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Bullion –

Comex Gold (August) and silver futures settled sharply higher on Tuesday, with gold rising 1.57% and silver gaining 2.05%, both hitting one-week highs supported by a weaker U.S. dollar, which fell to a 1.5-week low amid renewed concerns over U.S. trade protectionism and mounting fiscal challenges following Moody’s downgrade of the nation’s credit rating. Moody’s cited the ballooning $36.2 trillion U.S. debt pile as a key concern, further weighed by Trump’s warning that failure to pass his tax bill could result in massive tax hikes. Strong Chinese gold demand also underpinned gains, with April imports reaching 127.5 metric tons, the highest in 11 months. Dovish comments from ECB officials signaling potential rate cuts and ongoing trade tensions, particularly with Japan, add to market volatility. Today, Gold hold on to two days gains to trade above $3,300 supported by investor jitters regarding global economic impacts of trade tensions and geopolitical news of a potential Israeli strike on Iranian nuclear facilities. Today investors focus will be on Fed official’s speeches.

Crude Oil –

WTI crude traded within a narrow range yesterday before closing at $62 per barrel, as markets remained cautious amid ongoing Russia-Ukraine peace talks and U.S.-Iran nuclear negotiations. Prices briefly surged to $62.6 per barrel as tensions over the U.S.-Iran nuclear standoff persisted. Iran rejected Washington’s demands to abandon its uranium enrichment program, calling them excessive and outrageous, further dimming the prospects of a sanctions relief deal. Today, prices rebounded sharply to $64.19 per barrel following reports that Israel is preparing for a potential strike on Iranian nuclear facilities, raising concerns about possible supply disruptions. Besides, markets keenly await the EIA inventory report, after the API reported a 2.499 million barrel increase in U.S. crude stocks for the week ending May 16.

Natural Gas -

NYMEX gas futures jumped more than 10% to $3.45/MMBtu yesterday, buoyed by hotter than normal weather forecasts for the summer months and lower US output.

Base metals –

LME base metals ended Tuesday on a mixed note, with copper slipping marginally to $9,519.5/ton, while zinc gained over 1% to $2,710/ton. Despite the White House seeking new trade deals, uncertainty lingers due to an ongoing Department of Commerce probe that could lead to tariffs on copper imports. Gains in metals was capped by concerns over global economic growth, even as a weaker dollar and fresh stimulus from China provided some support. China’s central bank cut key lending rates to record lows and major banks lowered deposit rates to counter the economic drag from ongoing Sino-US trade tensions. LME metals may see further gains, buoyed by a softer dollar and fresh stimulus initiatives from China.

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