Commodity Overnight Update: Gold Surges, Base Metals Mixed, Oil Under Pressure

Advisory Bazaar Info Services

Key Highlights

* Base Metals: Most base metals remained weak in overnight trading. LME Nickel gained 1.50%, while LME Zinc declined 1.90%.

* Precious Metals: COMEX Gold surged 2.37%, moving above $4,400/oz, while Silver advanced 3.56%.

* Gold Outlook: UBS expects Gold to approach $5,000/oz in the first half of 2027, reflecting continued support from macroeconomic and structural factors.

* China Trade: China’s total goods trade increased 17.3% YoY to 30.13 trillion yuan during the first seven months of 2026.

* Aluminium: China’s aluminium industry profits rose by around 115% YoY in H1 2026, while exports of aluminium semi-finished products and finished products increased by nearly 14%.

* US Dollar: The Dollar Index fell 0.35% to 99.6, pressured by weaker US employment data and reduced expectations of further Fed tightening.

* Fed Outlook: Markets are pricing in a 59.9% probability of unchanged rates in September, while the probability of a 25 bps rate hike stands at 40.1%.

* Crude Oil: WTI and Brent crude edged lower. On a weekly basis, WTI declined 8.96%, while Brent fell 6.31%.

* Strait of Hormuz: Reports of progress in US-Iran talks and potential arrangements for shipping through the Strait of Hormuz have reduced the geopolitical risk premium in crude oil.

* Next Week: Key events to watch include US CPI, PPI, Retail Sales, Jobless Claims, China M2, the RBA rate decision, along with EIA, IEA and OPEC oil market reports.

Market Outlook

Overnight trading saw a mixed-to-weak trend in base metals, while precious metals continued to rally strongly. Weaker US employment data put pressure on the US Dollar and Treasury yields, providing strong support to Gold and Silver.

China’s robust trade data and improved profitability in the aluminium sector are positive signals for industrial metals. However, global demand conditions, the direction of the US Dollar and upcoming US inflation data will remain important drivers for the next move in base metals.

In crude oil, developments surrounding the Strait of Hormuz and US-Iran negotiations remain key market drivers. If progress continues toward a sustainable resolution on shipping restrictions, the geopolitical risk premium in crude could decline further.

Overall Outlook

Gold and Silver: Strong near-term trend

Base Metals: Selective consolidation with a mixed bias

Crude Oil: Bearish-to-range-bound bias