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We are once again facing one of those weeks filled with various reports that could significantly impact the current and future movements of stock commodities. Moreover, it is rare to see so many fundamental, governmental, and macroeconomic catalysts packed into one week, so prepare for a potentially very volatile week. There is also the constant of all constants over the last three years – geopolitics and everything that is connected to it – Ukraine and Russia, the Middle East, and now Greenland, while Taiwan and China are ‘waiting’ in the background. In all of this, one must know how to navigate and recognize the factor to which the markets will react the most.
Trump and new tariffs is the subtitle of the new week. We will see who and what will be on the agenda this week and what will be implemented from previously announced measures. And the follow-up question is, which of the affected countries will implement countermeasures, in what form, and for which American goods? Wednesday is the day when we will find out everything. According to UBS, American tariffs of 10 percent could reduce the eurozone GDP growth by 0.1 to 0.3 percentage points over the course of a year, while 25 percent tariffs could reduce GDP by 0.3 to 0.7 percentage points.
Uncertainty also depends on EU retaliation, currency adjustments, and effects on consumer confidence. What is Trump’s goal? It is speculated that, since the U.S. provides security and access to American markets and consumers to the rest of the world, in return, he wants a devaluation of the dollar compared to other major currencies to make his exports more competitive; to restart and expand his manufacturing sector and transform the current debt held by foreign countries and groups into new bonds with a maturity of one hundred years. Trump also adds rare minerals and metals from Ukraine, Greenland, Canada, and much more. To achieve these results, the Trump administration intends to use tariffs as a weapon to pressure other countries and force them to sign agreements. It is believed that tariffs would also increase American production. Is this realistic?
Best Quarterly Performance of Gold
Gold has been the main focus of financial and commodity markets in recent weeks as it continues to push towards new price peaks. There are various reasons for the continuous rise of gold, and investors are closely monitoring its movements. The U.S. federal debt is expected to exceed the record level of debt achieved after World War II by 2029. In the 1940s, in a context similar to the current one, we witnessed a monetary reset. In 1944, the Bretton Woods agreement reshaped the global monetary system, pegging currencies to a dollar that was tied to gold. Meanwhile, the prices of the precious metal continue to break records. We are at around $3,140 per ounce. The increase in the first three months of this year was 17 percent, which is the best quarterly performance since 1986. The Bretton Woods agreement also included silver as a core asset of the dollar, like gold. Silver has recently surpassed a very significant level ($34 per ounce) and now, technically speaking, has a potential increase of over 40 percent.
On global markets, oil prices have risen for the third consecutive week. A small increase, but still an increase. In fact, if we look at the monthly level, at the beginning of March, oil prices fell to their lowest levels this year, but since then they have risen by more than six percent. However, the price per barrel in the U.S. market remains below the $70/bbl level, while in Europe it is slightly above $70/bbl. This movement in oil prices is primarily a result of sanctions imposed by the U.S. around the world. Initially, the focus was on Iran, and now it has turned to Venezuela and the introduction of a 25 percent tariff on buyers of Venezuelan oil and gas.
Given that sanctions on Russian oil have long been in place, it is clear that the latest restrictions will reduce supply in the global market. However, significant price increases are being prevented by fears of slowing economic growth, and possibly recession, which would weaken demand. The market fears that an escalation of the tariff war could harm international trade and the growth of the global economy. For this reason, many analysts estimate that oil prices will move within a narrow range in the coming period as traders fear that the tariff war could lead to rising inflation and negatively impact international trade and economic growth, and thus demand for energy.
Sharp Decline in Wheat
The futures prices of European natural gas, TTF, have been fluctuating around €40/MWh, hovering near the lowest level in three weeks, as the heating season ends and traders focus on storage for the next winter. Although mild weather could allow for early injections, market concerns still exist. The cooling this winter has led to faster withdrawals, and since storage is now filled to about 33 percent, attempts to refill are facing obstacles. High summer gas prices have removed the usual incentive for traders to store fuel, increasing uncertainty about whether stockpiling will proceed smoothly or require intervention. Some EU countries are advocating for more flexible storage targets, which increases market volatility. Meanwhile, geopolitical risks remain high, with Ukraine needing more imports after infrastructure damage and no clear signs of a recovery in Russian supply. Despite these factors, European gas prices fell by about 18 percent in the first quarter of this year, but are still approximately 50 percent higher than a year ago and may need to remain high to attract LNG deliveries and ensure adequate storage before next winter.
