Quote on Gold and Crude by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
Below the Quote on Gold and Crude by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities
COMEX June gold closed last week 2% lower at $3035.4/oz, erasing earlier gains amid a broader market slump. Concerns about a global trade war intensified after Trump announced reciprocal tariffs on April 2, prompting both China and the EU to vow retaliation. Investor confidence was further shaken on Friday when China’s Commerce Ministry revealed it would impose a 34% tariff on all U.S. products, matching the tariff rate President Trump had imposed earlier that week on Chinese imports. Additionally, the dollar recovered to close the week near the 103 mark, as Fed Chair Jerome Powell acknowledged that the larger-than-expected U.S. tariffs had increased the risk of higher inflation and slower growth, signaling that policymakers would not rush to offset the impact. Today, gold has edged higher, trading above $3,050/oz in an attempt to recover from a 3% drop in the previous session, supported by safe-haven demand and as China’s central bank increased its gold purchases for the fifth consecutive month in March.
WTI crude oil losses deepened on Friday, with prices tumbling 7.5% to $60.45/bbl, the lowest level in four years, as President Trump’s tariffs and China’s retaliatory actions such as export restrictions on rare earth elements fueled fears of a potential recession. This weighed on demand outlook at a time when OPEC+ announced plans to increase oil production by 411,000 barrels per day in May, significantly higher than expected. Today, WTI crude continues its decline, falling below $60 per barrel, as concerns over the escalating trade war rhetoric continue to dominate market sentiment, with Trump standing firm on his tariff stance. Additionally, Saudi Arabia has cut its flagship crude price for the second consecutive month in May.
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