COMMODITIES: Crude Gains, Gold Edges Up As Tariff Announcement Awaited
- WTI Crude is higher on the day ahead of details on US reciprocal tariffs due to be announced at 2100BST/1600ET. The potential impact on global demand from increased trade protectionism and rising OPEC+ supply is weighed against the potential for tougher sanctions on Iran and US tariffs on buyers of Russian oil.
- WTI May 25 is up by 0.8% at $71.8/bbl.
- President Trump has said that the tariffs will take effect immediately, while Treasury Secretary Bessent stated that there will be a “cap” and that countries can negotiate to reduce the tariff they face below this. There could be a tiered tariff structure along with specific reciprocal taxes, according to Bloomberg.
- The sharp rally in WTI futures earlier this week undermines the medium-term bearish condition and signals scope for a continuation higher near-term, exposing the next key resistance at $72.91, the Feb 11 high.
- Meanwhile, spot gold has consolidated below yesterday’s record high, as the market awaits Trump’s tariff announcement, with the yellow metal edging up by 0.3% to $3,123/oz.
- Analysts at Mizuho Securities said that those invested in gold as a safe haven are not likely to sell quickly even if the reciprocal tariff announcement is a non-event. They expect safe haven flows to ride out the storm.
- From a technical perspective, the trend condition in gold remains bullish, with sights on $3,151.5 next, a Fibonacci projection.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US: FED Reverse Repo Operation
RRP usage retreats by nearly 50% to $119.987B from $234.442B on Friday's month end. Compares to $58.770B (lowest level since mid-April 2021) on February 14. The number of counterparties falls to 32 from 50 prior.
US: Trump To Make "Investment Announcement" Shortly
US President Donald Trump is shortly due to make an “investment announcement” at the White House. LIVESTREAM
- Trump is expected to announce a USD$100 billion investment from TSMC. See earlier bullet: US: Trump To Announce $100B TSMC Investment
- Trump has previously appeared alongside CEOs of SoftBank, OpenAI, Apple, and DAMAC to announce private investment projects, touting them as wins for his administration’s business-friendly policies.
- Trump may also highlight a recent decision by Honda to make its next Civic hybrid vehicle in the US rather than Mexico, with Reuters noting, “the move to make the model in the US would avoid potential tariffs on one of its top-selling car models.”
GBPUSD TECHS: Monitoring Support
- RES 4: 1.2880 2.0% 10-dma envelope
- RES 3: 1.2811 High Dec 6 ‘24
- RES 2: 1.2767 50.0% retracement of the Sep 26 ‘24 - Jan 13 bear leg
- RES 1: 1.2716 High Feb 26
- PRICE: 1.2710 @ 16:23 GMT Mar 3
- SUP 1: 1.2538 50-day EMA
- SUP 2: 1.2440 Low Feb 13
- SUP 3: 1.2333 Low Feb 11 and a key support
- SUP 4: 1.2249 Low Feb 3
A bullish trend condition in GBPUSD remains intact - for now - and this suggests the latest pullback is likely a correction. Note that moving average studies have recently crossed into a bull-mode position, highlighting a potentially stronger bull cycle. Initial firm support to watch is 1.2538, the 50-day EMA. A resumption of gains would open 1.2767, the 50.0% retracement of the Sep 26 ‘24 - Jan 13 bear leg.
