Gold Supported by Rising Safe-Haven Demand as Oil Retreats on Easing Risk Premium; Commodity Markets

I. Market Overview

On August 3, global commodity markets traded with mixed performance.

As the United States temporarily refrained from taking further military action against Iran, market concerns over a broader escalation in the Middle East eased, leading international crude oil prices to retreat sharply from recent highs. As a result, the geopolitical risk premium that had been built into oil prices began to unwind.

Nevertheless, investors continue to monitor developments in the Middle East closely, as any renewed escalation could once again disrupt expectations for global energy supplies and trigger increased volatility in oil prices.

At the same time, market attention is gradually shifting toward the upcoming U.S. Nonfarm Payrolls (NFP) report, which is expected to provide important clues regarding the future direction of Federal Reserve monetary policy.

II. Gold: Safe-Haven Demand Returns as Markets Await Employment Data

Spot gold edged higher, supported by a weaker U.S. dollar and renewed safe-haven demand.

Although investors remain cautious about the Federal Reserve's future policy path, attention has now turned to the upcoming U.S. labor market data, which could significantly influence expectations for future interest rate decisions.

• If employment data disappoints, expectations for future rate cuts may strengthen, providing additional support for gold prices.

• Conversely, stronger-than-expected employment figures could boost the U.S. dollar and limit gold's upside potential.

In the near term, gold is expected to remain primarily driven by movements in the U.S. dollar, economic data releases, and overall market risk sentiment.

III. Crude Oil: Geopolitical Risk Premium Eases, but Supply Risks Persist

In the energy market, OPEC+ announced a higher production target for September, although the actual increase in supply may remain limited in the short term due to ongoing geopolitical disruptions affecting transportation and energy logistics in parts of the Middle East.

Following the temporary easing of geopolitical tensions, the war-related risk premium embedded in crude oil prices has begun to fade, contributing to the recent pullback from elevated levels.

However, crude oil prices continue to be influenced by several key factors:

• Geopolitical developments in the Middle East.

• Global crude oil transportation conditions.

• OPEC+ production policies.

• Global economic growth and energy demand expectations.

As a result, oil prices are expected to remain highly volatile in the near term.

IV. Industrial Metals: Awaiting Stronger Demand to Drive the Next Move

Industrial metals continue to trade within a consolidation range.

Market participants remain focused on:

• The recovery of China's manufacturing sector.

• Global infrastructure investment.

• Long-term demand driven by Artificial Intelligence (AI).

• Renewable energy expansion.

• Power grid modernization.

In the short term, industrial metals are likely to remain sensitive to movements in the U.S. dollar and incoming global economic data while waiting for stronger fundamental catalysts.

V. Market Outlook

Overall, commodity markets have gradually shifted their focus from geopolitical risks toward global macroeconomic fundamentals and monetary policy expectations.

Over the coming days, several key factors will determine the direction of commodity markets:

• U.S. Nonfarm Payrolls (NFP) Report.

• U.S. Dollar Index (DXY).

• Developments in the Middle East.

• Implementation of OPEC+ production policies.

These factors are expected to play a decisive role in shaping the outlook for gold, crude oil, and industrial metals.

Summary

Commodity markets are transitioning from a geopolitical-driven environment toward one increasingly influenced by macroeconomic fundamentals.

Gold has found support from a weaker U.S. dollar and renewed safe-haven demand, while crude oil has pulled back as geopolitical risk premiums unwind, despite ongoing concerns over supply disruptions. Meanwhile, industrial metals continue to await stronger global demand before establishing a clearer upward trend.

With the U.S. Nonfarm Payrolls report approaching, expectations surrounding the Federal Reserve's policy path may be reassessed, potentially triggering a new round of price discovery across global commodity markets.