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Comex Gold August futures fell below $3,300 per ounce on Friday, slipped to 4-week low amid receding geopolitical risks and a notable easing of trade tensions between the US and China and the ceasefire between Israel and Iran have diminished geopolitical risk.. The two nations have finalized their "London trade deal," which operationalizes the Geneva consensus, committing China to approve export applications for controlled goods while the US lifts various trade restrictions. Further alleviating trade concerns, the White House downplayed the urgency of upcoming tariff deadlines, hinting at potential extensions. Meanwhile, investors continue to assess the Fed’s interest rate outlook as Trump may announce his Fed Chair nominee as early as September or October, potentially favoring a candidate advocating for looser monetary conditions. The market now awaits today’s PCE inflation report, with gold poised for its second consecutive weekly decline.

WTI crude oil futures climbed for a third consecutive session, trading above $65.70 per barrel on Friday but poised for its most significant weekly decline since March 2023. This follows a ceasefire announcement between Israel and Iran, which calmed initial market fears of substantial supply disruptions. Earlier in the week, prices surged after US actions against Iranian nuclear sites, only to ease after Trump announced the ceasefire. While Trump has sent mixed signals regarding the effectiveness of US sanctions on Iran's oil revenues, admitting China's continued purchases, other factors are offering support. Strong US summer driving season demand is depleting crude inventories to an 11-year seasonal low, and a weaker dollar is cushioning losses. Investors are now keenly awaiting developments in US-China trade talks and the upcoming July 6 OPEC meeting.

LME base metals slipped after a strong prior session, with all metals trading lower on Friday. Copper eased 0.58% to $9,842/ton but remains on track for its best weekly gain since April, driven by a deepening supply squeeze on the LME. Spot premiums and near-term spreads have surged as traders rush to redirect shipments to the U.S. ahead of potential tariffs, depleting inventories on the LME and in China. The one-day contract premium spiked to $98/ton, which was the highest since the 2021 short squeeze before easing to $45/ton. Chinese smelters are boosting exports to meet LME delivery obligations, further straining global supply.

European natural gas futures are set for their most significant weekly drop in nearly two years and marking the sixth consecutive daily fall as geopolitical concerns in the Middle East have subsided. This represents the largest weekly loss since July 2023. The sharp decline follows a sudden ceasefire between Iran and Israel, brokered by US President Donald Trump. This de-escalation alleviated fears of disruptions to the Strait of Hormuz, a crucial choke point for a fifth of global liquefied natural gas (LNG) trade. Prior to the ceasefire, the brief conflict had driven energy prices higher for two weeks, with potential disruptions threatening Europe's LNG imports from Qatar, which comprise about 10% of its total.

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