Daily Metal and Energy Outlook 07th May
BULLION – Bullion counter may trade on sideways to upside bias as gold prices climbed on Monday after U.S. President Donald Trump threatened to raise tariffs on Chinese goods, escalating Sino-U.S. trade tensions, which prompted investors to sell riskier assets and boost safe-haven bullion. U.S. President Donald Trump on Sunday announced he would hike tariffs on $200 billion worth of Chinese goods this week. He also said he would target a further $325 billion of Chinese goods with 25 percent tariffs shortly, essentially covering all products imported into the United States from China. Trump comments dented global shares and oil prices, while boosting the yen, which like the yellow metal, is considered a safe haven during times of a geopolitical or global economic turmoil. Hedge funds and money managers switched to a net long position in COMEX gold in the week to April 30, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
ENERGY- Crude oil may trade with sideways bias as oil prices were mixed on Tuesday as U.S. sanctions on oil exporters Iran and Venezuela kept markets on edge while concerns that an escalating Sino-U.S. trade dispute could slow the global economy also kept crude somewhat in check. The United States is tightening sanctions on Iranian oil exports and on Monday said it was boosting its military presence in the Middle East. Tehran has said it would defy these sanctions and try to continue selling oil in the grey market. Iran has also threatened reciprocal actions against U.S. sanctions, which could mean restarting some of its nuclear programme. The U.S. sanctions have already halved Iranian crude oil exports over the past year to below 1 million barrels per day (bpd), and shipments to customers are expected to drop as low as 500,000 bpd in May as U.S. sanctions tighten. Beyond Iran, the crisis in Venezuela has also disrupted oil supplies from this OPEC member, with Washington placing oil sanctions on the Venezuelan government under President Nicolas Maduro. U.S. natural gas futures fell on Monday to their lowest in over a week on forecasts for warmer weather and less heating demand over the next two weeks than previously expected.
BASE METAL – Base metals prices may trade with sideways bias. London base metals were mixed in early trade on Tuesday amid concerns that an escalating U.S.-China trade tension could hurt the global economy, but copper and nickel on the Shanghai Futures Exchange rebounded from the previous session’s slump. China’s central bank said on Monday it will cut reserve requirement ratios to release about 280 billion yuan ($41 billion) for some small- and medium-sized banks, in a targeted move to help companies struggling amid an economic slowdown. U.S. President Donald Trump said he would impose additional tariffs on Chinese goods slated to go into effect on Friday, as China, according to U.S. trade officials, backtracked on substantial commitments it had made during the trade negotiations. Beijing is sending a delegation to Washington this week, led by Chinese Vice Premier Liu He, to try to reach a trade deal with the United States ahead of the tariffs imposition, U.S. Trade Representative Robert Lighthizer said on Monday.
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