Commodities Daily - May 28, 2019

> Oil ticks higher as Middle East tensions come back into focus amid mild risk-on sentiment. This morning, investors are digesting Trump's surprisingly dovish comments on Iran and the possibility for a nuclear deal. The apparent ease in Middle East tensions sent Brent below $70/bbl, where it continues to trade. Today, we expect Brent to track the FTSE 100 and S&P 500 (both back from holidays) and see it fluctuating around $70/bbl. We note that after finding support at its 100-day moving average last week, Brent has climbed above its 200-day average, which stands at $69.04/bbl today (a major support level), and is targeting the 50-day average of $70.61/bbl.> Gold trading sideways despite dollar strengthening. A lack of news from the US and UK yesterday contributed to a drop in trading volumes. News that the EC could launch disciplinary proceedings against Italy did not cause a significant move in EUR/USD, which has fallen only slightly. This week, the main event for gold will be the release of 1Q19 US GDP data. We expect gold to stay in the $1,280-1,285/oz range today.> Base metals trading mixed. Zinc climbed 0.6% this morning following the release of ILZSG data for March. Copper was trading flat, while nickel and lead eased slightly. Industrial profits in China released yesterday indicated a slowdown in the Chinese economy. On Friday, the Chinese manufacturing PMI for May will be an important event for the market.