EUROPEAN COMMODITIES UPDATE: Gold tops USD 2,900/t on tariff woes

Crude Oil: WTI Mar +1.1%, Brent Apr +1.0%

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  Crude futures extend on earlier gains having gradually advanced in APAC hours following US President Trump's tariff rhetoric but with gains capped amid the cautious risk appetite.


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  In geopolitics, Trump commented that he spoke with Russian President Putin regarding ending the Ukraine war although offered very few details including when the call took place.


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  In the Middle East, US President Trump said he is committed to buying and owning Gaza and may give sections to other states in the Middle East to rebuild it, while he added that they will make Gaza into a good site for future development.


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  Trump also said that he will be meeting with Saudi Arabia’s Crown Prince MBS and Egyptian President Sisi, as well as noted that Middle Eastern nations will take Palestinians after those nations speak to him.


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  Iranian Defence Minister said "It is not possible to reach an agreement with the current US government on the nuclear agreement", via Sky News Arabia


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  WTI currently resides in a USD 70.84-71.76/bbl parameter while Brent trades within USD 74.51-75.43/bbl confines.

Nat Gas: Dutch TTF +4.2%, US Nat Gas +3.5%

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  Firmer trade across contracts with European Nat Gas rising to a two-year peak to levels last seen in February 2023 - with desks citing colder temperature and tight storage.


• "Stockpiles are already at their lowest for this time of year since the energy crisis in 2022. Inventories are only 49% full compared with 67% at the same time last year", says ING.


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  Elsewhere, it was reported that Indian LNG buyers are said to be in talks for more US supply ahead of Indian PM Modi's trip to the US, according to Bloomberg.


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  In Europe, TotalEnergies CEO Poyanne said he is “ready” to help the US sell more LNG to Europe, but urged the EU to seek a long-term deal to guarantee energy security, according to the FT.

Precious Metals: Gold +1.4%, Silver +1.3%, Palladium +0.8%

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  Spot gold steadily gained with the precious metal notching a fresh record high and printing USD 2,900/oz just over an hour after the European equity cash open.


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  Desks pin the recent surge in the yellow metal to tariff woes that risk hotter inflation and slower economic growth - in turn spurring demand for safe havens.


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  Elsewhere, the PBoC expanded gold reserves for a third straight month according to data from the World Gold Council.


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  Spot gold currently resides in a USD 2,860-2,901.49/oz range at the time of writing, after topping the record high set last Friday at USD 2,886.85/oz.

Base Metals: 3M LME Copper -0.6%

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  Copper futures were subdued after rangebound APAC trade, with tariff concerns and implications continuing to weigh on sentiment in the complex.


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  Over the weekend, Chinese CPI rose +0.7% M/M in January (exp. 0.8%), with the annual rate ticking up to +0.5% Y/Y (exp. 0.4%, rev. 0.1%). Meanwhile, PPI remained at -2.3% Y/Y in January (exp. -2.1%, prev. -2.3%). Capital Economics said headline CPI rose to a five-month driven by the lagged effect of stronger demand last quarter on the back of government efforts to boost consumption. "But with the boost from stimulus likely to be short-lived, we expect persistent structural imbalances in the economy to keep inflation low through 2025 and beyond," the consultancy added.


• As mentioned above, US President Trump said they will be announcing on Monday 25% tariffs on all steel and aluminium coming into the US and he will announce reciprocal tariffs on Tuesday or Wednesday which will go into effect almost immediately.


• In 2024, Canada was the top supplier of both steel and aluminium to the US, with USD 11.2bln in steel and USD 9.5bln in aluminium imports.


• For steel, other key suppliers were Mexico (USD 6.5bln), Brazil and China (USD 5.2bln each), and Taiwan (USD 3.8bln).


• For aluminium, after Canada, the largest sources were UAE (USD 1.1bln), Mexico (USD 686mln), and South Korea (USD 644mln).


• 3M LME copper resides in a USD 9,379.35-9,477.95/t range at the time of writing.


• Overnight, Dalian iron ore futures ended daytime trade +0.8% with desks suggesting signs of recovery via the latest Chinese CPI data.

10 Feb 2025 - 09:45- MetalsData- Source: Newsquawk