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Below the Quote on Gold and Crude quote by Kaynat Chainwala, AVP-Commodity Research, Kotak Securities

COMEX gold futures fell over 3% on Monday to settle at $3,329 per ounce, lowest closing in nearly two weeks. The sharp decline was driven by a stronger U.S. dollar and reduced safe-haven demand following the announcement of a temporary easing of trade tensions between the United States and China. As part of the agreement, the U.S. will reduce its combined 145% tariffs on most Chinese imports to 30%, including goods related to fentanyl, for a 90-day period starting May 14. In response, China will lower its 125% tariffs on U.S. goods to 10%. Additionally, the easing of geopolitical risks further dampened demand for bullion as Ukrainian President Volodymyr Zelensky announced plans for direct talks with Russian President Vladimir Putin in Istanbul. However, the metal rebounded slightly today, edging above $3,240 per ounce, as renewed safe-haven demand emerged amid reports of Israeli airstrikes on Houthi rebel positions in Yemen and Zelensky’s claims that Russia has continued its attacks and has yet to respond to Ukraine’s proposal for talks in Turkey this week. Market participants are also closely watching upcoming U.S. consumer price index (CPI) and retail sales data, as the Federal Reserve has recently expressed concerns about stagflation. Besides, shifting inflation expectations have prompted traders to trim their forecasts for Fed rate cuts in 2025, now anticipating only two reductions for the year.

WTI crude oil rose to a two-week high of $63.6 per barrel after the United States and China agreed to lower tariffs following trade talks over the weekend, boosting optimism that it could mark the beginning of the end of a full-scale trade war, improving the global demand outlook. As the world’s largest oil consumers, a thaw in U.S.-China relations is seen as a potential turning point, signaling an end to economic decoupling between the two nations. Supporting this view, Saudi oil giant Aramco said it expects oil demand to remain resilient throughout the year, with further upside possible if the trade dispute is fully resolved. However, crude prices retreated sharply today, falling to $61.6 per barrel, as market attention turned to ongoing U.S.-Iran nuclear negotiations. Progress in nuclear deal could lead to the easing of sanctions on Iranian oil exports, potentially increasing global supply. Meanwhile, traders are awaiting key monthly reports from OPEC and the International Energy Agency (IEA), both due later this week, for further insight into global supply-demand dynamics.