EUROPEAN COMMODOTIES UPDATE: XAU bid owing to its safe-haven status

WTI/Brent: -0.8%/-0.8%

• WTI and Brent are on the back foot, having initially started the European session with incremental losses. Pressure in the complex accelerated following commentary from Russia’s Kremlin which noted that, "Russia reserves the right to use nuclear weapons in an event of aggression".


• Whilst the pressure in the complex could be associated with the risk-off sentiment across financial markets, some traders may look at the possible demand implications of Russia’s comments.


• On the supply front, Equinor said production has restarted at its Johan Sverdrup oilfield; expects the oilfield to produce at 2/3 of normal capacity during morning hours today. This announcement did not spark an immediate move, but could be a factor for the pressure seen thus far.


• WTI’Dec currently trades in a USD 68.53-69.38/bbl range, but still a far cry from the lows seen in the prior session. Brent’Jan 25 sits towards the bottom end of a USD 72.72-73.53/bbl range.

Gold: +0.7%

• Precious metals are on a firmer footing continuing the price action seen overnight. XAU specifically caught a bid owing to its safe-haven status, following the aforementioned geopolitical updates via Russia’s Kremlin.


• XAU currently sits towards the upper end of a USD 2,610-30/oz range, climbing above the prior day’s best; further upside could see a potential test of its 50 DMA at USD 2,656/oz.

Copper: +0.2%

• Base metals began the European session entirely in the green, benefiting from the positive risk tone overnight and amid support pledges by Chinese officials.


• However, after the aforementioned geopolitical updates, sentiment was hit, with metals prices dipping off best levels. HG Copper was already heading lower before Russia’s Kremlin punchy rhetoric, but the downside accelerated from USD 4.1758 to a low of USD 4.1458; the metal still remains modestly in positive territory.

19 Nov 2024 - 09:55- ForexGeopolitical- Source: Newsquawk