Every week, this commodities roundup helps you review market news across the commodity markets to better understand price moves in energy, metals, and agricultural raw materials.
Energy : The market remains broadly supported by persistent tensions between Washington and Tehran. At the center of investors’ concerns remains the Strait of Hormuz. Maritime traffic there has slowed noticeably after a new series of US strikes on Iranian infrastructure, followed by reprisals from Tehran in the region. This decline in flows is reviving fears of disruptions to global energy supply and keeping a risk premium in crude prices. Even so, traders are not panicking. Hopes for a resumption of dialogue between the United States and Iran continue to cap tensions, even as the situation remains particularly unstable. At this stage, investors are mainly watching the two sides’ ability to avoid an uncontrolled escalation. Another factor supporting prices: Russia has suspended its diesel exports through the end of July following several Ukrainian attacks on its refineries. A decision that further tightens a market already sensitive to any threat to global supply.
Metals : Gold is still struggling to regain momentum. Even the renewed tensions between the United States and Iran have not triggered the usual flight-to-safety rush. Investors are more focused on the crisis’ impact on energy prices: more expensive oil could reignite inflationary pressures and prompt the Federal Reserve to keep rates higher for longer. That scenario is unfavorable for the yellow metal, which mechanically suffers when yields remain attractive. Despite this challenging backdrop, gold is showing some resilience and is trading above the symbolic $4,000 threshold. Copper had a more volatile week. Initially hit by a renewed bout of risk aversion, the red metal later rebounded on a weaker dollar and hopes of easing tensions in the Middle East. On the LME, three-month copper ends the week around $13,500 a metric ton. Investors are nevertheless continuing to closely monitor the conflict’s knock-on effects on inflation, interest rates, and global growth. Highly sensitive to the business cycle, copper is likely to remain largely driven by expectations for US monetary policy and risk appetite.
Agricultural products : Grains finished the week on a positive note in Chicago. Corn is around 433 cents, wheat is trading around 633 cents, and soybeans are extending their rebound to 1,178 cents. That optimism, however, should be tempered. The latest weather forecasts are calling for the return of widespread rains and milder temperatures across the US Corn Belt. That is enough to reassure traders after the recent heat wave and ease concerns about yields.
Source: Original Article
