy support but may be disappointed if the release offers little new content.”

06 Dec 2024 - 09:50- MetalsGeopolitical- Source: Newsquawk