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Gold retreats on profit-taking after two-day rally; Silver weakens, Crude oil holds geopolitical premium

Gold slipped below $5,030/oz while silver fall 2% to trade near $82 on Tuesday as investors locked in gains after prices touched a one-week high in the prior session. Attention has turned to upcoming US macro releases—most notably nonfarm payrolls and inflation data—which will guide expectations for the Federal Reserve’s policy trajectory. Comments from White House economic adviser Kevin Hassett suggesting slower job growth amid demographic headwinds have reinforced views that labormarket momentum may cool. Markets are pricing at least two Fed rate cuts this year, sustaining expectations of easier financial conditions that remain favorable for bullion. Official-sector demand continues to provide a firm base, with the People’s Bank of China extending gold purchases for a fifteenth straight month in January. Meanwhile, persistent geopolitical risk supports safe-haven flows, as US–Iran tensions linger despite tentative diplomatic signals. Near-term volatility is likely around data releases, but a softer policy bias, steady central-bank buying, and ongoing geopolitical risk keep the medium-term bias constructive for gold.

WTI crude eased modestly on Tuesday, trading near $64.25/bbl, as markets reassessed geopolitical supply risks after U.S. maritime guidance heightened focus on the Strait of Hormuz. The pullback follows a 1%+ rally on Monday, triggered by U.S. advisories urging vessels to avoid Iranian waters amid renewed Washington–Tehran friction. With nearly 20% of global oil flows moving through Hormuz, even limited escalation carries outsized supply implications, particularly for Asia-bound exports from Iran and key Gulf producers. While Oman-mediated nuclear talks struck a cautiously positive tone, uncertainty around sanctions enforcement and regional security continues to support a mild risk premium. Further adding to supply-side complexity, the EU is considering expanding Russian oil sanctions to third-country ports, while India’s IOC has diversified crude purchases away from Russia toward West Africa and the Middle East. Near-term prices should stay range-bound, supported by geopolitical risk and shifting trade flows, but capped by ample non-OPEC supply and fragile demand momentum.

Copper extended losses as rising inventories across the LME, SHFE and COMEX reinforced concerns over near-term demand, particularly in China where buying interest from fabricators has slowed ahead of the holiday period. The red metal is on track for a weaker weekly close, weighed down by softer spot activity, a stronger U.S. dollar and easing premiums between COMEX and LME contracts, which have reduced incentives for metal flows to the US. Despite recent dip-buying, sentiment remains cautious as stockpiles continue to build and high prices curb physical demand. That said, underlying demand signals remain constructive, supported by strong investment plans from China’s State Grid in ultra-high voltage and energy infrastructure projects, which could provide medium-term support for copper consumption once seasonal demand normalises. US natural gas futures are trading modestly lower near $3.5 per MMBtu, snapping a three-session advance as the latest storage data and weather outlook eased supply concerns. The EIA reported a record 360 bcf withdrawal for the week ended January 30—well above last year and the five-year average, but short of expectations for a 374 bcf draw. Forecasts now point to warmer temperatures and softer heating demand after last week’s Arctic blast. Lower 48 production has rebounded to around 106.6 bcfd, while LNG exports remain robust near 18.4 bcfd. Near-term prices may stay range-bound as improving supply and milder weather offset still-tight inventories.

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