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Markets digest trade heat
Despite the aggressive tone, backdoor negotiations are reportedly underway, with tariff-hit nations expressing interest in revisiting trade terms
WTI climbs modestly on a softer dollar
Expectations of multiple 2025 rate cuts pressure the dollar
Gold steadies on Safe-Haven demand
Trade Tensions
Markets remain cautious as trade rhetoric escalates, after former President Donald Trump doubled down on his stance toward China, proposing a steep 50% tariff in response to Beijing’s latest hike to 34%. Despite previously hinting at this move, the announcement injected fresh volatility into global risk sentiment.
Trump suggested that many of the tariff-affected nations are now showing interest in renegotiating terms, framing the strategy as part of a broader initiative aimed at correcting trade imbalances and reducing the US deficit. The tone may have shifted from warning to confrontation, but diplomatic backchannels remain in motion.
Energy Markets
The United States has dispatched a delegation to both the UAE and Qatar, initiating a new round of dialogue focused on energy market dynamics. This follows Trump's public indication that nuclear talks with Iran may be back on the table, raising hopes for a broader Middle East energy framework. These developments come as crude oil sees modest gains.
WTI prices nudged higher as a softer US dollar lent support to dollar-priced commodities. The upside remains limited amid concerns that tariff escalation could dampen global demand. Adding to the mix is a surprise output increase from OPEC+, urging caution among bulls.
Precious Metals
Gold steadied in early Tuesday trading, attempting to bounce back after a three-day decline that took it to its lowest in nearly a month, around the $2,955. The rebound aligns with renewed safe-haven interest, fueled by fears that widening trade wars may drag global growth into contraction territory. Uncertainty surrounding the long-term economic impact of retaliatory tariffs has kept investors hedged in non-yielding assets like bullion.
Currencies
Markets are increasingly pricing in multiple rate cuts by the Federal Reserve throughout 2025. These expectations are keeping the US dollar on a weaker footing, offering additional support for gold. Traders eyeing the upcoming FOMC minutes and key inflation data later this week for further direction.
