Commodities: Copper, WTI and cocoa futures reel

Commodities were hammered following reports that Washington might be set to ratchet-up the pressure on Beijing in their ongoing trade spat.

Overnight, and citing three persons familiar with the deliberations taking place on the Potomac, Bloomberg reported that Donald Trump was pushing for the US to levy tariffs of 25% on an additional $200bn-worth of goods from the Asian giant, instead of the 10% tax he had previously proposed.

The aim was reportedly to secure "certain concessions", but China retorted by warning against "blackmailing and pressures".

Although it was still possible that no further tariffs would be approved if Beijing 'played ball', so too the White House might formally 'up the ante' as soon as in the coming days.

All the main three-month LME base metals futures ended the session lower, with those for copper seeing the day out from $6,172 per metric tonne, having started the session from $6,300.

Gold futures were also noticeably lower, with the December contract on COMEX surrendering another 0.51% to $1,226.90/oz..

Analysts at UBS pointed to the combination of record short positions and a lack of macro catalysts as the main factors which had been undermining the 'yellow metal' of late.

"Gold net positioning has fallen to the lowest level since January 2016 and now looks very lean at 13% of the all-time high. This should ultimately be supportive for gold, allowing ample space for positions to be rebuilt ahead. But for now, there is a clear lack of buying interest amid limited catalysts from the macro space for now," the Swiss broker told clients.

"The gold market needs a stronger signal and/or signs of a response from physical markets amid cheaper prices – either is unlikely until after the typical summer holiday lull."

Oil was also seeing sharp falls, with WTI for prompt month delivery down by 1.341% at $67.85 a barrel on NYMEX, following an unexpected build in US commercial stockpiles as per the latest DoE and API data.

According to the Energy Information Administration, the DoE's statistical arm, over the week ending on 27 July, commercial US oil inventories grew by 3.8m barrels to reach 408.7m barrels, as exports shrank by 1.373m barrels a day.

ICE-traded cocoa was sharply lower as well, shedding 4,10% to trade at $2,129 per metric tonne.