Market Volatility: Oil Under Pressure Gold Shines
Global markets are witnessing sharp contrasts, with oil prices retreating under the weight of supply concerns and trade policies,
while gold continues to gain as investors seek safety amid political and economic uncertainty.
Topic
Oil
Under Pressure from U.S. Tariffs and Russian Supplies
- Price Decline: Brent crude fell toward $68 per barrel, while WTI hovered near $64 after a brief rally.
- Key Factors: Markets are waiting for clearer signals regarding Russian oil flows, particularly as attacks on Russia’s energy infrastructure persist.
- Tariff Impact: Washington’s decision to double tariffs on Indian imports, as punishment for buying Russian crude, sparked controversy. New Delhi deemed the move “unfair,” while analysts warned it could add further uncertainty to the market.
- Future Outlook: The International Energy Agency recently warned of a record surplus in 2025, driven by weak demand growth and rising OPEC+ output. Analysts suggest prices may retest $70 if geopolitical tensions escalate.
Gold
Shines as a Safe Haven Amid Turmoil
- Fresh Gains: Spot gold climbed to around $3,375 per ounce, supported by safe-haven demand after U.S. President Donald Trump abruptly dismissed Federal Reserve member Lisa Cook.
- Political and Economic Effects: The move was seen as a threat to the Fed’s independence, boosting expectations for future interest rate cuts. Since gold typically benefits from easier monetary policy, demand strengthened.
- Dollar and Bonds: A weaker U.S. dollar and lower short-term bond yields provided additional support for the precious metal.
- Looking Ahead: Despite gaining over 25% this year, analysts say gold will need new catalysts to surpass its April peak of $3,500, with upcoming U.S. consumer spending data seen as a key test for the Fed’s flexibility.
Market Summary
- Oil prices declined under pressure from political and trade developments, with supply from Russia remaining in focus.
- Gold extended its rise as a safe-haven asset, driven by Fed-related turmoil and U.S. policy uncertainty.
- Analysts expect continued volatility across energy and metals markets in the near term.
Market Volatility: Oil Under Pressure Gold Shines