MAY 8, 2025 AT 08:50 AM
EUROPEAN COMMODITIES UPDATE: USD pickup weighs, geopols remain in focus
Source
SectionMarket Analysis
WTI/Brent: +1.1%/+1.1%
- Bid, but off best as the USD fights back in the European morning (see FX). Holding around the mid-point of today’s parameters which are just under USD 1/bbl in size and in very familiar levels from the last few days/weeks.
- At best, WTI and Brent got just above the USD 58.50/bbl and USD 61.50/bbl marks but failed to make any further ground as the DXY picked back up above the 100.00 mark.
- Specifics for the space are focussed on geopols, we await commentary from the meeting between China’s Xi and Russia’s Putin after the introductory remarks had little of pertinence. Elsewhere, tensions continue to rise between Pakistan and India while Yemen’s Houthis say they will not hesitate to carry out strikes against the US if US strikes on Yemen resume.
- Ahead, the complex is awaiting updates on the trade/tariff narrative and discussed geopols.
Gold: -0.7%
- Under pressure as the risk tone is supported by Trump’s trade announcement, an event we now know relates to the UK, and also the discussed recovery in the USD.
- Weighed on the yellow metal and sent it below Wednesday’s USD 3360/oz base by USD 40/oz and just beneath Tuesday’s trough, leaving the WTD low at USD 3237/oz as the next point of support.
- No reaction in gold to a Reuters report in the European morning that the PBoC is to allow local lenders to purchase more US Dollars to fund increased gold import quotas, according to the sources cited. The report adds that the PBoC increased gold import quotas in April. As a reminder, data earlier this week showed that the PBoC’s gold reserves increased for a sixth consecutive month.
Copper: -0.5%
- Rangebound in APAC trade after the pressure seen on Wednesday with 3M LME Copper basically holding at the bottom end of yesterday’s USD 9.36-9.47k band.
- Action that occurs as the complex waits for the upcoming UK-US trade announcement, details will be scrutinised to see how much of a hard line the US is taking in talks and for what, if any, insights from it can be applied to ongoing US-China talks.