Commodities Wrap: Gold Scours New Peaks as Oil Battles Supply Glut

The commodities complex is diverging sharply, with precious metals staging a historic rally while energy markets struggle to find a floor despite significant geopolitical triggers.

Gold's Unstoppable Ascent

XAU/USD has extended its record-setting rally for the sixth consecutive day, driven by a perfect storm of safe-haven demand.

• Price Targets: Following the breach of the $5,000 psychological barrier, Bank of America has issued the most aggressive forecast on the street, raising its short-term target to $6,000/oz.
• Drivers: The rally is fueled by global central bank divergence, US fiscal instability, and the “debasement trade” as investors seek hard assets amidst sovereign debt concerns.

Crab Market for Crude

Oil prices remain locked in a volatile range, with WTI hovering near $61.27 and Brent around $65.20. The market is caught between Geopolitical Risk and Supply Overhang.

• Geopolitical Risk Premium: Tensions between the US and Iran have escalated, with an American carrier group moving to the Indian Ocean and Iran placing forces on high alert. Additionally, production outages in Kazakhstan (Tengiz field) and potential blockades on Cuban oil are providing a floor for prices.
• Supply Overhang: Bearish fundamental data is capping gains. The API and EIA reported significant inventory builds (3.6M barrels for crude, 4.2M for gasoline), signaling weak downstream demand. ANZ Bank analysts project a global surplus of 1.74 million bpd by 2026.