[MARKET ANALYSIS] Crude on the backfoot as attention returns to Ukraine, XAU at another ATH

• Crude curtailed by a pickup in the USD and after the geopolitical remarks re. Ukraine on Tuesday.
• US Envoy Witkoff, on Tuesday, said that discussions with Russian counterpart Dmitriev were "very positive". A remark that seemingly sparked a bout of pressure in Crude, causing the benchmarks to drift into the early APAC session before stabilising and then dipping once again to troughs of USD 59.22/bbl and USD 63.61/bbl for WTI and Brent, respectively.
• Currently, the complex holds around USD 0.60/bbl off those lows, but remains in the red by around USD 0.50/bbl on the session.
• Ahead, we await any geopolitical update from Davos with POTUS in attendance.
• A familiar story for spot gold, at another ATH of USD 4888/oz. The narrative for the yellow metal is much the same as in recent sessions.
• Base peers in the green, 3M LME Copper firmer by over 1%. Action spurred by the stabilisation of the risk tone seen in some regions overnight and amid gains in China, though the region's strength lacked a specific fundamental driver.

Crude prices are under pressure as the strengthening USD and positive remarks regarding US-Russia discussions weigh on sentiment, with WTI and Brent benchmarks hitting recent lows. This geopolitical backdrop is crucial as ongoing tensions impact energy prices, while the recent fresh highs in gold suggest a flight to safety amid uncertainties. Traders should closely monitor any developments from Davos, particularly statements from the US President that could further influence market dynamics.