Gold, Gas, and Oil: Market Volatility Amid Trade Wars and Geopolitical Shifts

Overview

Geopolitical & Trade Tensions: U.S. tariffs on Canada, Mexico, and China, alongside escalating conflicts and diplomatic rifts, have driven market uncertainty.

• Gold – Safe Haven Demand: Investors turned to gold amid risk-off sentiment, pushing prices higher after a recent pullback.
• Gas – Supply Concerns & Demand Surge: Tariffs on Canadian energy imports, winter demand, and supply disruptions fueled a bullish trend in natural gas.
• Oil – Bearish Pressure from Oversupply: OPEC+ increased production, weakening oil prices amid trade war concerns and slowing global demand.

On March 4, 2025, President Donald Trump imposed significant tariffs on imports from Canada, Mexico, and China, escalating global trade tensions. The U.S. enacted 25% tariffs on Canadian and Mexican goods and increased duties on Chinese products to 20%

In retaliation, China announced tariffs of up to 15% on key U.S. agricultural exports, including soybeans, pork, and beef, effective March 10. Canada imposed a 25% tariff on C$30 billion of U.S. goods, with plans to extend it to C$125 billion. Mexico is also planning to announce new tariffs on U.S. goods.

These measures have disrupted global markets, with the Dow Jones Industrial Average falling nearly 800 points, erasing gains since the election. The S&P 500 and Nasdaq also declined by almost 2%, reflecting increased market volatility.

Economists warn that these escalating trade conflicts could lead to higher consumer prices and prolonged market instability, affecting industries from technology to agriculture.

Trump, Vance, Zelenskiy Clash

The recent clash between U.S. President Donald Trump, Vice President JD Vance, and Ukrainian President Volodymyr Zelenskyy has significantly impacted U.S.-Ukraine relations amid the ongoing conflict with Russia.

Oval Office Confrontation (February 28, 2025): During a televised meeting, President Trump and Vice President Vance criticized President Zelenskyy for not showing sufficient gratitude for U.S. support and for hindering peace negotiations. The exchange was unprecedented in its public hostility.

Suspension of Military Aid (March 4, 2025):

Following the confrontation, President Trump halted all U.S. military aid to Ukraine, demanding a genuine commitment to peace talks. This suspension affects ongoing military support and equipment transfers.

President Zelenskyy's Response: Expressing regret over the incident, Zelenskyy emphasized Ukraine's readiness to negotiate peace and proposed initial steps, including prisoner releases and ceasefires. He also indicated willingness to sign agreements granting the U.S. access to Ukrainian mineral resources.

UK, EU, Canada Rallied in Support for Ukraine

European allies, notably the UK and France, have increased support for Ukraine. The European Union is considering enhanced defense spending to compensate for the U.S. aid suspension. Keir Starmer, UK Prime Minister, called this unity, “The Coalition of the Willing”.

This diplomatic rift introduces uncertainty into the dynamics of the Russo-Ukrainian War and raises concerns about future U.S. involvement in Eastern European security.

Gold Sweep of Lows, Gaining Strength

Trump's shifting policies and escalating trade tensions triggered market turmoil, driving a risk-off sentiment. Investors sought safe-haven assets, leading to gold’s rebound after a four-day losing streak, sweeping previous lows.

Gold is currently testing the equilibrium level of its previous range, with potential for an upside move if it breaks and holds above this level.

Approach

Bullish Scenario

1. Breakout of 2927.76 Level
2. Stay above the breakpoint

Bearish Scenario

1. Break of 2884.31 support level

GAS: Surged Following Tariffs Commencement

Several factors have contributed to the recent increase in natural gas prices:

1. Trade Policies: The U.S. imposed a 10% tariff on Canadian energy imports, leading to concerns about reduced supply from Canada, a significant natural gas supplier to the U.S.
2. Seasonal Demand: Colder winter temperatures have increased heating needs, boosting domestic demand for natural gas.
3. Supply Constraints: Weather-related disruptions, such as severe storms, have impacted natural gas production and infrastructure, tightening supply.

