Commodities Daily - October 9, 2019

> Oil slides as trade tensions escalate ahead of high-level US-China talks; EIA inventory report eyed. Investors are now positioning themselves for today's EIA inventory data. The Bloomberg consensus is for a 1.9 mln bbl build in crude inventories, a 0.9 mln bbl draw in gasoline stocks and a 2 mln bbl decrease in distillate stockpiles. As was the case with the API report, we expect bullish refined product data to outweigh any negative outcome in the crude oil category, likely pushing Brent toward $59/bbl, assuming there are no unexpected events that shake sentiment.> Gold moves higher again and is nearing the $1,511/oz mark. Yesterday, Jerome Powell surprised the market by saying that the Fed will begin purchasing short-term Treasuries. Demand for gold was also fueled by weak macro data from the US and further tension between Washington and Beijing. Today, the market will focus on a speech by Powell (18:00 Moscow time), the minutes from the last Fed meeting (21:00) and US wholesale inventories. We think gold could approach $1,520/oz if political news flow remains negative.