Daily Metal and Energy Outlook 09th May
BULLION – Bullion counter may trade on sideways to upside bias as gold steadied on Thursday, with its appeal as a safe-haven for investors burnished by growing tensions ahead of key Sino-U.S. trade negotiations this week. U.S. President Donald Trump said on Wednesday that China “broke the deal” it had reached in trade talks with the United States, and vowed not to back down on imposing new tariffs on Chinese imports unless Beijing “stops cheating our workers. Trump has threatened to raise tariffs to 25 percent from 10 percent on $200 billion worth of Chinese imports at 12:01 a.m. ET (0401GMT) on Friday. Beijing has threatened to retaliate if tariffs rise, without elaborating on the details. Also aggravating geopolitical concerns, Trump on Wednesday imposed new sanctions on Iran, targeting revenue from its exports of industrial metals. That was the latest salvo in tensions between Washington and Tehran over a 2015 international accord curbing the Islamic Republic’s nuclear program.
ENERGY- Crude oil may trade with sideways bias as oil prices dropped 1 percent on Thursday amid concerns over the escalating trade battle between the United States and China, despite a surprise fall in U.S. crude stockpiles. The Sino-U.S. trade war has weighed on oil prices this week as heightened tensions between the world’s two biggest economies cloud the global economic outlook. Oil prices have had some support from signs of tighter global supply on the back of production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia. Both the Brent and WTI benchmarks have risen more than 30 percent so far this year. Global supply has also been tightened by U.S. sanctions on OPEC members Venezuela and Iran. An unexpected drop in U.S. crude inventories kept oil price declines in check. U.S. crude inventories fell by 4 million barrels in the week to May 3, the Energy Information Administration said on Wednesday. U.S. natural gas futures jumped by the most since February due to a decline in output, near record liquefied natural gas (LNG) exports and expectations for a smaller storage build than last week.
BASE METAL – Base metals prices may trade with sideways bias. Shanghai industrial metals fell in early trade on Thursday, while benchmark London copper hit its lowest in nearly three months, as investors sought safety ahead of crucial trade talks between the United States and China. The bruising trade war, which has slowed the global economy, has clouded the outlook for demand from top metals consumer China. Ahead of the talks, Trump said Beijing “broke the deal” in negotiations with Washington and would face stiff tariffs if no agreement was reached. U.S. President Donald Trump on Wednesday imposed new sanctions on Iran, targeting revenue from its exports of industrial metals, the latest salvo in tensions between Washington and Tehran over a 2015 international accord curbing the Islamic Republic’s nuclear program.
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