IGI Logo

Bullion – Comex gold fell 1.83% to a five-week low and silver down 1.98% driven by long position liquidations amid easing U.S.-China trade tensions. Over the weekend, both nations agreed to reduce tariffs, with the U.S. cutting the "de minimis" tariff on low-value Chinese imports to 30%, signaling de-escalation in the trade dispute. President Trump expressed optimism, stating tariffs are unlikely to return to 145% post the 90-day pause. Additionally, his ongoing Middle East tour and potential trade agreements with Japan and South Korea have boosted market sentiment, prompting investors to shift toward riskier assets. Today, gold futures down 1% to below $3,160 as market now anticipates fewer rate cuts and US-led trade talk advancements, along with China's Wednesday suspension of rare earth and other export curbs, created bearish pressures. Focus today will be on April’s PPI, Retail Sales, unemployment claims, and the manufacturing indices along with speech by Fed Chair Powell for cues on future monetary policy direction.

Crude Oil – WTI crude slipped to $62.8/barrel yesterday pressured by a surprise buildup in US inventories. EIA data showed US crude oil stocks rose by 3.5 million barrels during the week ending May 9, largest inventory increase since March. Still, oil prices managed to close above $63/barrel, on optimism over a potential U.S.-China trade truce and President Trump’s reiteration to maintaining maximum pressure on Iranian energy exports. Today, oil prices have dropped nearly 3% to $61.36/barrel, amid growing expectations of a potential US-Iran nuclear deal. Concerns are mounting that a deal, under which Iran is reportedly willing to forgo nuclear weapons in exchange for sanctions relief, could lead to increased Iranian oil exports, potentially contributing to an oversupply later this year.

Natural Gas - NYMEX natural gas futures slipped more than 4% to $3.4/MMBtu yesterday, weighed down by milder weather forecasts and expected drop in LNG export demand.

Base metals – LME base metals traded higher on Wednesday, buoyed by easing trade tensions between the U.S. and China. All metals ended the day in positive territory, with zinc climbing over 2% to close at $2,765/ton and aluminium concluding at $2,528.50/ton as China paused certain non-tariff measures against U.S. entities and both countries agreed to a 90-day halt on punitive tariffs. Aluminium rose for a fifth consecutive session, reaching levels last seen before the U.S. announced sweeping tariffs, amid signs of a tightening market. The truce has sparked optimism across commodity markets, reviving hopes for global growth and boosting metals demand. LME metals are likely to trade higher on easing trade tensions and improved demand sentiment, though gains may be capped amid caution over multiple trade agreements.

Above views are of the author and not of the website kindly read disclaimer