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COMEX gold futures witnessed 0.4% decline, trading near $3,285 per ounce, retreating from the previous week's record high mainly due to easing US-China trade tensions, bolstering risk appetite across global markets. Moreover, dollar also held firm above 99.60 making gold less attractive for other currency holders. Investor sentiment shifted following indications of a potential thaw in trade talks, highlighted by President Trump's suggestion that further tariff delays were unlikely. Consequently, hedge fund managers in New York reduced their net long positions in gold futures and options to a 14-month low. Apart from more clarity on U.S. trade policy, investors this week will also be waiting on a series of U.S. economic data including the first estimate of U.S. Q1 GDP, March PCE inflation data, and April jobs figures, which could provide further insights into the Federal Reserve’s next moves and the broader economic outlook.

WTI crude oil experienced a slight dip, trading near $62.70/barrel, influenced by intricate trade war signals and Iranian geopolitical developments. Despite Treasury Secretary Bessent's optimistic remarks about progress in trade discussions with Asian partners, China denied ongoing trade talks with the U.S. and reaffirmed its commitment to supporting its economy against tariffs, projecting a 5% expansion in 2025. Bearish sentiment was further fueled by the potential for OPEC+ to increase production for a second consecutive month. The group will meet on May 5 to discuss output plans for June. Simultaneously, U.S. officials urged Russia and Ukraine to pursue peace negotiations. In a separate development, U.S.-Iran nuclear deal talks showed signs of progress, with another meeting planned in Europe. However, an explosion at Iran's strategic Shahid Rajaee port in the Strait of Hormuz, a crucial oil trade conduit, added a layer of geopolitical risk.

LME base metals trade mixed, with copper easing to $9356/ton, extending losses from the previous session amid cautious sentiment after China reaffirmed its 5% growth target but delayed immediate stimulus. While other metal prices steadied, broader market moves remained volatile as investors weighed US-China trade developments, including tariff relief signals from both sides. Despite global trade tensions, Chinese metals markets showed resilience, highlighted by a record weekly drawdown in Shanghai copper inventories and low stockpiles of zinc and aluminum. Attention now turns to upcoming developments in US-China trade talks, where slow and uneven progress continues to keep markets on edge

Chinese officials vowed to provide more support for exporters affected by US President Donald Trump’s tariffs, showing greater urgency to shore up the crucial sector while denying having had any trade talks with Washington. (Bloomberg)

European natural gas prices have stabilized near July 2024 lows, hovering around €32/MWh, primarily due to softened Asian LNG demand. This has freed up tankerborne supplies for other markets. The escalating US-China trade war has significantly impacted prices, contributing to a roughly one-third decline since the year's start. A subdued outlook for global growth and energy demand, coupled with decreasing heating requirements, has facilitated robust replenishment of European gas storage, supported by strong LNG deliveries. Notably, China recorded its highest-ever monthly LNG re-exports in April, driven by reduced domestic consumption and more favorable international markets.

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