Evening Track : Gold reaches historic highs as tariff uncertainty fuels safe-haven buying, Oil rise on Russia, Iran supply worries by Kotak Securities Ltd
Comex Gold April futures have surged to a record high of $3,149.5/oz for the 4 th successive session, driven by escalating concerns over potential US trade tariffs. President Trump's planned levies on all trading partners, set for announcement on Wednesday, have heightened fears of retaliatory measures and global economic instability. This geopolitical uncertainty, coupled with Trump's volatile stance on the Russia-Ukraine conflict, is fueling safe-haven demand for gold. Notably, gold's performance in the first quarter of 2025 marked its strongest since 1986. Furthermore, gold-backed ETF holdings have experienced a significant resurgence, climbing over 6% YTD, reversing four years of net outflows. This surge, alongside increased bar and coin purchases, underscores a renewed investor appetite for gold as a hedge against macroeconomic uncertainties and portfolio diversification.
WTI crude oil surged past $71.90 per barrel, driven by escalating geopolitical tensions coupled with President Trump's threats of secondary tariffs on Russian oil buyers and potential military action against Iran are heightening supply disruption anxieties. This counters the initial quarter's price stability, where OPEC+ supply increases were offset by Iranian and Venezuelan sanctions. The looming U.S. tariffs, to be unveiled Wednesday, pose a dual threat: potential demand erosion from dampened global growth and direct trade flow disruptions. While tighter sanctions could constrict supply, the tariff's economic impact presents a countervailing bearish pressure, creating a complex, volatile market environment
LME base metals trade mixed, with most ending lower, except for copper, which gained 0.25% to $9,734/tonne after four sessions of losses, supported by stronger than expected manufacturing data from China. The private Caixin/S&P Global manufacturing PMI showed expansion, signaling increased industrial activity as factories rushed to complete shipments before impending U.S. tariffs. A day earlier, official PMI data also showed the fastest growth in a year. Additionally, a shortage of copper concentrate, reflected in declining treatment and refining charges, added to supply concerns, further supporting prices. However, gains remained limited as markets braced for U.S. President Donald Trump's reciprocal tariff announcement, which could escalate trade tensions and weigh on demand.
European natural gas futures exhibited intraday volatility, oscillating between marginal gains and losses, reflecting the market's delicate balance. The official end of the heating season, marked by the most substantial storage withdrawals in four years, has provided a temporary price floor. This is occurring amidst historically high LNG imports, with Western Europe, particularly France and Italy, registering record monthly purchases, predominantly from the US. A confluence of factors, including reduced wind generation, which heightened gas-fired power demand, and disrupted Ukrainian transit, has tightened the market
Today, investors now awaiting key U.S. economic data, including ISM Manufacturing and Services PMIs and JOLTS job openings, for further market clarity.
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