Technical Analysis

Daily

Natural Gas responded positively to the Daily Fair Value Gap, breaking above the recent high of 4.340.

Weekly

Analyzing historical price action, the market appears to be following the path of least resistance.

4-Hour

For sustained upside momentum, GAS needs to hold support at key confluence levels:

1. Fair Value Gap
2. Equilibrium Level
3. Discount Zone (62% - 79%)

A breakdown below these levels could push prices toward the 4.079 level.

OIL: Range Breakdown Amidst Supply Hike

OPEC+ to Boost Oil Production Amid Market Uncertainty and Trump’s Pressure

OPEC+ is set to revive oil production after repeated delays, responding to pressure from President Trump and market conditions. The decision impacts global oil prices and supply stability.

• Planned Supply Increase: OPEC+ will raise production by 138,000 barrels per day in April, aiming to restore 2.2 million barrels per day by 2026.
• Price Reaction: Brent crude dropped 2.8% to a three-month low following the announcement.
• Market Flexibility: The supply hike may be paused or reversed based on market conditions.

OPEC's Rising Production and Market Shifts

OPEC's crude production has reached its highest level in over a year, fueled by increased output from key members.

• Production Growth: February’s crude output rose by 240,000 bpd to 27.35 million bpd, the highest since December 2023.
• Key Contributors: Iraq, UAE, and Venezuela increased production, with Venezuela reaching a six-year high of 980,000 bpd.
• Quotas Exceeded: Some OPEC+ members are pumping above agreed limits, raising concerns about discipline.

Challenges and Market Outlook

With increasing supply and external pressures, oil prices face further downside risks.

• Global Surplus Risks: The IEA projects a 450,000 bpd surplus in 2025, driven by rising output from the US, Canada, Guyana, and Brazil.
• Geopolitical Impact: Russia benefits from potential warmer US relations, while Iran faces tighter sanctions, shifting market dynamics.
• Brent Crude Decline: Prices have already fallen over 10% since mid-January, reflecting market uncertainty.
• Global Trade Tensions: The U.S. imposed new tariffs on imports from Canada, Mexico, and China, triggering retaliatory measures and raising concerns about a global trade war. These tensions have negatively impacted economic growth prospects, leading to expectations of reduced oil demand.
• Weakening Demand: Concerns about weakening demand, particularly from major economies like China, have contributed to the decline in oil prices.

Technical Outlook

Daily

Oversupply presents a downside risk for US Oil.

Oil has reacted to a Bearish Daily Fair Value Gap, aligning with the previous support-turned-resistance

Weekly

Potential downside targets are set at 66.170 - 64.743 levels.

4-Hour

3-Point Summary Approach: Gold, Gas, and Oil

1. Gold: Safe Haven Amidst Global Uncertainty

• Trade Wars & Geopolitics: The U.S. tariffs on Canada, Mexico, and China, along with the U.S.-Ukraine diplomatic tensions, fueled risk-off sentiment.
• Technical Rebound: Gold recovered after sweeping previous lows and is now testing a key equilibrium level for potential upside.
• Bullish & Bearish Scenarios: A breakout above $2,927.76 signals further gains, while a break below $2,884.31 could lead to downside pressure.

2. Gas: Surging on Supply Concerns

• Tariffs & Supply Chain Disruptions: U.S. tariffs on Canadian energy imports and winter demand pushed gas prices higher.
• Technical Strength: Natural gas broke a key resistance level at $4.34, showing a strong bullish trend.
• Key Levels: Support is expected around Fair Value Gaps and Equilibrium Levels; a breakdown could test the $4.079 level.

3. Oil: Bearish as OPEC+ Boosts Supply

• Oversupply Risks: OPEC+ raised production by 138,000 bpd in April, targeting 2.2 million bpd by 2026, weakening prices.
• Demand Worries: Weak economic outlook and global trade tensions add to the downside pressure.
• Technical Outlook: Oil reacted to a bearish Fair Value Gap at $70.12; breaking support at $66.17-$64.74 may trigger further declines.

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.