By: Aditi
Published on: May 14, 2025
Global commodity and currency markets experienced mixed reactions on May 14, 2025, as traders digested the implications of a temporary US-China tariff truce, shifting central bank policies, and fluctuating energy inventories. This analysis dives into the movements of oil prices, the British pound, and gold, unpacking the forces driving these markets.
Oil prices edged lower on Wednesday after a rally fueled by the US and China agreeing to scale back reciprocal tariffs. Brent crude futures fell 0.6% to 66.21perbarrel,whileWestTexasIntermediate(WTI)dropped0.766.21perbarrel,whileWestTexasIntermediate(WTI)dropped0.763.25. Despite the dip, both benchmarks remained near two-week highs, reflecting cautious optimism about global trade stability.
The American Petroleum Institute (API) reported a 4.3 million barrel rise in US crude inventories for the week ending May 9, signaling potential oversupply concerns. Markets awaited confirmation from the US Energy Information Administration (EIA), with analysts warning that demand-side challenges persist.
Priyanka Sachdeva, Senior Market Analyst at Phillip Nova, noted: “The sharp contrast to last week’s inventory draw highlights ongoing demand uncertainties. Traders are questioning whether the tariff truce can sustain bullish momentum.”
Goldman Sachs analysts highlighted former President Donald Trump’s historical focus on oil prices. By analyzing his social media activity, the bank inferred Trump’s “preference” for WTI crude to trade between 40–40–50 per barrel. His advocacy for US energy dominance has long influenced market sentiment, with Bloomberg reporting nearly 900 Trump posts on oil-related topics during his presidency.
The British pound rose 0.3% to $1.3347 against the dollar after US April inflation data missed expectations. Consumer prices rose 2.3% annually, down from 2.4% in March, easing pressure on the Federal Reserve to hike rates. Monthly inflation edged up 0.2%, reversing March’s 0.1% decline.
The dollar index (DX-Y.NYB) slipped 0.2% to 100.76, reflecting diminished rate hike bets. However, CME FedWatch data showed a 61.4% probability of rates holding steady at 4.25–4.5% in July, up sharply from 29.8% a week earlier. Improved US-China trade relations have tempered expectations of aggressive Fed easing.
Sterling lost 0.1% against the euro, trading at €1.1877, as the euro gained momentum. European Central Bank (ECB) officials signaled reluctance to cut rates further, with board member Isabel Schnabel warning that inflation could overshoot the 2% target.
“The ECB’s less dovish tone, paired with easing geopolitical risks, is supporting the euro,” analysts noted. The shared currency’s resilience underscores shifting expectations for ECB policy in a stabilizing global trade environment.
Gold futures dipped 0.1% to 3,242.60perounce,whilespotpricesfell0.63,242.60perounce,whilespotpricesfell0.63,236.54. The de-escalation of US-China trade tensions reduced demand for safe-haven assets, with Trump confirming tariffs would not revert to 145% post-truce.
Linh Tran, Analyst at XS.com, remarked: “Gold’s upward momentum is fading as trade risks and inflation pressures ease. The metal struggles to hold above $3,300 amid reassessments of monetary policy paths.”
Capital.com’s Kyle Rodda identified 3,200asakeysupportlevel:∗“ContinuedprogressinUStradedealscouldpushgoldlower.The3,200 threshold will test bulls’ resolve.”*
While the US-China truce offers short-term relief, oil’s trajectory hinges on inventory trends and OPEC+ supply decisions. Analysts warn that a sustained rally requires clearer demand recovery signals, particularly from China.
The pound’s fortunes depend on the Bank of England’s stance amid sticky UK inflation. Meanwhile, the ECB’s cautious approach to rate cuts may extend the euro’s gains, especially if Eurozone data outperforms.
Gold remains vulnerable to shifts in trade sentiment and central bank policies. A resurgence in inflation or unexpected geopolitical turmoil could revive its safe-haven appeal, but for now, the metal faces headwinds.
The May 14 market movements underscore the delicate balance between trade optimism and underlying economic realities. Oil prices face pressure from rising inventories, the pound navigates shifting Fed and ECB policies, and gold struggles as risk appetite grows. Investors must stay attuned to upcoming data releases, including EIA crude reports and central bank commentary, to navigate these volatile markets.
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FAQs
Why did oil prices fall despite the US-China tariff truce?
Rising US crude inventories and demand concerns offset initial optimism, pressuring prices.
How did US inflation data impact the dollar?
Softer-than-expected inflation reduced bets on Fed rate hikes, weakening the dollar temporarily.
What is gold’s key support level?
Analysts identify $3,200 per ounce as a critical threshold to watch amid easing trade tensions.
Why is the euro strengthening against the pound?
The ECB’s reluctance to cut rates further and improving trade sentiment bolstered the euro.
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