As China’s markets reopened post-Lunar New Year, commodities faced a challenging session amid escalating US-China trade tensions. The US Postal Service's suspension of inbound international packages from China and Hong Kong has further dampened market sentiment. This geopolitical strain has led to a rotation out of riskier industrial commodities, such as oil and copper, into safer assets like gold, which is seeing renewed demand as a haven asset.
The broader market context shows that while gold prices have surged to record highs, industrial commodities are struggling. Oil, in particular, has softened, reflecting concerns over potential disruptions in global supply chains and demand dynamics. The weakness in the Chinese yuan, possibly exacerbated by trade tensions, is also impacting yuan-priced commodities like iron ore, which saw declines in Dalian and Singapore markets.
Brent crude, the global oil benchmark, is currently priced at $75.86 as of 23:00 on February 4, down from its last close of $76.20. This decline underscores the market's cautious stance amid ongoing geopolitical uncertainties and the complex interplay of fact and sentiment driving commodity prices.