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The trade tensions between the US and China are ramping up, with both countries hitting each other with new tariffs. The US has slapped a 25% tariff on aluminum and steel imports, and China has fired back with its own levies—10% on items like crude oil, agricultural equipment, and large vehicles, plus 15% on coal and liquefied natural gas (LNG).
While the immediate effects may not be catastrophic—since China can redirect some exports—the real worry is what happens next. President Trump has hinted at more tariffs targeting key industries like pharmaceuticals, semiconductor chips, and automobiles, adding more uncertainty to an already shaky market. These tariffs, which are set to commence on March 4, apply to all nations without exception.
Economic Impact: China Feels the Pressure
The trade war is already taking a toll on China’s economy, with factory activity slowing and the risk of job losses growing. In response, Beijing is rolling out tax cuts and incentives to encourage consumer spending and keep the economy steady.
Meanwhile, financial markets aren’t taking the news well. Auto stocks have been hit hard, and both the Shanghai Composite Index and the S&P 500 are experiencing volatility as investors worry about long-term instability.
And this may just be the beginning—President Trump has hinted at expanding tariffs to key industries like pharmaceuticals, semiconductor chips, and automobiles.
Canada, the U.S.’s biggest steel supplier, is also deeply tied to this situation. Nearly half of all aluminum imported to the U.S. comes from Canada, meaning industries that rely on these metals—everything from car manufacturing to construction—could feel the impact.
Key Talks on the Horizon- What’s Next?
The trajectory of global markets now hinges on the next phase of US-China trade negotiations. If both sides fail to reach a compromise, additional retaliatory tariffs could escalate tensions further, worsening economic conditions and rattling investors worldwide. On the other hand, a breakthrough agreement could restore confidence, stabilizing trade and easing pressure on manufacturing and stock markets. The big question now: Will this trade war cool off, or are we looking at an even bigger showdown? Stay tuned.
Until then, Happy Trading!
Commodity Samachar Securities We Decode the Language of the Markets
On February 10, 2025, former President Donald Trump announced the imposition of tariffs on steel and aluminum imports, aiming to protect domestic industries from foreign competition. While these tariffs directly target steel and aluminum, they can have indirect effects on other markets, including silver. Industries that rely heavily on steel and aluminum, such as automotive and construction, may face increased production costs due to the tariffs. To mitigate these costs, manufacturers might explore alternative materials. Silver, known for its excellent conductivity and malleability, could be considered as a substitute in certain applications, potentially leading to an uptick in its demand. The silver market is influenced by various factors, including industrial demand, investment trends, and geopolitical events. The introduction of tariffs adds another layer of complexity. If manufacturers shift towards using more silver, its demand could rise, potentially driving up prices. Conversely, if the tariffs lead to a slowdown in industries that consume silver, such as electronics or solar panel manufacturing, demand could decrease, exerting downward pressure on prices. The imposition of tariffs has historically led to tensions among trading partners. For instance, in previous instances when the U.S. imposed tariffs on steel and aluminum, countries like Canada, Mexico, and members of the European Union responded with their own countermeasures. Such trade disputes can disrupt supply chains, affecting the availability and cost of various commodities, including silver. If major silver-producing countries impose retaliatory tariffs or restrictions, it could impact the global supply and pricing of silver.
Silver COMEX has been testing the $32.30 resistance level, which has acted as a strong barrier in recent weeks. Every time the price approaches this level, selling pressure emerges, preventing a breakout. However, with Trump’s tariff announcement on steel and aluminum, silver could gain bullish momentum. If the price closes above $32.30 with strong volume, it would signal a breakout, potentially leading to a rally toward $32.5 and eventually around $34. Additionally, if silver is trading above the 50-day moving averages, it strengthens the bullish case. On the other hand, if silver fails to break $32.30 and faces rejection, a pullback toward $30.6 or lower is possible.
Until then, Happy Trading!
