Base Metal Prices Rise on U.S.-China Tariff Reduction — Market Talk

Silver prices dropped over 2% to below $32 per ounce on Monday, reversing last week’s gains as appetite for safe-haven assets diminished following a major breakthrough in U.S.-China trade relations.

Over the weekend, both nations agreed in Switzerland to significantly reduce tariffs, easing geopolitical tensions and fueling optimism across global markets.

Under the preliminary deal, U.S. tariffs on Chinese goods will be cut from 145% to 30%, while China will lower its duties on U.S. imports from 125% to 10%.

The improved risk sentiment, further bolstered by a fragile but holding ceasefire between India and Pakistan, weighed on precious metals broadly.

However, the trade accord also boosted the longer-term outlook for silver’s industrial demand, particularly in the renewable energy sector where both the U.S. and China remain major players.

Oil prices rise on market optimism as the U.S. and China agree to suspend most mutual tariffs pending further talks. Brent crude is up 2.4% at $65.46 a barrel, while WTI is up 2.6% at $62.62 a barrel. Oil has gained on a general risk-on sentiment in the market, as the lowering of the tariffs improves the outlook for the global economy. That raises the prospect of a limit to weakness in oil demand, ANZ Research analysts say in a note. That said, concerns over higher supply continue to hang over the market. OPEC's move to accelerate planned production hikes signal a significant shift in supply policy, ANZ writes. (joseph.hoppe@wsj.com)

Brent crude oil futures surged more than 2% to above $65 per barrel on Monday, reaching a two-week high, after the US and China agreed to pause most tariffs on each other’s goods.

This major trade breakthrough signaled a cooling of tensions between the world’s two largest oil consumers, reducing risks to oil demand.

Reports indicated both nations agreed to a 90-day pause and a significant reduction in tariff levels, with each side cutting reciprocal tariffs by 115%.

Meanwhile, exerting bearish pressure on oil, OPEC+ plans to accelerate output hikes in May and June.

Also, a potential US-Iran nuclear deal added pressure, as it could ease concerns about global oil supply shortages.

US and Iranian negotiators concluded talks in Oman on Sunday, with further discussions planned.

WTI crude oil futures surged more than 2% to approach $63 per barrel on Monday, reaching a two-week high, after the US and China agreed to pause most tariffs on each other’s goods.

This major trade breakthrough signaled a cooling of tensions between the world’s two largest oil consumers, reducing risks to oil demand.

Reports indicated both nations agreed to a 90-day pause and a significant reduction in tariff levels, with each side cutting reciprocal tariffs by 115%.

Meanwhile, exerting bearish pressure on oil, OPEC+ plans to accelerate output hikes in May and June.

Also, a potential US-Iran nuclear deal added pressure, as it could ease concerns about global oil supply shortages.

US and Iranian negotiators concluded talks in Oman on Sunday, with further discussions planned.

Gold prices fell nearly 3% to $3,230 an ounce on Monday, hitting their lowest level in about a month, as improved investor sentiment and a reduced demand for safe-haven assets followed news of a major tariff rollback by the US and China.

After trade negotiations in Switzerland over the weekend, the US announced it would cut tariffs on Chinese goods from 145% to 30%, while China will lower levies on US imports from 125% to 10%, both for a 90-day period.

The move represents a significant de-escalation in the trade war and signals a mutual willingness to pursue compromise over continued confrontation.

Market optimism was further supported by a ceasefire between India and Pakistan, which continues to hold despite ongoing accusations of violations by both sides.

Meanwhile, the non-yielding metal faced additional pressure after the Fed warned last week of rising inflation and labor market risks, with Chair Powell ruling out a preemptive rate cut in response to tariff-related uncertainty.

Aluminum increased to a 5-week high of 2471.00 USD/T. Over the past 4 weeks, Aluminum gained 3.35%, and in the last 12 months, it decreased 2.99%.