Commodity markets opened Tuesday with investors balancing easing geopolitical tensions in the Middle East against ongoing concerns around global supply chains, inflation, and economic growth. Energy markets moderated after recent volatility tied to the Israel-Iran conflict, while metals were supported by supply constraints, continued central bank gold purchases, and signs of improving industrial demand. Investors are also closely watching upcoming U.S. inflation data and Chinese economic releases for clues on the path of interest rates and global growth.
Oil & Gas
Energy markets remain highly sensitive to developments in the Middle East. After surging earlier this week on concerns surrounding the Israel-Iran conflict, crude oil prices eased modestly in pre-market trading as hopes for a ceasefire improved investor sentiment. Despite the pullback, underlying supply concerns remain elevated, particularly around shipping activity through the Strait of Hormuz and declining inventory levels at key U.S. storage hubs.
Natural gas prices rebounded after Monday’s decline, supported by stronger LNG demand expectations and increased imports across Asia. Traders are also awaiting key inventory reports from the EIA and API later this week, which could provide further insight into supply-demand balances heading into the summer driving and cooling seasons.
Key Themes:
- Crude prices eased as ceasefire discussions reduced immediate geopolitical concerns.
- U.S. crude inventories and Cushing storage levels remain near critical operating thresholds.
- China’s crude imports fell to their lowest level in eight years during May.
- Natural gas markets continue to benefit from rising global LNG demand and stronger Asian imports.
- Investors are focused on upcoming EIA and OPEC reports for updated supply outlooks.
Metals & Mining
Metals markets were mixed but generally constructive heading into Tuesday. Gold prices were little changed as investors weighed reduced geopolitical risk against expectations for higher interest rates. The market is increasingly focused on upcoming U.S. inflation data, with traders now assigning a high probability of additional Federal Reserve tightening later this year.
Industrial metals continued to outperform, led by copper, which benefited from ongoing supply concerns and optimism surrounding long-term demand. Notably, reports indicate Chinese buyers are aggressively sourcing tungsten from U.S. scrapyards, pushing prices higher as countries compete to secure critical minerals. Meanwhile, China’s central bank extended its gold-buying program for a nineteenth consecutive month, providing ongoing support for precious metals demand.
Mining & Metals Highlights
- Copper prices continued to climb, extending strong year-to-date gains.
- Chinese demand for critical minerals remains robust, particularly in tungsten markets.
- China’s central bank added to gold reserves for the nineteenth consecutive month.
- Eldorado Gold announced first copper concentrate production at its McIlvenna Bay project in Canada.
- Wells Fargo raised aluminum price forecasts through 2027, citing persistent supply tightness.
- Australian gold production declined during the first quarter due to weather-related disruptions.
Markets continue to navigate the intersection of geopolitics, central bank policy, and supply-chain dynamics. While easing tensions in the Middle East have reduced some immediate pressure on energy markets, inventory levels and transportation risks remain important watchpoints. In metals, strong copper performance and continued central bank gold purchases highlight the ongoing demand for both industrial and defensive assets. Looking ahead, this week’s U.S. CPI report and China’s inflation data could play a significant role in shaping commodity price direction and broader market sentiment.
Metals Snapshot:
- Gold +0.03% to $4364.7/oz, Monthly (7.74)%, YTD +0.54%:
- Silver +0.18% to $68.71/oz, Monthly (15.03)%, YTD (2.68)%:
- Copper +1.22% to $6.4275/lb, Monthly +2.08%, YTD +13.12%:
- Aluminum (1.78)% to $3669.5/mt, Monthly +0%, YTD +0%:
- Nickel (1.11)% to $18340/mt, Monthly +0%, YTD +0%:
- Zinc (1.57)% to $3519/mt, Monthly +0%, YTD +0%:
- VanEck Gold Miners ETF +0% to $78.67, Monthly (16.83)%, YTD (8.28)%:
- VanEck Junior Gold Miners ETF +0% to $101.61, Monthly (19.25)%, YTD(10.7)%:
- US Dollar (0.33)% to $99.711, Monthly +1.85%, YTD +1.41%:
- CBOE Volatility Index (2.93)% to $18.19, Monthly (5.34)%, YTD +10.03%:
Energy Pre-Market
Oil & Gas:
- Pricing
- WTI (1.9%) to $89.61 (July)
- Brent (1.5%) to $92.96 (Aug)
- Natural gas +1.0% to $3.179 (July)
- RBOB (0.2%) to $3.065 (July)
- ULSD (0.4%) to $3.586 (July)
