By Kaynat Chainwala, AVP Commodity Research, Kotak Securities.
Hopes of easing in the US-China trade war offered some relief to global markets, though mixed messaging from the Trump administration kept volatility elevated.
Markets have been on a wild ride in recent weeks due to US President Trump’s shifting tariff policies. However, a more conciliatory tone during the week improved risk sentiment. US Treasury Secretary Bessent called the ongoing tariff standoff "unsustainable" and urged de-escalation, while President Trump said US tariffs on China would be "substantially" reduced. This helped the US dollar edge toward the 100 mark and pushed major US indexes up 2–7 percent for the week. Still, gains were capped as Bessent clarified that no unilateral tariff cuts are planned without reciprocal actions from China, tempering earlier optimism.
Gold saw sharp swings as COMEX prices surged above $3,500 per troy ounce earlier in the week, driven by sustained dollar weakness to a three-year low of 97.9, heightened tensions between Trump and Fed Chair Powell, and fears over tariff-related economic fallout. However, prices retreated below $3,300 per troy ounce as risk-on sentiment improved amid growing optimism over US-China trade talks and as Trump dialed back threats to dismiss Fed Chair Jerome Powell. Silver closed with modest gains at $33 per troy ounce, while base metals on the LME ended the week broadly positive as Trump’s comments on potential auto tariff exemptions and expectations of earlier-than-anticipated US rate cuts also supported market sentiment.
MCX GOLD futures fell dramatically last week, closing at Rs 94,992 per 10 grams after reaching an all-time high of Rs 99,358. If price breaks and persists below the previous week's low of Rs 94,000, it may continue its negative momentum for the coming week, but initial support may be found at Rs 93,000, followed by the next support at Rs 92,000. However, if price can hold the initial support of Rs 93,000, it may rebound back up, with initial resistance at Rs 96,500 and then Rs 97,350.
WTI crude fell to $61.5 per barrel on concerns of oversupply, after Kazakhstan emphasized national priorities over OPEC+ commitments, and reports that several OPEC+ members may propose accelerated production increases for the second month in June. However, oil limited weekly losses to 2.4 percent and closed above $63 per barrel, supported by renewed optimism in US-China trade talks, strong refined product inventory draws, and rising Russia-Ukraine tensions following missile and drone attacks on Kyiv. Oil price moves next week will likely hinge on progress in a Russia-Ukraine truce, which Trump claims is "very close" and could boost global supply if it materializes.
Next week’s calendar is packed with key releases, including US jobs, first-quarter GDP, and the crucial inflation gauge, core PCE, all of which will be closely watched for clearer evidence on the state of the economy amid concerns that new tariffs are dampening growth and inflation outlook.
Conflicting signals from the US and China may keep investors on edge. Trump expects to finalize trade deals with US partners within three to four weeks and claimed recent communication with President Xi, though Chinese officials denied active negotiations. Meanwhile, China's leadership pledged to support the domestic economy and condemned "unilateral bullying", a direct critique of US tariffs. Though China is reportedly considering suspending its 125 percent tariff on certain US goods, progress is expected to remain slow and uneven, keeping markets cautious and traders sensitive to every new development.
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