Evening Track : Gold rise ahead of key US economic data, US trade policy uncertainty - Kotak Securities Ltd
Comex Gold April futures Gold futures surged past $2,810 per ounce, reaching a one-week high as investors repositioned ahead of US data releases and reevaluated the Fed's policy stance following its recent interest rate hold. Fed Chair Powell emphasized no immediate rate cuts until inflation and employment data warrant them. Anticipation of ECB rate cut, coupled with dovish actions from other central banks like the BoC and the Swedish Riksbank, further bolstered gold prices. Despite this, some Fed officials maintained a hawkish tone, highlighting persistent inflation and omitting any mention of progress towards the 2% target. Concerns about potential economic repercussions from renewed tariffs under a potential Trump administration also contributed to safe-haven demand for gold.
Gold exports to the US from Europe’s main refining hub in Switzerland jumped to the highest since Russia’s invasion of Ukraine, as traders scrambled to bring bullion ashore ahead of potential tariffs. Switzerland shipped 64.2 tons of gold to the US in December, most since March 2022. (Bloomberg)
WTI crude oil prices declined to near $72 per barrel amid investor uncertainty regarding US trade policy. The nominee for US Commerce Secretary suggested Canada and Mexico might avoid potential tariffs if they address illegal migration and fentanyl issues. Canada, a significant crude oil exporter to the US, is particularly sensitive to these policy shifts. Investors await further clarification from the US administration.
LME base metal are trading positive on Thursday as traders assessed the potential impact of US tariffs on global trade with thinner trading volumes expected due to the Lunar New Year holiday in China. Market focus centered on the repercussions of proposed US tariffs on key metal imports like copper, aluminum, and steel. These measures pose a risk of increased costs for American manufacturers, potentially hindering global economic growth.Traders are closely monitoring developments to gauge the long-term effects on the metals market. LME Copper is trading higher by 0.5% at $9,110 per ton while Aluminium, Zince and Lead is trading higher by 0.30%.
European natural gas prices eased from a 15-month peak as immediate supply concerns lessened. Earlier price surges were triggered by forecasts of colder weather, Norwegian outages, and uncertainties regarding Malaysian LNG exports due to severe weather. However, the Malaysian operator confirmed operations remain unaffected. Additionally, Ukraine transit flows are back on the table for political discussions. This confluence of factors has eased market anxieties, leading to a decrease in benchmark futures after Wednesday's high.
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