Gold rallies as markets prepare for Trump’s “Liberation Day”, India seeks to acquire stake in Australian lithium, and crude oil rallies on possible punishment for buyers of Russian oil.
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Gold
Bullish
Gold extended its rally to new all-time highs yet again as the market de-risked ahead of Trump’s April 2nd “Liberation Day”. Markets had hoped April 2nd tariffs would be largely used as a negotiation tactic by the US against nations against which the US had a significant trade deficit. This hope has been tempered by Trump’s surprise announcement of broad-sweeping auto-tariffs, as well as the walking back of narrowing tariff targets.1
Bearish
Gold traders are very bullish heading into April 2nd, leaving space for a sizeable correction should tariffs not be as extensive as expected.2 Traders are net long by 250 thousand futures contracts as of March 31st, representing a near all-time high level of bullishness in gold.
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Lithium
Bullish
India is seeking to acquire stakes in multiple lithium projects in Australia for US$600 million.3 The projects, owned by the world’s second largest lithium miner SQM, are under consideration to be purchased by four Indian state firms, namely Khanji Bidesh India (KABIL), Coal India, Oil India and ONGC Videsh.
Rio Tinto is in talks with the Democratic Republic of Congo to develop one of the world’s largest hard rock lithium deposits.4 There is fierce competition to develop the lithium asset known as the Roche Dure deposit, which was first defined by Australia’s AVZ Minerals. KoBold Metals, a Californian exploration firm backed by Bill Gates and Jeff Bezos has also expressed interest in the asset once disputes over mining rights were settled.
Bearish
Overcapacity by Chinese miners continues to weigh on the lithium price. China’s dominance in the battery technology market means that the ongoing supply glut is expected to continue despite trade barriers with the US and Europe, as well as America's push for domestic production.
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Crude Oil
Bullish
Trump has threatened to penalise buyers of Russian oil should Putin refuse a ceasefire with Ukraine.5 Russia is one of the world’s largest producers of crude oil, and any attempt to curb Russian supply would likely have far-reaching effects. China and India have been major buyers of Russian oil since Russia’s invasion of Ukraine.
Bearish
Chinese purchases of Venezuelan oil fell after threat of Trump's secondary tariffs.6 China is the biggest buyer of Venezuelan oil, importing roughly 500,000 barrels per day. After Trump threatened 25% tariffs on the goods of any country buying Venezuelan oil, some Chinese buyers are now refraining.
Explore crude oil with BCOM.
Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at 28/03/2025. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.
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This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalised investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.
