Market on June 12: Oil at 2-month high, gold up slightly, sugar nears 4-year low
At the close of trading on June 11, 2025, oil prices jumped more than 4% to a 2-month high due to Middle East tensions. Gold continued to rise thanks to cooling US inflation and expectations that the Fed would soon cut interest rates. Copper prices fell due to concerns about weak Chinese demand and trade tensions. Sugar hit a nearly 4-year low, while coffee prices continued to fall.
S&P 500 fell, breaking a three-session winning streak.
US stocks fell on Wednesday (June 11), as investors weighed a preliminary trade deal between the US and China along with new inflation data.
At the end of the trading session on June 11, the S&P 500 index lost 0.27% to 6,022.24 points, ending a streak of 3 consecutive sessions of increase. The Nasdaq Composite index lost 0.5% to 19,615.88 points. The Dow Jones index decreased 1.1 points to 42,865.77 points.
The US consumer price index (CPI) rose just 0.1% in May, below the forecast of 0.2%, indicating that inflation continued to cool. The core CPI, which excludes food and energy, also rose 0.1%, below expectations. According to Alexandra Wilson-Elizondo of Goldman Sachs Asset Management, this data reflects that companies have not been immediately affected by tariffs because they are still relying on inventories or adjusting prices slowly. She said that if inflation is controlled or the job market weakens, the Fed could consider cutting interest rates. Meanwhile, US-China negotiations reached a preliminary consensus in London, towards a framework in which China will export rare earths and the US will remove restrictions on technology sales. However, the US Commerce Department said that current tariffs on Chinese goods will not change. President Donald Trump said the deal was “done” but awaiting final approval, with China pledging to supply rare earths and the US allowing Chinese students to study at US colleges and universities.
Oil prices jumped more than 4% to a two-month high as Middle East tensions escalated.
Oil prices surged more than 4%, reaching their highest level since early April, after news that the US was preparing to evacuate its embassy in Iraq due to escalating security concerns. Specifically, at the end of the session, Brent crude oil prices increased 4.34% to 69.77 USD/barrel, while WTI crude oil increased 4.88% to 68.15 USD/barrel.
The market reacted strongly to escalating geopolitical risks as Iran threatened to attack US bases if nuclear talks fail, raising concerns about supply disruptions from the Middle East. Although OPEC+ is expected to increase production from July, high domestic demand, especially in Saudi Arabia, could limit the downside impact. The market was also supported by the US-China trade deal, a sharp 3.6 million barrel drop in US crude inventories and strong domestic gasoline demand. In addition, US inflation rose only slightly in May, raising expectations that the Fed will cut interest rates from September, supporting growth prospects and energy consumption.
Gold prices continued to rise thanks to lower-than-expected US inflation and expectations that the Fed will soon cut interest rates.
Gold prices edged up after data showed the US consumer price index rose just 0.1% in May, below forecasts of 0.2%, reinforcing expectations that the Fed will cut interest rates in September. Spot gold rose 0.1% to $3,324.72 an ounce, while gold futures were almost flat at $3,343.70.
The market is now pricing in a 68% chance of the Fed cutting interest rates in September. Meanwhile, Trump confirmed that a trade deal with China has been reached, including Beijing providing rare earths and allowing Chinese students to study in the US.
Platinum rose 2.9% to $1,256.70, its highest since 2021, but Goldman Sachs warned that gains could be capped by price-sensitive Chinese demand and rising supply. Silver fell 1.2% to $36.11; palladium rose 1.3% to $1,074.25.
Copper prices fell on concerns about Chinese demand and lingering trade tensions.
Copper prices fell 1.1% to $9,655 a tonne on the LME, due to weak demand prospects from China and trade tensions with the US showing no signs of easing.
China imported 427,000 tonnes of copper in May, down 2.5% from April.
Although copper inventories on the LME have halved in the past three months to 119,450 tonnes, with 70,700 tonnes scheduled for delivery, prices remain under pressure as the US looks set to impose tariffs on copper imports after raising aluminium tariffs to 50% last week.
Morgan Stanley warns that if the U.S. imposes currency tariffs, demand from this country may decline, while signals from China indicate a slowdown in demand growth and an upward trend in exports.
Other metals were little changed: aluminium rose 0.8% to $2,513 a tonne, zinc was flat at $2,656, nickel fell 0.9% to $15,180, lead rose 0.3% to $1,988 and tin was unchanged at $32,711.
Rough road touches near the bottom of 4 years, coffee and cocoa prices decrease.
Raw sugar prices on the ICE floor slightly decreased but remain above the lowest levels in 4 years, supported by rising energy prices, while coffee prices continue to decline.
Raw sugar futures fell 0.06 cent (-0.4%) to 16.42 cents per lb, after hitting an intraday low of 16.34 cents – just above a four-year low of 16.32 cents.
Market sentiment remains bearish as early monsoon rains in Asia boost crop prospects in India, Thailand and China.
The market awaits sugarcane and sugar production data from Brazil’s central-south region for the second half of May, with S&P Global estimating output to rise 4.7% to 2.84 million tonnes. White sugar rose 1.1% to $472.80 a tonne.
Arabica coffee fell 1.3% to $3.486/lb as the harvest in top producer Brazil is progressing well amid favorable weather conditions.
Brazil's green coffee exports in May fell nearly 36% year-on-year to 2.6 million bags (60kg).
According to Hedgepoint, falling ICE arabica inventories and forecasts for colder weather in Brazil could support prices in the short term, but the long-term outlook remains bearish due to ample robusta supplies from Brazil and Indonesia. Robusta fell 0.6% to $4,291 a tonne.
London cocoa fell 0.9% to 6,349 pounds a tonne as the outlook for the 2025/26 crop in West Africa improved due to favourable rains. New York cocoa edged up 0.4% to $9,069 a tonne.
The US may extend tariff deferrals to willing countries.
The Trump administration is considering extending the 90-day tariff suspension for major trading partners if they show good faith in negotiations, US Treasury Secretary Scott Bessent said at a hearing on June 11. The US has 18 major trading partners and is aiming to reach agreements with willing parties such as the EU. This is the first time the Trump administration has mentioned the possibility of an extension without preliminary terms before the July 9 deadline. Currently, the US has only announced framework agreements with the UK and China, of which the agreement with China was announced on the same day but has not yet provided specific details.
The Fed reported good news: Core CPI increased weaker than expected, tariffs have not had a big impact.
US consumer prices rose less than expected in May, suggesting that President Trump’s tariffs have not put much pressure on inflation. The CPI rose just 0.1% month-over-month and 2.4% year-over-year, while the core CPI rose 0.1% and 2.8%, both less than expected. Prices for energy, cars and clothing all fell, helping to offset increases in food and housing costs – the main drivers of the CPI increase. The report comes as the US continues trade negotiations while maintaining current import tariffs.
China's steel exports hit record high in first 5 months of the year.
China's finished steel exports in the first five months of 2025 hit a record 48.47 million tonnes, up 8.9% year-on-year, mainly due to suppliers boosting exports amid weak domestic demand and concerns about rising tariffs. In May alone, exports reached 10.58 million tonnes - the highest since October 2024. Slow recovery in domestic demand has prompted Chinese steel mills to shift to overseas markets. At the same time, the Trump administration's 25% import tariff policy has further boosted steel exports amid the risk of other countries imposing protectionist tariffs. US imports of Chinese steel increased by 25% in the first four months of the year, while steel imports into China fell by 16.1%.
Source: SFVN Compilation
