Resumption of flights, cooling temperatures, pressure from the US dollar, and liquidity drying up - the commodity market welcomes the "summer of turmoil".

Notice that the geopolitical powder keg is temporarily extinguished, the shadow of macroeconomic tightening lingers, and the commodity market is stepping into a "turbulent summer" of intense long and short-term gambling. Although the reopening of the Hormuz Strait has cooled the oil market, reaching bottom in inventories and vacuum in spot markets keep the rebound fuse alive; meanwhile, a strong dollar and high interest rates continue to suppress metals, coupled with summer liquidity depletion, any minor disturbance could trigger a severe market turbulence. Investors need to fasten their seat belts and be ready to defend themselves with light positions against any unexpected events. The "oil storm" caused by the reopening of the Hormuz Strait However, the recently reached reopening agreement has poured cold water on the hot oil market. International crude oil futures plummeted, with the U.S. WTI crude oil main contract quickly breaking through a key psychological support level, falling to $77 per barrel; the 12-month forward contract, which reflects future supply and demand expectations, also fell to a low of $70 per barrel. This significant weakening in the contango structure clearly indicates that the market is reassessing the "extreme supply disruption risk." However, the harsh reality of the fundamentals has not completely dissipated. Julian Timmer, head of global macro at Fidelity International, pointed out, "Due to long-term geopolitical conflicts leading to global commercial inventories and strategic reserves being depleted to historical critical levels, the actual restoration of the physical chain of crude oil has an urgent imperative. The signing of the agreement is just the first step, and it will take time to see when oil tankers can safely and adequately pass through the strait and form substantial spot supply." During this period of "agreement signed, spot not yet arrived" vacuum, energy prices may benefit in the short term from the improvement in supply expectations, but the extreme fragility of inventories means that any slight movement could evolve into a second surge. The background of the agreement negotiations is particularly complex. Vice President Pence of the United States had previously arrived in Switzerland for high-level negotiations with an Iranian delegation, trying to finalize the terms of a ceasefire agreement. After the U.S. and Iran signed a 14-point memorandum of understanding last week, the passage of oil tankers through the strait briefly increased, but the latest monitoring data shows that the shipping recovery process is still hindered. A simple arithmetic problem done by JPMorgan analysts: dividing the onshore and offshore crude oil storage capacities of Middle Eastern oil-producing countries by their daily production capacity, the conclusion is that if the Hormuz Strait were completely closed, these oil-producing countries would have to stop production after 25 consecutive daysbecause the oil cannot be transported out. The "dull knife cutting meat" of a strong dollar on metals Recently, due to the sticky inflation performance of major economies, the market's optimistic expectation of a "dovish interest rate cut" has reversed, with the probability of major central banks maintaining high interest rates or even issuing tightening signals rising. This change in monetary policy expectations has quickly turned into a double-edged sword for capital markets: high interest costs and a strong dollar index. The appreciation of the dollar directly suppresses commodities priced in dollars. Due to the substantial increase in the actual purchase cost for non-U.S. buyers, global cyclical demand is facing substantial crowding out. The metal market has become a sacrifice in this macroeconomic storm: silver, with its strong speculative and financial attributes, has become a hard-hit area for selling. Since hitting a periodic high in mid-May, silver prices have plummeted by nearly $30 per ounce in just a few weeks, with long leveraged positions suffering. Known as the "Doctor Copper" as a global economic barometer, under the dual pressure of weak demand expectations and dollar suppression, it is currently forced to retreat and test the critical defense line of $6 per pound. If this support level is breached, it may trigger a systemic collapse of pro-cyclical assets. Analyst Andrew Heck pointed out that the overall selling wave in the metal market is actually traders conducting a comprehensive stress test on "longer-term tightening policies." Liquidity depletion amplifies market volatility Looking ahead to July and August, Heck specifically warns investors to beware of the seasonal "liquidity trap." As mainstream traders on Wall Street in Europe and the United States, along with large hedge funds, gradually enter summer vacation mode, the overall trading volume and order depth in the market usually greatly shrink. In such a "shallow market," the marginal pricing power of funds is magnifiedone trade that is not particularly large or an unconfirmed tweet news can potentially trigger price fluctuations or surges multiple times more than usual in the background of liquidity depletion. The variability of geopolitics and the fickleness of central bank policies such as the Federal Reserve continue to inject a high purity of uncertainty into the market. "At this critical point of intense long and short-term logic gambling, investors must maintain a high level of caution," Heck suggests, "maintain a defense posture with light positions, and in this summer, be prepared and ready to face any surprises." In conclusion, the potential recovery of energy supply and the tightening linkage of monetary policy constitute a double gravity on the current commodity market. Investors need to be prepared to face a large-scale market turbulence throughout the summer.