Commodity Insights

Precious Metals:
Gold and silver rebounded after a sharp bout of profit-taking, with gold stabilising near $4,375/oz following its steepest intraday fall since October. The recent decline appears corrective rather than trend-breaking. The broader outlook for gold remains constructive, supported by sustained central-bank buying, steady ETF inflows, and expectations of further Fed easing and a softer US dollar. Rising concerns over developed-market debt and persistent geopolitical risks continue to underpin safe-haven demand.

Crude Oil:
WTI crude extended gains for a second straight session, trading near $58.50/bbl, as geopolitical tensions provided short-term support. Reports of Venezuelan well shutdowns amid partial US restrictions, escalating Middle East tensions, and renewed uncertainty around Ukraine peace efforts lent a risk premium. However, the fundamental backdrop remains heavy, with US crude inventories showing an unexpected build and global supply conditions pointing to a glut. OPEC+ is expected to maintain its pause on additional supply hikes, likely limiting sustained upside beyond event-driven spikes.

Base Metals:
Base metals are trading firm despite some cooling from record highs. Copper continues to hold most of its recent gains, although profit-taking has emerged at elevated levels amid softer year-end spot demand. Earlier strength was driven by Shanghai market outperformance, with LME copper catching up post-holiday and moving close to the $13,000/ton mark. Sentiment remains supported by tightening supply signals, China’s move to curb future copper capacity growth, low treatment charges, a softer dollar, and expectations of further policy easing.

Natural Gas:
Natural gas prices remain range-bound, shaped by a balance between weather signals and ample supply. European gas eased from a one-month high as milder mid-January forecasts offset winter demand, while steady supply and weak industrial consumption kept prices capped. In contrast, US gas rose to a multi-week high on expectations of colder early-January weather boosting heating demand, particularly in the Northeast. Storage withdrawals remain in line with seasonal norms, and production stays near record levels, suggesting weather-driven volatility without sustained upside.