Commodities weekly: Metals lead, crude heavy, ags under pressure

The first week of September traditionally marks the return of liquidity as market activity picks up following the US Labor Day holiday and the August slowdown. This year has started on a mixed note: key equity benchmarks are at record highs, long-end bond yields are rising globally, while US data points to emerging softness that could be reinforced by today’s jobs report. In China, recent releases suggest a tentative recovery, but the picture remains uneven, with equity markets lifted mainly by policy support and optimism around AI and technology.

US indicators have highlighted weakness, fuelling a build-up in Federal Reserve rate cut expectations. The US yield curve shows signs of a bull steepening, with front-end yields easing on the prospect of earlier and deeper cuts, while long-dated yields remain sticky on inflation and fiscal concerns. That mix is supportive for non-yielding assets such as gold but raises questions for risk appetite more broadly.

Today’s US jobs report, especially the nonfarm payrolls print is pivotal. A softer print would reinforce the slowing growth and policy easing narrative, while a stronger outcome could undercut the recent metals rally. Either way, the labour data has the potential to set the near-term tone not just for rates but for the broader commodity complex.

Geopolitics: signals from Beijing

In Beijing, President Xi Jinping gathered world leaders who share frustration with US policy, including Putin and India's Narendra Modi. The optics alone serve as a reminder of a more fragmented global order, with implications for trade flows, reserve diversification, and strategic alignment.

Geopolitical risks are increasingly shaping commodity markets, with resources used as leverage in strategic disputes. This raises the prospect of supply disruptions and sudden price spikes. The impact typically emerges through two channels: stronger safe-haven demand, particularly for gold, and shifts in supply chains as sanctions and tariffs are imposed or circumvented. The ability of major producers and consumers to work around US-led restrictions could alter flows in oil, gas, and industrial metals in the months ahead.

Fed independence risks a major focus

The bullish narrative in investment metals, which this past week drove gold to a fresh record and lifted silver above USD 40 for the first time in 14 years, is not solely about rate cuts and geopolitics. Governance concerns have added a premium, with President Trump’s repeated attacks on Fed Chair Powell and his recent attempt to remove Governor Lisa Cook raising fresh doubts about Fed independence. That independence is viewed as crucial for safeguarding economic stability, controlling inflation, and maintaining global market confidence—a concern that gold and other investment metals naturally absorb as a hedge against political interference.

Our latest views and updates on gold, silver and crude oil:

Gold breaks to record as investors seek alternatives in a fractured world
Silver powers past USD 40 to 14-year highs
OPEC+ supply expansion and Russia’s export woes keep crude rangebound

Other commodities in brief

US natural gas futures rose for a second week, recovering from an 11-month low to trade above USD 3 per therm. Support came from rising LNG exports and signs of moderating production, with the weekly rig count showing no increase over the past month. These developments have helped offset healthy storage levels, currently 5.6% above the five-year average.

Copper in London briefly traded back above USD 10,000 to a five-month high before retreating amid limited follow-through from traders and speculators. The broader outlook remains supportive, with focus on China and potential government initiatives to stimulate growth. A short-term concern is the continued build-up of copper in US COMEX warehouses, which now hold a record 53.4% of all monitored exchange stocks. Given that the US accounts for only around 6% of global demand, the tariff-driven flows risk reversing, potentially adding supply back into the global market where London sets the benchmark price.

Wheat futures in Chicago and Paris, tracking new-crop prices for December delivery, remain stuck near multi-year lows amid ample global supply and stiff export competition. Pressure comes from large harvests in Russia, Ukraine, and parts of Europe, while Australia’s crop is also expected to be well above average

Chicago soybeans slipped back after an August rebound that had been driven by expectations of a smaller US crop and hopes of progress in US-China trade talks. This week’s gathering of non-Western leaders in Beijing instead underscored the rivalry between the two nations, with tariffs continuing to curb Chinese demand for new-crop US shipments and weighing on prices.

The week ahead in commodities

Sunday
• OPEC+ (eight nations) meet online to assess oil markets
Tuesday
• Asia Pacific Petroleum Conference (APPEC) in Singapore runs through to Friday
• EIA publishes monthly Short-Term Energy Outlook (STEO)
Wednesday
• EIA weekly crude and fuel stock report
Thursday
• IEA monthly Oil Market Report (OMR)
• OPEC monthly Oil Market Report (MOMR)
• EIA weekly natural gas storage change
Friday
• USDA World Agricultural Supply and Demand Estimates (WASDE)
• CFTC weekly Commitments of Traders (COT) report on speculative positions

This content is marketing material and should not be regarded as investment advice. Trading financial instruments carries risks and historic performance is not a guarantee of future results.
The instrument(s) referenced in this content may be issued by a partner, from whom Saxo receives promotional fees, payment or retrocessions. While Saxo may receive compensation from these partnerships, all content is created with the aim of providing clients with valuable information and options..