EUROPEAN COMMODITIES UPDATE: Industrial commodities higher on optimism, spot gold unwinds risk premium

Crude Oil: WTI Jun +1.7%, Brent Jun +1.8%

• Firmer trade across the crude complex with optimism was facilitated by the more sanguine language from the US regarding China, whilst US President Trump also dialled down his tone regarding the dismissal of Fed Chair Powell, which, in turn, boosted risk sentiment.


• To recap, US Treasury Secretary Bessent told a closed-door investor summit Tuesday that the tariff standoff with China is unsustainable and that he expects the situation to de-escalate. That being said, FBN's Gasparino posted on X that "he's been told by a person close to US Treasury Secretary Bessent that the reports on his remarks about a trade deal with China being imminent overstate what he said, while he meant there is room for talks and de-escalation but much also depends on China's willingness to compromise on trade as well.


• Elsewhere, IEA Executive Director Birol said oil prices may see further downward pressure, via Bloomberg TV, and he expects oil demand to slow down.


• Another factor to be aware of for the complex is the seasonal demand which is expected to pick up, with the US driving season also looming.


• WTI currently resides in a USD 63.76-64.84/bbl range while its Brent counterpart trades in a USD 67.68-68.63/bbl parameter.

Precious Metals: Gold -2.2%, Silver +1.0%, Palladium +0.1%

• Mixed trade across precious metals, with spot silver outperforming following yesterday's underperformance.


• Investors are unwinding some risk premium from gold following the more sanguine language from the US regarding China, whilst US President Trump also dialled down his tone regarding the dismissal of Fed Chair Powell, in turn boosting risk sentiment.


• That being said, markets await more certainty regarding US tariff policy amid the limbo during the 90-day negotiating period until the start of July.


• Spot gold trades in a USD 3,291.73-3,386.77/oz range, with the next low being the 17th April low (USD 3,327.37/oz) whilst the next upside level would be the current record high at USD 3,500.20/oz.

Base Metals: 3M LME Copper +0.6%

• Firmer trade across base metals amid the constructive risk tone, although gains overnight were limited by the unambitious performance in Chinese equities.


• Peru's Antamina copper mine reported the death of an operations manager in an incident at the mining camp, while Antamina launched a total shutdown for security as it investigates the accident.


• Corporation National del Cobre de Chile market intelligence and strategy specialist Eric Medel said the upside potential of copper has been reduced and copper prices are likely to remain bearish in the short term amid trade war risks.


• 3M LME copper current resides in a USD 9,380.60-9,483.73/t range at the time of writing.

23 Apr 2025 - 10:00- ForexGeopolitical- Source: Newsquawk