BULLION - Bullion counter may trade on sideways to upside bias as gold rose on
Monday after U.S. President Donald Trump threatened to impose tariffs on
Chinese goods, indicating a dramatic deterioration in Sino-U.S. trade talks and
prompting a sharp downturn in riskier assets. United States President Donald
Trump dramatically increased pressure on China to reach a trade deal by
announcing on Sunday he would hike tariffs on $200 billion worth of Chinese
goods this week and target hundreds of billions more soon. Gold is used as a
safe-haven investment in times of geopolitical or global economic turmoil. Gold
demand was robust in India and Singapore last week as a correction in prices
ahead of a key gold-buying festival boosted purchases even as major centres like
China and Japan were closed for most of the week due to holidays. SPDR Gold
Trust, the world largest gold-backed exchange traded fund,
said its holdings fell 0.63 percent to 740.82 tonnes on Friday from 745.52
tonnes on Thursday.
ENERGY- Crude oil may continue to extend losses as oil prices tumbled by more
than 2 percent on Monday after U.S. President Donald Trump on Sunday said he
would sharply hike tariffs on Chinese goods this week, risking derailing months
of trade talks between the world two biggest
economies. Trump on Sunday said on Twitter he would drastically hike U.S.
tariffs on Chinese goods this week, pulling down global financial markets,
including crude oil futures. Crude oil may dip towards 4160 while facing
resistance near 4260 in MCX Within the oil industry, there are signs of a
further rise in output from the United States, where crude production EIA has
already surged by more than 2 million barrels per day (bpd) since early 2018,
to a record 12.3 million bpd. That has made the United States the world biggest producer ahead of Russia and Saudi Arabia. The number
of rigs drilling for gas in the United States fell by 3 to 183 in the week to
May 3, while oil-directed drilling rigs rose by 2 to 807, data from oil
services firm Baker Hughes showed on Friday.
BASE METAL - Base metals prices may trade with weak bias as Shanghai base
metals fell sharply on Monday, with copper and nickel declining more than 3
percent, as trade tensions between China and the United States escalated, just
days after investors were upbeat about progress in the two countries' trade
talks. Trump tweeted on Sunday that he will raise U.S. tariffs on $200 billion
worth of Chinese imports to 25 percent from 10 percent on Friday, and
threatened to targets hundreds of billions of dollars more in trade. Trump's
comments stand in contrast to the recent positive signals emanating from both
the U.S. and Chinese camps that progress to end the tit-for-tat tariff war was
being made and a deal was within sight. It's unlikely that China's leaders will
want to be seen to be caving in front of threats by a bullying U.S. president,
but at the same time they are also keen to reach an agreement that will
alleviate some of the pressure on their export-led manufacturing sector. China steel futures dropped on Monday, the first trading day after a
four-day national holiday, hit by worries over the outlook for trade after U.S.
President Donald Trump said he would hike U.S. tariffs on $200 billion worth of
Chinese goods. That came as the two countries had been working to reach a deal
to end a months-long tit-for-tat trade war following rounds of negotiations
among senior officials in the two governments.
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