[MARKET ANALYSIS] Crude continues to dictate macro sentiment; Gold rotates around USD 5,000/oz

• WTI and Brent futures are softer, albeit off their worst levels seen during APAC hours, as participants digested the latest geopolitical headlines and commentary, but with no major fresh escalation or de-escalation in the conflict. In terms of major developments in the Iranian war, Iran confirmed its security chief Larijani was killed in an air strike. Analysts at ING posit “Confirmation of the death of Iran’s security chief, Ali Larijani, only increases uncertainty for markets. It’s unlikely to lead to de-escalation.” Subsequently, Iran’s Foreign Minister has ruled out a ceasefire.
• Meanwhile, Saudi Arabia is to host a meeting today of Arab and Islamic foreign ministers in Riyadh, on regional security. This comes after several drones were shot down while trying to approach the Saudi embassy district. Elsewhere for the crude complex, Iraq's government and Kurdish authorities reached an agreement to resume exports through Ceyhan port in Turkey, while there was mixed private inventory data, which showed a larger-than-expected build in crude and a wider-than-forecast drawdown in gasoline. Last night’s Private Inventory data was overlooked amid the Iranian war, with a similar story likely for today’s weekly DoEs. WTI resides around mid-range between USD 91.45-95.65/bbl and Brent similarly between USD 100.34-103.67/bbl.
• Precious metals are rangebound as prices attempt to juggle the repercussions of higher oil prices against the background of a war that shows no signs of abating. Spot gold remains rangebound on either side of USD 5,000/oz, trading in a USD 4,977.21-5,016.20/oz parameter at the time of writing. Spot silver trades in a USD 78.15-80.20/oz range.
• Base Metals are softer in a continuation of the recent pullback and amid the recent upticks in the Buck as oil prices continue to recover. Desks have been citing the sharp increase in exchange inventories as a factor for recent losses, whilst bullish positions against copper also fell. 3M LME copper trades in a narrow USD 12,642.70-12,803.05/t range.

The geopolitical landscape continues to weigh heavily on crude prices as tensions in the Middle East remain high, particularly with the confirmed death of Iran’s security chief. While crude futures are softer, the lack of new escalations is preventing a sharper decline. This backdrop leads to increased uncertainty in the oil market, consequently influencing precious metals like gold, which are currently fluctuating around the USD 5,000 mark, showcasing a complex interplay between war-driven demand and prevailing economic conditions.