Commodity Samachar Securities We Decode the Language of the Markets
Gold and silver are once again showing strong bullish momentum, with technical and fundamental indicators aligning for a potential breakout. The release of key economic data from the United States and Canada today is expected to provide further direction to the precious metals market. The U.S. Non-Farm Payrolls (NFP) and Unemployment Rate reports, alongside Canada’s Employment Change data, will be crucial in shaping market sentiment. Weak job data from the U.S. could lead to a softer dollar, reinforcing the safe-haven appeal of gold and silver, while strong employment numbers may trigger temporary price corrections.
Recent price action suggests that gold (XAU/USD) is hovering near record highs, driven by increasing geopolitical uncertainties and growing concerns over inflation. A weaker-than-expected U.S. labor market report could take gold prices toward resistance around $3000 or above per ounce, reaffirming its bullish trend. On the other hand, any downside movement may find support near $2845 – $2850 per ounce. Similarly, silver (XAG/USD) continues to follow gold’s trajectory, with industrial demand adding an additional layer of support. If the economic data disappoints, silver could move towards $31.8 per ounce. With market participants anticipating a shift in Federal Reserve policy in the coming months, the bullion market remains well-positioned for a sustained rally. Gold and silver continue to act as hedges against economic uncertainty, and any signs of economic slowdown could further drive demand. Given the current macroeconomic backdrop, traders should watch for key support and resistance levels and remain alert to any policy shifts that could influence market dynamics. The upcoming data release will be pivotal in determining whether bullion extends its upward momentum or undergoes short-term consolidation before its next move higher.
From a technical perspective, an inverted head and shoulders pattern has been identified on the XAU/USD chart, signaling a potential bullish continuation. The pattern formation suggests a shift in momentum, with buyers gaining control. Currently, a small retest of the neckline is occurring, which often acts as a confirmation before further upside movement. If gold holds above the neckline support at $2858, we can expect a push towards the next Psychological key resistance level at $3000. The measured move from the breakout of this pattern suggests a potential upside target of $3000 or above, aligning with historical price action and volume confirmation.
Additionally, the Reserve Bank of India (RBI) has cut lending rates by 0.25 basis points, which could have a bullish impact on gold prices in the MCX market. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive for investors. This move could also lead to increased liquidity in the market, further supporting demand for bullion. Given India’s significant role in global gold consumption, this development could provide additional upside momentum to gold prices, reinforcing the ongoing bullish trend.
With market participants anticipating a shift in Federal Reserve policy in the coming months, the bullion market remains well-positioned for a sustained rally. Gold and silver continue to act as hedges against economic uncertainty, and any signs of economic slowdown could further drive demand. Given the current macroeconomic backdrop, traders should watch for key support and resistance levels and remain alert to any policy shifts that could influence market dynamics. The upcoming data release will be pivotal in determining whether bullion extends its upward momentum or undergoes short-term consolidation before its next move higher.
Until then, Happy Trading!
Commodity Samachar Securities We Decode the Language of the Markets
Overview: Recently, copper price have seen a sharp rise, hitting higher highs that have grabbed the attention of market watchers. This price surge is influenced by a mix of trade policy changes, geopolitical concerns, supply chain issues, and growing demand. Copper, being a crucial component for industries like construction, renewable energy, and technology, is seeing heightened attention. This report dives into the reasons behind this surge and what it means for investors and industry players.
1. U.S., Canada, and Mexico Extend Tariff Pause
What Happened? On February 4, 2025, President Donald Trump announced that tariffs set to resume on February 1 between these three countries would be delayed by another month.
Why It Matters: This decision has been seen as a positive development for the copper market. The U.S., Canada, and Mexico are significant players in the copper trade, and avoiding new tariffs ensures that copper can continue to flow smoothly across borders.
Impact on Copper Price: Traders reacted quickly, pushing copper prices higher as the news signaled that trade relations would remain stable, at least for now. This tariff pause brings short-term relief, alleviating concerns about rising costs or disruptions in the supply chain.
2. Global Trade Tensions Continue to Affect Copper
U.S.-China Trade Conflict: The ongoing trade war between these two economic giants has led to tariffs on various goods, including copper. As a result, there’s been a strain on the flow of copper and other key resources. The uncertainty around trade negotiations causes price volatility, with investors concerned about disruptions in the copper supply.
