Commodities Daily - September 19, 2019

> Oil ticks lower on bearish EIA report amid Saudi pledge to quickly restore production. For the rest of this week, all eyes will be on the political consequences of Saturday's attack on Saudi oil facilities. Yesterday, Donald Trump promised to provide details on new sanctions on Iran within 48 hours, highlighting that there were still many options apart from going to war. Iran's president, meanwhile, said that his country does not want conflict. Amid this backdrop, we think Brent will continue to trade within the $63-64/bbl corridor for the rest of the day today. While there is upside given the potential for military actions against Iran, we do not see a military response as likely at the moment.> Gold price retreats to $1,484/oz during Powell's press conference late yesterday. The Fed cut rates for the second time this year, while Chairman Jerome Powell said that the US economy remains strong. Gold prices had moved up to $1,511/oz in the middle of the day, buoyed somewhat by the risk of new sanctions on Iran. However, it sold off sharply going into the close. Today, we expect gold to return to the $1,500/oz mark. For the precious metals market, the main event today will be Johnson Matthey's investor day in London. > Trading in base metals calm ahead of Fed decision yesterday. China saw several comments yesterday about the need to speed up infrastructure projects. Yesterday morning's data on the balance in the global zinc and lead markets had little impact on base metal prices. The vice chairman of the China Nonferrous Metals Industry Association had some important comments about potential difficulties in the aluminum market in 4Q19.