Gold Surges, Oil Mixed Amid Geopolitical Tensions; UK PMI Strong; US Futures Up

Lead Gold prices are surging, up 1.62% to $4645.4, with reports indicating gold now constitutes 26.3% of central bank reserve assets, surpassing US Treasuries for the first time since 1996. This shift comes amidst heightened geopolitical tensions, including Ukraine's reported strike on a Russian oil refinery and Iran's warning of a "crushing" response to new US threats. Crude oil markets are mixed, with Brent crude up 0.07% to $93.85 and WTI crude down 0.18% to $86.67. On the economic front, the UK Composite PMI Flash rose to 52.5, exceeding forecasts and signaling continued economic expansion. US stock futures are broadly higher, with S&P futures up 0.34%, Nasdaq futures up 0.65%, and Dow futures up 0.34%. The US 10-year yield is up 0.92% to 4.7, while the US Dollar Index is down 0.30%. Session narrative European trading is seeing a mixed picture, but US stock futures are pointing to a positive open. Gold is a significant mover, with December gold rising $78 to $4650 an ounce, a 1.7% increase. This surge is underscored by news that gold now accounts for 26.3% of central bank reserves, exceeding US Treasuries at 20.2%, a first since 1996. Geopolitical events continue to shape sentiment, with Ukraine claiming a hit on a Russian oil refinery in Perm and Iran issuing a strong warning against new US threats, following promises of the "toughest sanctions in history." Treasury Secretary Scott Bessent is scheduled to detail these new measures on Monday. Crude oil is reacting to these tensions, with Brent crude trading near a 4-week high at $94.24 per barrel, though WTI is slightly down. Economic data from the UK provided a boost, as the Composite PMI Flash printed at 52.5, above the 51.6 forecast, with Services PMI also strong at 52.8. Eurozone Services PMI Flash also came in at 51.7, matching forecasts. In corporate news, Ross Stores rose after beating Q2 revenue and EPS estimates, while KE Holdings Inc. announced its Q2 2026 unaudited results. Walmart shares fell after softer-than-expected Q3 guidance. Trump's 50% tariffs are set to begin just after midnight, adding to trade policy uncertainty. Cross-asset check Equity futures are showing strength, with S&P futures up 0.34%, Nasdaq futures up 0.65%, and Dow futures up 0.34%. The US 10-year yield is higher by 0.92% at 4.7. The US Dollar Index is down 0.30%. In commodities, gold is a clear winner, up 1.62%, while silver is also up 1.96%. Copper is up 1.84%. Crude oil is mixed, with Brent up 0.07% and WTI down 0.18%. Natural gas is up 1.72%. The VIX is down 1.81%. Themes & continuing stories Geopolitical tensions remain a dominant theme, with the ongoing conflict in Ukraine and heightened US-Iran rhetoric impacting oil markets and broader sentiment. The impending implementation of Trump's 50% tariffs adds another layer of uncertainty to global trade. The shift in central bank reserve allocation towards gold and away from US Treasuries is a significant macro development. Economic indicators, particularly PMIs from the UK and Eurozone, are being closely watched for signs of economic health. What’s ahead Looking ahead, market participants will be focused on Treasury Secretary Bessent's announcement of new measures targeting Tehran on Monday, which could further impact oil prices and geopolitical stability. The implementation of Trump's 50% tariffs just after midnight will also be a key event. Investors will continue to monitor the geopolitical landscape and any further developments in the Middle East and Eastern Europe. Corporate earnings will also remain in focus, with traders awaiting further reports.