China’s Export Controls: Additionally, China has restricted exports of rare earth metals, which are vital for industries relying on copper, such as electronics and renewable energy. These export controls have intensified worries about potential shortages of copper, contributing to price hikes.
3. Supply Chain Issues and Growing Demand for Copper
The transition to clean energy is driving up copper demand. Electric vehicles (EVs), solar power, and wind energy require copper for electrical wiring, batteries, and other components. With the rise in renewable energy initiatives and the push for electric vehicles, the need for copper is higher than ever.
Supply Chain Challenges: Meanwhile, mining operations, especially in major copper-producing countries like Chile and Peru, are facing obstacles, such as labor strikes, resource depletion, and logistical challenges. These supply chain concerns, coupled with the growing demand, are driving copper prices even higher.
4. Investor Speculation and Market Sentiment
Investors have been actively trading copper futures, anticipating that the combination of strong demand and potential supply disruptions will continue to push prices up. When market sentiment shifts, and investors perceive that prices will rise, they make moves that further fuel price increases.
Investor Confidence: The tariff pause between the U.S., Canada, and Mexico has helped restore some confidence in the market, but geopolitical risks still make the copper market volatile. Investors are wary of potential disruptions in the coming months, but they are also hopeful that the strong demand for copper will keep prices elevated.
The Relationship Between Copper and the U.S.-Canada-Mexico Tariff Pause
Copper is a crucial material for industries like electronics, construction, and renewable energy. From wiring to solar panels, a lot of products rely on copper. This makes the trade of copper an essential part of the economy in North America.
Tariffs and Their Impact
When tariffs (extra taxes on imports) are imposed, it can increase the cost of copper, making it more expensive for industries that rely on it. If the U.S. were to place tariffs on copper from Canada or Mexico, the price could rise, leading to higher production costs for manufacturers.
Keeping Things Smooth
The U.S., Canada, and Mexico are working together under the USMCA agreement to avoid putting tariffs on each other’s goods. By pausing tariffs, they’re preventing additional costs from getting passed on to businesses and ensuring the copper trade stays uninterrupted.
Stability in the Supply Chain
Without a tariff pause, copper could become harder to import, potentially leading to shortages or inflated prices. By keeping tariffs paused, the copper supply chain remains steady, making it easier for industries to get the copper they need at a reasonable price.
North America’s Copper Resources
Canada and Mexico are key producers of copper, and the U.S. imports a large portion of its copper from them. The tariff pause ensures that copper can flow freely across borders, helping to keep costs down for U.S. manufacturers.
Keeping Competitiveness Strong
The copper market is global, with countries like Chile and Peru exporting large amounts of copper. By pausing tariffs between the U.S., Canada, and Mexico, North America can stay competitive in the global market, ensuring copper from the region is still affordable compared to other suppliers.
Conclusion:
Copper price have risen sharply due to a combination of factors. The tariff pause between the U.S., Canada, and Mexico has provided short-term relief, but trade tensions, particularly with China, continue to loom large. At the same time, growing demand for copper in industries like electric vehicles and renewable energy is pushing prices higher. On top of this, supply chain disruptions and speculative trading are further elevating the price.
For clients and investors, the copper market remains volatile, but opportunities exist in the growing demand for copper, especially in clean energy sectors. However, caution is advised due to ongoing geopolitical uncertainties and the potential for trade disruptions. Staying informed and agile will be key to navigating these developments successfully.
“Copper is currently trading within a resistance zone of 861 to 880, with strong support between 820 and 835. If the tariff pause between the U.S., Canada, and Mexico continues without implementation of new tariffs, we could see copper price break through the first resistance at 861, with the next target being 900. The current trading range remains between 820 and 860, suggesting that copper is moving within a channel. The tariff pause supports stability in the copper market, which could drive further price movement if the positive momentum continues.”
Until then, Happy Trading!
Commodity Samachar Securities We Decode the Language of the Markets