EUROPEAN COMMODITIES UPDATE: Metals trade mixed amid the Dollar but crude holds an upward bias

Crude Oil: WTI Mar +0.6%,Brent Apr +0.4%

• Modest upside in crude benchmark after the sell-off yesterday which resulted in WTI settling with losses of USD 1.67/bbl and Brent lower by USD 1.59/bbl.


• In terms of trade yesterday, benchmarks were weighed on by disappointing Chinese Caixin Services PMI data and thereafter, the bearish EIA inventory data saw crude building a lot more than was expected. A further leg lower in prices was seen on BBG source reports which suggested US allies expect US President Trump's administration to present a long-awaited plan to end Russia's war on Ukraine at the Munich security conference in Germany next week.


• Action this morning wasn't dictated by any fresh macro headlines, although crude experienced a few upticks and broke out of overnight ranges in the first half of the European session as volumes picked up.


• Desks highlight that the tariff theme will likely dictate sentiment for much of this year.


• Citi sees Brent crude at USD 60-65/bbl in H2 2025 and maintains the strong view that US President Trump could ultimately prove to be a bearish influence on the oil market.


• WTI Mar sits in a USD 71.40-71.47/bbl range while Brent Apr resides in a USD 74.60-74.98/bbl parameter.

Nat Gas: Dutch TTF +1.2%, US nat gas -0.2%

• Dutch TTF remains firm after settling with gains over 2.7% yesterday, with desks citing cold weather forecasts fanning concerns regarding steeper drawdown in storage.


• "Speculators also appear to remain supportive towards the market with the latest positioning data showing that investment funds increased their net long by 5TWh over the last reporting week to 283TWh. " says ING.

Precious Metals: Gold -0.3%, Silver -0.9%, Palladium +0.2%

• Soft trade across precious metals amid a more constructive risk tone but also alongside a surging dollar.


• Trade tensions and geopolitics will likely continue dictating this space in the absence of scheduled events, whilst traders look ahead to tomorrow's US jobs report.


• ING suggests "While the uncertainty over trade and tariffs continues to boost gold prices, Trump’s latest comments that the US take over the Gaza Strip and assume responsibility for reconstructing the territory have added to gold’s bullish momentum."


• Citi lifted its 2025 average forecast for Gold to USD 2900/oz (prev. 2800/oz); the 0-3month target was upgraded to USD 3000/oz, 6-12 target was maintained at USD 3000/oz. The base case does not expect gold to be included in any blanket tariff during Q2-2025.


• Spot gold resides in a USD 2,848.97-2,873.34/oz range vs yesterday's USD 2,839.74-2,882.31/oz parameter.

Base Metals: 3M LME Copper +0.7%

• Mixed trade across base metals despite the firmer Dollar but amid the mostly constructive risk sentiment across the broader market.


• Copper futures, in the absence of newsflow at the time, surged shortly after the reopening amid the positive risk environment and potential technical buying.


• Iron ore futures ground higher overnight with Australian supply issues cited as the Australian hurricane season disrupts supply.


• 3M LME copper resides in a USD 9,267.85-9,356.00/t.

06 Feb 2025 - 10:25- MetalsEU Research- Source: Newsquawk