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Comex Gold August futures fell for a third consecutive day, reaching a new one-week low below $3,360 per ounce. This decline marks gold's first weekly fall this month, primarily driven by technical trading rather than economic news. A slight de-escalation of Middle East geopolitical tensions has reduced safe-haven demand for gold. Concurrently, a Federal Reserve inflation warning has diminished the likelihood of multiple rate cuts this year. Although the Fed held rates steady and projected two cuts by year-end, Chair Jerome Powell cautioned that tariffs could continue to fuel inflation. Fresh Fed forecasts also indicate weaker growth, higher inflation, and lower employment in 2025. Investors are also closely monitoring the White House as President Donald Trump weighs direct military action against Iran, with a decision anticipated within two weeks.

WTI crude oil futures dipped to $72.5/barrel on Friday, yet remain poised for a third consecutive weekly gain amidst escalating Middle East tensions. Ongoing strikes between Israel and Iran are fueling supply disruption fears, with Israel intensifying attacks on Tehran. Today’s slump in crude prices followed President Trump's signaling a decision on striking Iran within two weeks, easing immediate concerns of a US attack. Despite this, senior US officials are reportedly preparing for a potential strike, indicating an evolving situation. While Israel continues to target Iran's nuclear facilities, the country's crude-exporting infrastructure remains intact. However, signs suggest Iran is expediting crude exports, with storage tanks at the Kharg Island terminal nearing capacity. The primary market concern revolves around the Strait of Hormuz, through which a fifth of global crude passes. Currently, there are no indications that Tehran intends to disrupt shipping in this critical waterway.

Base metals extended their declines, with the exception of copper, amid limited risk appetite as traders assessed the geopolitical situation and digested the recent FOMC economic projections. Copper found support from a declining volume of metal in LME warehouses, pushing the LME copper cash to 3-month forward spread into steep backwardation. Additionally, markets experienced a temporary sense of relief after fears of immediate escalation eased, following Trump’s indication that a decision on whether to strike Iran would be made within two weeks. Metals are expected to remain range bound ahead of a data-packed week, as traders await key releases including US GDP, Core PCE, and flash PMI numbers from major global economies.

US natural gas prices extended their winning streak for a fifth consecutive session, climbing 2.23% to $4.078/mmbtu on Nymex driven by forecasts of intense heat across the eastern half of the country, anticipating a significant boost in cooling demand. Today's EIA report indicated a 95 bcf increase in natural gas inventories for the week ending June 13, largely aligning with the median analyst estimate of +97 bcf. Despite minor overnight shifts to cooler forecasts for the Northeast and Midwest, weather models show hotter trends for the South and Interior West. The overall outlook points to a major heatwave across the eastern US in the first half of next week. Total stockpiles now stand at 2.802 tcf, maintaining a 6.1% surplus over the five-year average.

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