Commodities Daily - September 4, 2019

> Oil pares back losses after downbeat US manufacturing data and new trade war threats from Trump. This morning, risk-on trading is prevailing after China's Caixin/Markit services PMI for August surged to 52.1, from 51.6 in July. However, perhaps an even more important factor in the buoyed sentiment are reports that a controversial bill that would allow Hong Kong citizens to be extradited to mainland China is set to be formally withdrawn. We think that Brent could rally towards $59/bbl today, with the current risk-on rally being supported by various Fed speakers today (who are mostly doves), as well as investors pricing in bullish US inventory data.> Gold sliding today after yesterday's rally as risk appetite changing quickly; Fed speakers on the radar. During the European session we think that gold will secure above $1,535/oz, following a $15/oz overnight correction on hawkish comments by the Fed's Rosengren and reports that a controversial bill that would allow Hong Kong citizens to be extradited to mainland China is set to be formally withdrawn. An above-consensus eurozone services and composite PMI data that just came out is also positive for gold prices. Later today various Fed speakers (who are mostly doves) and the Fed's Beige book are likely to support gold back to $1,540/oz.