Commodities weekly: Broad reversal led by energy, while copper and platinum stand tall

Risk assets responded positively: equity markets surged on growing optimism that the U.S. is inching closer to trade deals with China and other major partners, reviving the "risk-on" narrative. Gold, by contrast, continued to struggle. The yellow metal recorded its second consecutive weekly loss, as its traditional safe-haven appeal dimmed in the face of rising risk appetite and declining real yields. Despite a supportive macro backdrop for much of the year, gold has looked increasingly fatigued in recent weeks, failing to capitalize on news that would typically offer support. The protracted consolidation phase has now raised the risk of a deeper correction.

Silver and platinum also succumbed to profit-taking. Platinum, in particular, gave back some gains after a meteoric rally to a 14-year high, driven by tightening market conditions amid rising investor interest. While the longer-term outlook remains constructive, last week marked a natural pause in the rally, as traders locked in profits following an exceptional run.

Crude oil tumbles as geopolitical risk premium collapses

For a second consecutive week, the crude oil market dominated headlines, driven by heightened geopolitical tensions in the Middle East. A brief but sharp surge in the geopolitical risk premium—at one point adding nearly $15 to the price of a barrel—followed the outbreak of hostilities between Israel and Iran. Brent crude, the global benchmark, briefly topped $80 per barrel on Monday after President Trump backed a coordinated Israeli strike on Iran’s nuclear facilities.

However, the rally proved short-lived. Instead of targeting oil infrastructure or the important shipping lanes around the Strait of Hormuz, Iran responded by targeting an empty U.S. military installation in Qatar. An attack that was flagged well in advance to both the U.S. and Qatar, and which ultimately failed. The market interpreted the action as a deliberate move to de-escalate rather than escalate tensions, triggering the sharpest two-day sell-off in crude since 2022.

What followed was a U.S.-brokered ceasefire, which, while fragile, has so far held. With geopolitical fears fading, traders have refocused on market fundamentals, which continue to point to ample supply into the second half of the year. Production increases from a group of eight OPEC+ members are adding to the bearish narrative. The alliance is expected to agree at its 6 July meeting to raise output by another 411,000 barrels per day from August, bringing total announced increases in 2025 close to 1.8 million barrels per day.

This supply expansion comes at a time when the global macroeconomic outlook remains challenged—not least due to the ongoing fallout from Trump’s aggressive trade stance, which continues to dampen demand prospects and weigh on broader sentiment. That may, however, change—read: improve—next week, after Trump announced the signing of a deal with China on Wednesday and mentioned a potential upcoming deal with India and other major trading partners.

Copper leads industrial metal rally as supply squeeze deepens

The mentioned energy slump this week, allowed industrial metals to emerge as the standout performers in the commodity complex. The Bloomberg Commodity Industrial Metals Index rose 2.8%, led by copper, which has extended its stellar year-to-date rally to around 25% — cementing its place among the top-performing major commodities of 2025.

On the London Metal Exchange (LME), three-month copper futures are trading near multi-month highs between $9,800 and $10,000 per metric ton. In New York, COMEX High Grade copper is back above $5 per pound, rebounding after briefly hitting a record $5.37 in March amid a buying frenzy ahead of widely anticipated U.S. import tariffs.

The latest leg higher is being driven by a deepening supply squeeze in London. LME inventories have dropped sharply in recent weeks, with readily available stockpiles depleted by a surge in shipments to the U.S., where buyers rushed to secure material ahead of pending tariff measures. This drawdown has triggered a steep backwardation, with near-term contracts trading at a premium — a classic signal of tightening physical supply.

While the immediate rally reflects logistical disruptions and inventory dynamics, the broader outlook for copper remains firmly bullish. As the global economy accelerates its shift toward electrification, copper’s role as the most efficient industrial conductor is becoming increasingly vital. Demand tailwinds are emerging from AI-driven power demand, hyperscale data centers, EV rollouts, charging infrastructure, industrial reshoring in the U.S., and rising demand for cooling.

Copper stocks monitored by the three major futures exchanges have slumped to a 16-month low of 361 kt. Notably, COMEX has seen inventories rise for a 15th consecutive week to 188.6 kt, now holding more copper than the LME (91.3 kt) and SHFE (81.5 kt) combined — a first. Until the U.S. tariff announcement is made, the elevated price premium in New York over London may continue to see copper shipped to U.S. which accounts for less than 8% of global demand, exacerbating tightness in other regions, potentially keeping copper prices elevated despite economic headwinds curbing demand from traditional sources of demand towards construction.

Top-performing platinum surges to a 14-year high

The white metal—used in catalytic converters, industrial applications, jewellery, and on/off investment demand—had been stuck in a decade-long sideways trend, averaging around USD 950 an ounce since 2015. Over the same period, gold went from trading at a discount to more than triple in value, leaving platinum increasingly undervalued, relatively, and overlooked by investors. However, gold’s continued ascent eventually helped revive interest in platinum, particularly in China, where a growing number of consumers have turned to platinum coins, bars, and jewellery as a more affordable alternative.

The breakout began in earnest in late May during this year’s Platinum Week in London, as sentiment among market participants—ranging from analysts and institutional investors to end-users—shifted decisively. The bullish tone was reinforced by a key update from the World Platinum Investment Council (WPIC), which highlighted a worsening supply-demand imbalance.

Following a record deficit of 992,000 ounces in 2024, WPIC now forecasts a 966,000-ounce shortfall in 2025—marking the third consecutive annual deficit and underscoring the continued depletion of above-ground inventories, which are now estimated to cover just three months of demand. The Council warns these stock levels are approaching "unsustainably low" territory, raising concerns over supply security going forward. Traders jumped into the trade, and once the 17-year-old downtrend from 2008 got broken, the metal was no longer overlooked.

With sentiment flipping, inventories tightening, and demand rising—particularly in Asia—platinum appears to be shedding its long-standing underdog status, potentially paving the way for further gains in the second half of the year, especially if gold springs back to life following a period of consolidation which so far has lasted around ten weeks. While speculators have helped fuel the rally, buying 350k oz since 20 May, ETF investors have remained largely on the sidelines. Apart from a brief pickup in interest earlier this month, total holdings are flat on the year and up just 35,000 oz since the mentioned date.

Grain markets retreat on crop optimism and harvest pressure

Weather developments remain the key source of directional inspiration for grains traders, with the important growing season now well underway across the Northern Hemisphere. Following an early June scare, favourable weather in the US and elsewhere—combined with expectations of record Brazilian crops—has since been weighing on prices, driving the Bloomberg Commodity Grains Index towards a weekly loss of 5%. Corn and soybeans are lingering near multi-month lows, while ongoing winter wheat harvest pressure has pushed Kansas and Chicago wheat contracts down by more than 7% this week.

After a hot and dry period earlier this season, improved weather conditions across Europe, Russia, and now also the US have lifted prospects for another bumper wheat crop. In response, the International Grains Council (IGC) has raised its 2025–26 world wheat crop outlook by 2 million tonnes to 808 million. Focus now turns to Monday’s Crop Progress and quarterly Stocks Report from the US Department of Agriculture (USDA), which could provide further direction for price action heading into the new trading week.