Commodity wrap - Oil, Gold, Cocoa, Coffee (12.08.2025)

Oil

• Last week, oil prices experienced significant declines amid the lack of retaliatory tariffs on Russia, with the exception of an additional 25% tariff imposed on India—a move widely seen as purely political, to force India to some kind of trade agreement. 

• Evidence of broader sanctions impacting India is beginning to emerge. The largest state-owned Indian refineries have procured oil from sources other than Russia for September and October deliveries.

• An announcement was made before the weekend about a meeting between Trump and Putin, with a subsequent update confirming the meeting would take place in Alaska on August 15.

• Oil prices, however, remain near last week's lows due to uncertainty over whether a meeting between the leaders of the US and Russia will lead to a breakthrough in the war between Ukraine and Russia.

• Russia is managing Western sanctions and export restrictions effectively, with any reduction in its exports primarily a result of the OPEC+ production cuts agreement.

• Oil rebounded slightly during Monday's session following comments from Ukrainian President Zelenskyy that he saw no prospects for a swift end to the war, as he would not accept an ultimatum involving the division of Ukrainian territory for Russia.

• J.P. Morgan suggests that if a three-digit tariff were imposed on countries importing Russian oil, it could ultimately lead to significant supply disruption.

• OPEC+ continues to increase production, although the output hikes are lower than what would result from restoring voluntary cuts. This means the final impact of the production increase on oil is somewhat more limited.

• According to the latest OPEC report, production in OPEC countries alone reached 27.5 million barrels per day, an increase of 260,000 barrels per day compared to the previous month.
  

Oil inventories have stabilized in recent weeks, a consequence of a global oversupply in the oil market. In theory, at the end of the summer, we should observe an inventory rebound, which could put even greater pressure on oil prices. Source: Bloomberg Finance LP, XTB

Oil is moving in line with previous geopolitical situations related to supply restrictions. If another attempt to limit supply were to occur, the price should once again react with short-term gains. Source: Bloomberg Finance LP, XTB

Oil remains below a key resistance level at the 200-period moving average. Source: xStation5

Seasonality suggests a price increase in early autumn and a local peak around the 200th trading day of the year, followed by a noticeable correction. Source: Bloomberg Finance LP

Gold

• Donald Trump, in a message on his Truth platform, stated that there would be no tariffs on the import of gold and special goods into the US. Late last week, market turmoil driven by this uncertainty led to a rise in futures prices, reaching as much as $100 above the spot price.

• The White House has announced that an executive order will be issued soon to clarify how gold will be treated.

• The United States is a major importer of gold, primarily from Switzerland and Canada. Tariffs of 39% and 35%, respectively, could halt gold imports from these countries and lead to a huge disparity between the price of futures and the spot market.

• The situation regarding the Fed has calmed down somewhat but could become more heated again in September, just before the decision. At this point, the Fed is expected to resume interest rate cuts.

• ETF funds continue to buy gold. Although the quantity of ounces in vaults remains well below historical highs, in terms of value, historical highs are being recorded day after day.

• There has recently been a reduction in long positions on COMEX, though this occurred just before the inconsistencies regarding gold tariffs emerged. Conversely, the number of long positions on gold on the Shanghai Stock Exchange is at a historical high.

The position of speculators in the Chinese gold market is growing strongly. Source: Bloomberg Finance LP, XTB

It is worth noting that since the consolidation in central bank assets after the initial rebound in the first and second quarters, the price of gold has also entered a consolidation. Source: Bloomberg Finance LP, XTB

5- and 10-year seasonality suggested consolidation in recent months, followed by a small rally at the end of the summer. This seasonality then points to a slight correction to the 200th trading day of the year. Source: Bloomberg Finance LP, XTB

Cocoa

• Cocoa prices reacted with strong gains following reports of very poor weather in West African countries, which is damaging crops ahead of the main season, set to begin in October.

• According to data from the European Centre for Medium-Range Weather Forecasts, rainfall in Ghana and Côte d'Ivoire during the passing season was below the 30-year average, combined with high temperatures.

• However, most of the 7% increase was largely neutralized by the end of the session. The gains could have been related to the approaching futures contract rollover deadline. Many traders may have been closing their positions by entering opposing positions, which fueled the rally.

• The forward curve is currently in backwardation, although the difference between the nearest contracts is smaller than it was a month ago.

• We are also observing a start to the decline in exchange inventories, which means that cocoa deliveries from producing countries are currently insufficient. This is the second consecutive decline.

• The latest forecasts indicate a mid-season production drop in Côte d'Ivoire of about 10% compared to last year. Production is also expected to fall by 11% in Nigeria. On the other hand, for the entire season, production in Côte d'Ivoire is projected to increase. The same applies to Ghana and Cameroon.

• However, we are simultaneously observing a decline in processing. Q2 data showed drops of 3% to 16% depending on the continent.

The forward curve is higher and in backwardation, but it is less steep than it was a month ago. Source: Bloomberg Finance LP

Cocoa production this season is expected to be higher than demand, but a revision cannot be ruled out in the near future. At the same time, the demand-side situation appears to be worse than initially expected. Source: Bloomberg Finance LP

Cocoa inventories have started to decline again. This is in line with seasonality but may also reflect a problem with the availability of cocoa from current deliveries. The key will be how inventories behave at the start of the main season—whether they continue to fall. Source: Bloomberg Finance LP, XTB

Cocoa seasonality currently points to a potential rally. A local peak should occur around the 180th-190th trading day of the year. Source: Bloomberg Finance LP, XTB

Coffee

• Coffee is reacting with a sharp decline during Tuesday's session after strong Friday and Monday sessions. The gains were supported by turmoil related to tariffs.

• Donald Trump's tariffs could lead to an increase in the available global coffee supply while simultaneously reducing the supply available to the United States.

• The New York Stock Exchange is a global benchmark, so prices will have to be higher to redirect supplies from countries other than Brazil to the US.

• Inventories remain low in a historical context but are close to last year's levels.

• The forward curve remains elevated compared to last month. The spot price has increased slightly more strongly than futures prices.

The coffee forward curve is currently higher than a month ago and is slightly steeper than before. Source: Bloomberg Finance LP

The difference between coffee futures contracts separated by three months continues to grow. If this difference increases to around 6-7 cents, the market may determine that the spot price is slightly too high. Source: Bloomberg Finance LP