EUROPEAN COMMODITIES UPDATE: Industrial commodities boosted by US-China updates; Spot gold slumps amid haven outflow

Crude Oil: WTI Jun +2.3%, Brent Jul +2.2%

• Immediate upside in crude benchmarks on the US-China joint statement, which, in short, reduced reciprocal tariffs by 115ppts each; the US to cut tariffs on Chinese goods to 30% from 145%, and China to cut tariffs on US goods to 10% from 125%; both for 90 days.


• Crude was immediately lifted on a larger-than-expected reduction in US and China tariffs, with WTI and Brent rising by 2.25% over 15 minutes, however profit taking has pushed off best, paring around half of the gains made in this time.


• Geopolitics has been brewing in the background but has taken somewhat of a back seat this morning.


• To recap: Ukraine and European leaders said they agreed to an unconditional 30-day ceasefire on sea, land and air starting on May 12th and peace negotiations will start in that period if there is a ceasefire, while they said if Russia fails to comply, they will respond with massive sanctions and increased military aid.


• On India/Pakistan, India’s Foreign Ministry said Pakistan’s Director General of military operations called on Saturday, and it was agreed that both sides would stop firing, and while Pakistan’s Foreign Minister said this is not partial and it is a full-fledged ceasefire understanding between the two countries.


• And in the Middle East, a Senior Palestinian official said Hamas was in talks with the US administration regarding a Gaza ceasefire and aid. It was later reported that Hamas said it will release the last US hostage in Gaza as part of efforts to reach a Gaza ceasefire and allow humanitarian aid, although there has been mixed reporting on whether Israel will abide by a ceasefire.

Precious Metals: Gold -2.8%, Silver -1.4%, Palladium -0.5%

• Hit by the surge in the dollar alongside outflows out of safe havens on the back of the aforementioned US-China trade updates, with the yellow metal unwinding much of the risk premium that was woven in during the tit-for-tat tariff increases between the US and China earlier this year.


• Spot gold slipped from a USD 3,324.73/oz peak to a USD 3,215.76/oz low at the time of writing.

Base Metals: 3M LME Copper +0.7%

• Boosted by sentiment amid the aforementioned positive US-China joint statement, with not much more to add, although upside is somewhat hampered by the surge in the Dollar and relatively subdued Chinese inflation data released over the weekend.


• 3M LME copper resides towards the upper end of a USD 9,577.00-9,577.00/t.

12 May 2025 - 10:00- MetalsEU Research- Source: Newsquawk