Evening Track : Gold drops on dollar strength amid auto tariff relief; Crude Oil holds losses with US outlook and Iran in view by Kotak Securities Ltd
Comex gold experienced a decline in today’s, trading near $3,320 per ounce, influenced by anticipated easing of US auto tariffs reduced safe-haven demand, amidst growing expectations of de-escalating trade tensions. Concurrently, a strengthening US dollar exerted downward pressure on gold prices, rendering it more expensive for non-dollar denominated buyers. Market participants are keenly observing the global economic outlook, which remains clouded by uncertainties stemming from the US-led trade dynamics. This week's US economic data releases, encompassing jobs, inflation, and growth figures, are poised to provide greater clarity on the potential ramifications of the current tariff policies. Attention is now shifting to crucial U.S. economic reports later this week, including the first estimate of Q1 GDP, March’s PCE inflation data, and April’s nonfarm payrolls, which will provide fresh insights into the health of the economy and the Federal Reserve’s policy outlook.
WTI Crude oil prices have extended their decline, with WTI near $61.2, primarily due to concerns over weakening demand stemming from the escalating global trade war. Recent US economic data revealed a significant weakening in manufacturing, adding to fears of a slowdown induced by President Trump's tariffs. Simultaneously, China has resisted engaging in trade negotiations with the US and has retaliated against tariffs. Crude is on track for its largest monthly loss since 2021, pressured by the trade disputes and OPEC+'s plans to revive production. While several nations are in trade talks with Washington, Beijing's refusal to negotiate further exacerbates the demand outlook, casting a bearish sentiment over the oil market.
LME base metals recorded broad gains, led by aluminium and copper, as market sentiment improved following news that imported automobiles would be exempt from separate tariffs on aluminum and steel. Aluminium rose over 1% to $2,466, while copper surged nearly a percent to $9,465/ton, supported by tightening supply and robust demand in China. The Yangshan copper premium spiked to $93, its highest since late 2023, reflecting a scramble for imports amid dwindling inventories and pre-tariff buying ahead of possible US duties. While China denied active trade talks with the U.S., it reaffirmed its 5% growth target and pledged pro-growth policies in Q2, keeping industrial metals on firm footing.
European natural gas futures extended their decline for a sixth consecutive day, marking the longest losing streak since February, as trade war anxieties between the US and China dampened market sentiment. Benchmark futures fell over 2%, reflecting concerns about the broader economic repercussions. Despite Europe's impending need to replenish depleted gas reserves, sluggish demand in Asia, coupled with global economic uncertainty, has kept prices subdued. China's recent diplomatic stance against US tariff pressures underscores persistent international divisions. Notably, weaker Asian demand has resulted in record monthly liquefied natural gas re-exports, increasing fuel availability for European buyers.
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