Commodities Wrap: Gold Falls Below US$4,050 as Oil Firms and Natural Gas Slides
Gold fell and natural gas dropped sharply on Monday while crude oil firmed, as an easing of risk aversion pulled safe-haven metals lower even as a lingering regional risk premium kept a bid under oil.
Gold and precious metals
Gold settled Monday at 4,031.10 dollars an ounce on the COMEX August contract, down 1.59 percent from Friday’s 4,096.30, as the broad risk-on tone across equities and a steadier geopolitical backdrop weighed on the metal, though it held above the 4,000-dollar level. Silver settled at 58.31 dollars an ounce, down 1.54 percent from 59.22, in line with gold’s pullback as the day’s improved risk appetite reduced demand for safe havens.
Oil
Crude firmed as the market kept a residual risk premium tied to the Strait of Hormuz even as diplomacy advanced. US West Texas Intermediate settled at 70.48 dollars a barrel on the August contract, up 1.81 percent from Friday’s 69.23, while ICE Brent rose 1.19 percent to 72.85 dollars from 71.99. The gains pushed oil back above last week’s lows, with the pace of any agreement and the security of shipping through the strait the key swing factors for the supply-risk premium.
Natural gas and metals
US natural gas was the day’s biggest decliner, settling at 3.171 dollars per million British thermal units on the August contract, down 3.29 percent from 3.279, on softer demand and supply dynamics. Copper, a barometer of industrial demand, eased 0.59 percent to 6.108 dollars a pound from 6.144, a modest move that left the red metal broadly steady.
Why it matters
The split between firmer oil and weaker gold captures the cross-currents in the region. For Gulf exporters, firmer crude is supportive for oil revenue and fiscal balances, though gains driven by security and shipping risk are less clearly positive than demand-led moves. Lower gold and silver reflect the day’s steadier risk mood, consistent with the rally in US and Asian equities, suggesting investors leaned toward de-escalation. For energy-importing economies in the region, the level of oil prices remains the key variable for import bills and inflation, while lower natural gas is a modest relief for power and industrial costs.
Outlook
The near-term path depends on whether regional diplomacy holds and shipping through the Strait of Hormuz stays uninterrupted, which would cap the oil risk premium, and on the outlook for interest rates and the dollar, which drive gold. A durable de-escalation would tend to soften oil and keep pressure on safe-haven metals, while any renewed disruption would quickly rebuild the supply-risk premium in crude and revive demand for gold.
Summary table
| Commodity (Mon 29 Jun settlement) | Price | Change |
|---|---|---|
| Gold (COMEX Aug) | US$4,031.10 /oz | -1.59% |
| Silver (COMEX Jul) | US$58.31 /oz | -1.54% |
| WTI Crude (Aug) | US$70.48 /bbl | +1.81% |
| Brent Crude (Aug) | US$72.85 /bbl | +1.19% |
| Natural Gas (Aug) | US$3.171 /MMBtu | -3.29% |
| Copper (Jul) | US$6.108 /lb | -0.59% |
Sources: CNBC.
