Dollar, Gold, Oil: How Trade Policy Impacts Key Commodity Prices

Recent shifts in U.S. trade policy are sending ripples across global financial markets, influencing investor sentiment towards key commodities and the American currency. While temporary tariff exclusions offer some respite, ongoing investigations into specific sectors maintain a level of underlying tension.

Dollar Gains Ground on Tariff Relief Hopes

The U.S. dollar experienced a noticeable recovery, snapping a five-day losing streak. The Wall Street Journal Dollar Index registered a 0.3% increase, reaching 96.77, its most significant daily gain since early April. This upward movement followed comments from President Donald Trump indicating temporary exemptions on newly imposed tariffs. Market analysts suggest that if the U.S. economy successfully avoids a recession and the Federal Reserve maintains current interest rates, the dollar could further solidify its position as an attractive asset.

Gold Shines Amidst Trade Uncertainty

Conversely, gold prices climbed as investors sought safe-haven assets. The precious metal saw increased demand due to the prevailing uncertainty surrounding international trade dynamics. Although the U.S. administration temporarily excluded some products from tariffs, it concurrently launched new investigations into pharmaceutical and technology imports, fueling market caution. Spot gold advanced by 0.4%, trading at $3,243.49 per ounce. Market participants anticipate potential volatility should trade tensions escalate further between Washington and its major trading partners.

Oil Prices Under Pressure from Demand Forecasts

Crude oil markets faced downward pressure following several sessions lacking clear direction. Key energy organizations, including the International Energy Agency (IEA), OPEC, and the U.S. Energy Information Administration (EIA), have revised their global oil consumption forecasts downward for 2025. The IEA, specifically, lowered its demand growth estimate significantly, now expecting an increase of only 730,000 barrels per day, partly attributing the slowdown to the impact of U.S. tariffs.

Market fundamentals appear to be increasingly driving oil price movements, overshadowing macroeconomic noise from trade disputes. West Texas Intermediate (WTI) crude decreased by 0.3% to $61.33 per barrel, while Brent crude also fell 0.3% to $64.67 per barrel.

Supply Adjustments and Market Outlook

While demand forecasts are being trimmed, global oil supply is also expected to tighten due to projected lower output from the U.S. and Venezuela. However, the OPEC+ group still plans to increase production by 411,000 barrels per day in May. The oil market is expected to remain sensitive to ongoing trade uncertainties and evolving energy policies.