Overview: Commodities Markets in Wait-and-See Mode

Commodities markets exhibited a cautious tone on Tuesday, August 6, 2025, as oil prices slipped while gold held firm near a two-week high. With traders closely monitoring signals from the Federal Reserve and upcoming inflation data, both energy and precious metals markets entered a consolidation phase, reflecting uncertainty around monetary policy direction, supply dynamics, and geopolitical tensions.

Brent crude fell to $84.03 per barrel, down 1.7%, while WTI crude hovered around $80.55. Meanwhile, spot gold traded at $2,069 per ounce, its highest level since late July, supported by expectations of a Fed rate cut in September.

Oil Retreats Amid Mixed Supply and Demand Signals

Oil prices pulled back from recent highs on Tuesday as traders recalibrated their positions following a mixed bag of supply and demand developments. While geopolitical risks and OPEC+ production limits continue to provide underlying support, bearish signals from Chinese and U.S. economic indicators have raised demand concerns.

Key Factors Impacting Oil Today:

• U.S. Factory Data: Monday’s disappointing factory orders data heightened fears of slowing industrial activity and weaker fuel demand.

• China’s Economy: Ongoing signs of a sluggish recovery in China, the world’s largest importer of crude, are putting pressure on oil bulls. Analysts expect Beijing to unveil more stimulus measures soon, but confidence remains fragile.

• OPEC+ Supply Strategy: While Saudi Arabia and Russia have reaffirmed voluntary production cuts through September, overall OPEC output slightly increased in July, according to tanker tracking data.

• Inventories Watch: U.S. API inventory data due later today could influence short-term price direction. Analysts anticipate a draw of 2.1 million barrels.

Despite today’s weakness, energy analysts believe crude prices remain range-bound between $78 and $86 for the time being, with any shifts likely driven by macro catalysts such as the Fed and China.

 Gold Holds Firm as Rate Cut Bets Solidify

Gold prices remained resilient on Tuesday, hovering just below $2,070 per ounce as expectations for a September interest rate cut by the Federal Reserve strengthened. With U.S. Treasury yields falling to their lowest in two months and real yields retreating, non-yielding assets like gold have become more attractive to institutional investors.

Why Gold Is Strong Today:

• Dovish Fed Outlook: Fed Fund Futures now price in a 94% chance of a rate cut at the next meeting. Mary Daly of the San Francisco Fed reinforced this view with cautious comments on economic “softness.”

• Weaker U.S. Dollar: The U.S. dollar index weakened slightly, making gold cheaper for holders of other currencies.

• Safe-Haven Demand: Ongoing trade tensions (U.S.–EU, U.S.–India), combined with global political instability, have increased gold’s appeal as a hedge asset.

• ETF Flows: Gold-backed exchange-traded funds saw net inflows for the fourth consecutive day, signaling renewed interest from passive investors.

Gold bulls are now eyeing resistance at $2,085, while technical analysts point to $2,050 as a key support level.

 Copper, Silver and Other Metals Mixed on Macro Uncertainty

The broader metals complex saw mixed action:

• Copper: Prices eased slightly to $3.91 per pound on concerns over slowing Chinese construction demand.

• Silver: Extended gains to $27.45/oz, riding on gold’s coattails and industrial usage hopes.

• Platinum: Edged up 0.5% to $1,003/oz, with tight supply conditions offsetting weak vehicle production data.

Traders are adopting a cautious stance ahead of Thursday’s U.S. inflation data release, which could set the tone for the metals market through mid-August.

 Risks Ahead: Fed Policy, China Stimulus, and Energy Inventories

The key to commodities’ next move lies in a few upcoming events:

1. U.S. CPI Inflation Data (Aug 8): Any upside surprise could dampen hopes for a Fed cut, pressuring gold and metals.

2. China’s Trade Data: Sluggish exports or stimulus inaction could weigh on copper and oil sentiment.

3. U.S. Crude Inventory Data (API and EIA): A surprise build could push crude below $80.

In the background, escalating global trade tensions may continue to shape investor risk appetite. The energy and metals markets remain highly sensitive to any signals that alter the inflation-growth narrative.

 ForexFlash Outlook: Consolidation with Upside Bias

Despite today’s pullback in oil and cautious gold movement, the broader commodity complex remains supported by a shifting macro backdrop. With rate cuts expected and inflation moderating, safe-haven and inflation-sensitive assets like gold may continue to outperform. Oil’s path will likely be more volatile, hinging on physical inventory trends and China’s demand rebound.