Gold Falls 6% From Highs, Rally Not Over
28-04-2025
Global Commodity Market Overview
The Dollar Index (DXY00) rose by +0.11% on Friday. The dollar posted a modest gain amid hopes of easing U.S.-China trade tensions.
The University of Michigan’s U.S. Consumer Sentiment Index for April was unexpectedly revised upward by +1.4 points to 52.2 from the previously reported 50.8, surpassing expectations of 50.5.
However, the University of Michigan’s April Inflation Expectations Index was revised down to +6.5% from the previously reported +6.7%, weaker than expectations for a rise to +6.8%.
Key Product News:
Metals
June gold futures (GCM25) closed down by $50.20 (-1.50%), while May silver futures (SIK25) also fell by $0.493 (-1.47%). The prices of both precious metals declined on Friday due to the strengthening U.S. dollar. Additionally, higher-than-expected April CPI data from Japan could prompt the Bank of Japan (BOJ) to continue raising interest rates, negatively impacting precious metals prices.
Expectations of reduced tensions in the U.S.-China trade war also led to long liquidation in precious metals on Friday. This followed a Bloomberg report indicating that the Chinese government is considering suspending a 125% tariff on certain U.S. imports, including medical equipment and industrial chemicals such as ethane.
Lower U.S. Treasury yields helped provide some support for precious metals prices. Furthermore, dovish comments from ECB President Lagarde, who noted that “risks to economic growth are increasing,” added to the bullish sentiment for gold. Additionally, geopolitical instability in the Middle East, with ongoing conflicts between Israel-Hamas and U.S.-Houthi forces, continues to fuel safe-haven demand for precious metals.
Energy
Global oil prices resumed a downward trend last week, despite stronger signs of favorable trade agreements between major economies.
By the end of the week, Brent crude prices had fallen by 1.6% to $66.87 per barrel, while WTI crude also declined by 1.55% to $63.02 per barrel.
In early-week trading, both benchmarks dropped about 2.5%, impacted by complex negotiations between the U.S. and Iran in Italy. Although earlier discussions in Oman had shown positive signals, new U.S. sanctions on Iran’s major energy sector triggered a recovery in oil prices by approximately 1.8-1.9% on April 22.
