Commodities Daily - July 1, 2019

> Oil pares losses following G20 amid likely nine-month OPEC+ deal extension and pause in US-China trade war. After Saturday's upbeat G20 developments, we think Brent is set to target the $70/bbl mark this month, with ample technical resistance levels (moving averages and Fibonacci retracements) along the way. Today we think the rally could stick within the $67.5-68/bbl range.> Gold sliding rapidly amid G20 news and political uncertainty in the EU. This morning, gold reached $1,383/oz, down almost 2% from Friday's close. Risk-on sentiment has risen sharply, pressuring gold, while EUR/USD is retreating. Investment demand for gold remains high, with open long positions on COMEX increasing by 17% last week. We expect gold to trade sideways today at just above $1,380/oz.> Base metals climbing higher this morning despite weak Chinese PMI data. The biggest gains this morning have come from copper (+1.0%), zinc (+0.9%) and aluminum (+0.5%). Although the mood in the base metals markets has been relatively upbeat following the announcement of the trade cease-fire this weekend, the optimism has been more restrained than it was shortly after the US and China announced a similar trade truce last December.