Commodities weekly: ags and energy steady the ship; metals lag as Powell looms

Energy: oil finds a floor for now

Oil prices rebounded this week after weeks of pressure, with Brent crude up 2.7% and WTI gaining 2.5%. The recovery was driven by technical support levels holding near USD 65 for Brent and USD 62 for WTI, which spurred short covering. Fundamentals also provided tailwinds: the US reported a larger-than-expected crude stock draw, driven by exports and refinery runs at their strongest pace since 2019.

Geopolitics remain an additional factor. While an OPEC+ production hike continues to hang over the market as a price-negative force, the fading likelihood of a Russia–Ukraine peace deal has shifted focus back toward the expansion of US secondary sanctions on buyers of Russian oil. India, which accounts for around one-third of Russia’s crude exports, is particularly exposed to tighter enforcement, raising the potential for supply chain disruptions.

Still, the market is not without headwinds, especially considering an ongoing OPEC+ supply increase and a seasonal weakening in gasoline demand. For now, however, the technical resilience at recent lows, potential disruptions to Russian exports, and the first ever recorded net short position held by speculators in ICE and CME WTI futures contracts combined have all supported a rebound but in our opinion not a sustained recovery. 

Precious metals: gold coils ahead of Powell

Gold remains trapped in a narrowing range defined by its key moving averages, with traders unwilling to commit ahead of Powell’s speech. At USD 3,346 the 50-day average offers resistance, while support sits at USD 3,316 from the 100-day. With volatility compressed, the stage is set for a breakout.

The direction of the break is likely to depend on Powell’s tone. A dovish lean, hinting at tolerance for slower disinflation or concern about growth risks, would likely weaken the dollar and yields, giving gold a chance to push higher through the USD 3,350 area. Conversely, a reaffirmation of higher-for-longer could send gold back through support levels, testing the conviction of ETF investors who in recent weeks increased total holdings to a two-year high before some light selling emerged this week. 

Silver, meanwhile, remains confined to a somewhat wider range, with traders eyeing a potential bounce if gold breaks higher. For now, a broad one-dollar band of resistance ahead of USD 40 remains firm with a rising support trendline offering support around USD 36.75. Platinum managed a small weekly gain, having settled into a USD 1,300 to 1,375 range as it continues to consolidate following a May to July surge which took it to the top of the performance table, with a year-to-date gain of 50%.

Agriculture: coffee dominates, grains supported by short covering

The agriculture sector enjoyed a strong week, led decisively by coffee. Arabica futures surged 10.5% to extend a month-long rally now totaling 27%. Weather risks in Brazil remain the key driver, with frost concerns and erratic rainfall threatening output. At the same time, the flow of beans to the US has been curtailed by import tariffs imposed by the Trump administration, tightening deliverable supply in the US market where the futures contract is traded.

Elsewhere, grains saw firmer prices led by corn which bounced from near five-year lows after fresh export demand drove short covering. However, the prospect for a sustained recovery remains challenged by a bumper U.S. crop which earlier this week led the International Grains Council to raise its global corn crop forecast to a record 1.299 billion tons, a 23 million tons increase on previous estimates. Elsewhere, soybeans traded higher for a second week, supported by a recent downgrade to the U.S. production. Wheat futures in Chicago and Paris traded marginally higher after recent price slumps triggered demand from Egypt and other key buyers. Overall, the world wheat production for 2025-26 is set to remain near record levels, underpinned by strong yields in several key producing countries.

Industrial metals: struggling for traction

Industrial metals were the laggard this week, with the sector down 1% overall. Copper, aluminum, zinc, and nickel all lost ground, hit by a combination of dollar strength and weak demand signals from China, particularly in the property sector. Softening time spreads highlight looseness in the near-term market, while inventories have crept higher.

Copper remains particularly sensitive to the macro backdrop. While long-term demand from electrification and grid investment remains supportive, short-term fundamentals are uninspiring. For now, the sector remains pressured by Chinese and potentially also U.S. growth concerns, and a major overhang of copper at COMEX monitored warehouses that in recent months were shipped to the U.S. ahead of an expected tariff announcement that never came. 

After hitting a low point back in June, copper stocks held at warehouses monitored by the three major futures exchanges in London, Shanghai and New York, have since seen a steady increase to 484.5 kt, with the most interesting development being the continued flow of copper to COMEX warehouses, lifting the total to an all-time high at 246.5 kt, meaning 51% of the total is now held within the U.S., a country that accounts for only around 5-6% of global demand.

Outlook

As the week closes, all eyes remain on Jackson Hole and the tone of Powell’s messaging which will likely impact the commodity landscape. A dovish tilt could reinvigorate gold and silver, ease pressure on industrial metals, and bolster risk appetite more broadly. Conversely, a reaffirmation of a slower rate-cutting cycle risks reinforcing dollar strength, capping metals and weighing on agriculture demand.

Crude oil remains in a fragile balance, caught between short-term bullish drivers such as US stock draws and sanctions risk, and medium-term bearish overhangs from OPEC+ supply and seasonal demand softness. Agriculture is supported by Brazil-driven volatility in coffee, steady grain demand, and firm cattle prices, but weather risks remain the key swing factor.

In short, the commodity market heads into September finely poised. Agriculture and energy currently provide support, precious metals are waiting for a breakout catalyst, and industrial metals are still struggling. The macro overlay remains dominant, with Powell’s words today likely to echo across all sectors in the weeks to come.