Commodities market comment
Today’s market analysis on behalf of Ahmad Assiri Research Strategist at Pepperstone
Gold
Amidst the shifting sands of global trades, gold continues to shine as a pivotal hedge against the turbulence wrought by tariff policies and trade war. With the rollout of tariffs on imports from Canada and Mexico, coupled with ramped-up duties on China, there has been a noticeable surge in gold buying. This activity cements its position as the go-to safe haven amid trade upheavals and the often conflicting and rapid-fire news cycles. The $2850 per ounce price level has emerged as a critical junction for price consolidation and mean reversion, highlighting the metal’s heightened sensitivity to tariff risks and underpinning the persistent bullish trajectory of gold, now retesting levels beyond $2900. This uptrend is expected to hold, especially as we anticipate the retaliatory measures from Canada and Mexico poised to unveil its response on the weekend.
Oil
The implementation of tariffs casts a long shadow over economic activities, with potential knock-on effects that could decelerate growth prospects. This backdrop is proving challenging for oil prices, currently in a downturn with barrels dipping below the $72 mark. In this constrained environment, OPEC+ is forging ahead with its planned production increases, a strategy that inevitably exerts additional downward pressure on prices by increased supply. Given the grim outlook on future growth and the surplus in oil production, it is likely for the price to persist in its descent, targeting the sixties. This price movement reflects the broad market challenges and aligns with the dynamics of an ongoing trade war that remains at the forefront of global economic discourse. (edited)
