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Comex gold futures are currently trading in a narrow range near $3,410 per ounce, with investors closely monitoring Middle East hostilities. Recent reports suggest Israeli strikes may have delayed Iran's nuclear program by several months. Earlier, President Trump's comments downplaying a ceasefire had fueled safe-haven demand. Gold advanced almost 4% last week following Israel's military campaign against Iran, sparking regional conflict fears and intensifying a rally already driven by global economic growth threats from Trump's tariff agenda. Price gains have since moderated despite ongoing strikes. On the economic front, market participants await today's US retail sales and industrial production data to assess economic strength. Attention also centers on the Federal Reserve's policy meeting on Wednesday, with markets keen for signals on potential rate cuts, as the Fed is widely expected to hold rates steady.

WTI crude oil is trading above $71.1/barrel Tuesday after it slipped to $69.5 earlier amidst escalating Middle East tensions, driven by Trump's rhetoric regarding the Israel-Iran conflict and market anxieties over potential supply disruptions. While Iran indicates de-escalation, Israeli attacks, notably on nuclear sites, persist. Trump's social media warning for Tehran residents and his G7 departure underscore the seriousness. Geopolitical risks heightened by reports from the UK Navy detailing increasing navigation signal interference in the Strait of Hormuz and Persian Gulf, leading to ship-owner reluctance for bookings due to safety concerns. The market remains acutely focused on the Strait of Hormuz for any signs of disruption, despite a recent fire in the vicinity being deemed non-security related.

LME base metals trades on a mixed note, with aluminium being the only gainer, edging up 0.14% to $2,516/ton, while copper eased amid cautious sentiment ahead of the U.S. Federal Reserve’s rate decision. Although the Fed expected to keep rates unchanged, markets are closely watching for forward guidance, especially as inflation concerns resurface on the back of rising oil prices. Trade-related uncertainties and geopolitical tensions intensified by U.S. President Trump's early departure from the G7 summit and call for a full evacuation of Tehran, have further dampened investor sentiment. Meanwhile, copper markets are witnessing a notable squeeze, with spot prices on the LME spiking due to tightening inventories and strong demand for available warehouse stocks.

European natural gas prices up 1.8% due to concerns over a potential escalation in the Israel-Iran conflict, threatening global energy supplies. Benchmark futures saw a 1.8% increase amidst volatile trading. While Europe's current gas supply appears stable, its dependence on global liquefied natural gas (LNG) flows makes prices susceptible to geopolitical risks. The continent needs significant LNG imports in the coming months to replenish depleted stockpiles. A major concern is Iran's potential to blockade the Strait of Hormuz, which could disrupt LNG shipments from Qatar and oil supplies. Additionally, traders are observing the EU's proposed ban on Russian gas and LNG imports by 2027, currently accounting for 13% of the region's imports.

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