Commodity Research - Morning Insight - 10 June 2025 - Kotak Securities Ltd
Bullion
Comex gold futures ended a two-session losing streak, closing higher near $3,355 per ounce as the U.S. dollar softened amid optimism over easing US-China trade tensions dampened safehaven demand. Comex silver extended its rally, settling 1.82% higher at $36.80 per ounce—its highest level in 13 years—supported by strong industrial demand and increased ETF inflows, with holdings hitting a two-year high last week. High-level trade negotiations resumed in London, with reports, indicating Trump has authorized Treasury Secretary Scott Bessent to explore easing restrictions on certain Chinese imports, aiming to secure a rare earth minerals deal. Gold prices also drew support from continued buying by China’s central bank, to its reserves in May—marking seven consecutive months of accumulation. Today, gold edged lower below $3,325 as traders tracked the progress of US-China trade talks, with both sides signaling a willingness to make concessions. Markets now await key U.S. inflation and sentiment data later this week.
Crude Oil
WTI crude oil surged to a two-month high of over $65 per barrel, buoyed by optimism surrounding high-level US-China trade talks in London aimed at resolving the ongoing trade war. Adding to the bullish sentiment are seasonal peak summer demand in the US and escalating geopolitical tensions between Russia and Ukraine. Over the weekend, Russia launched its largest drone assault since the war began, targeting Kharkiv, Ukraine’s secondlargest city. Today, crude oil hold gains above $65.6, as US-China trade talks in London, deemed "fruitful" by Commerce Secretary Lutnick and a "good meeting" by Treasury Secretary Bessent, extended into a second day. However, OPEC+ decision to increase oil production and potential US sanctions relief on Iran's crude following nuclear deal talks could cap the rise in oil prices.
Natural Gas
Nymex Henry Hub natural gas fell over 4.4% to $3.11 per mmBtu on Monday, following a 9% rally last week as warmerthan-expected mid-June weather forecasts offset reduced LNG export flows and high storage levels.
Base metals
LME base metals kicked off the week on a mixed note, with copper and aluminium rising over 1%, while zinc ended lower. Copper surged to a near two-month high, settling at $9,793/ton, driven by renewed optimism surrounding US-China trade negotiations. Significant supply concerns, including disruptions at South American and African mines, were exacerbated by a 10,000- ton drawdown in LME inventories—the largest since 2022. This tightening supply, coupled with potential US tech export ease for China's rare earth access, continues to bolster the metals complex despite recent soft economic data. LME metals are trading lower as markets keep a close watch on the ongoing U.S.-China trade talks and await President Trump’s speech later today.
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