Oil Prices Dip Despite Bullish Demand Outlook

(March 13): Gold’s burgeoning safe-haven allure may see it surge to a record high of US$3,500 (RM15,522) an ounce during the third quarter, according to Macquarie Group analysts.

Bullion could average US$3,150 an ounce over that period, analysts led by Marcus Garvey said in a note. The precious metal — which was trading around US$2,940 an ounce on Thursday — will get further support from concerns about a potentially growing US deficit, they said.

Bullion has risen by 12% this year, driven by uncertainties around geopolitics and US President Donald Trump’s tariff policies. A worsening US budget outlook is signaling inflation could increase, which would benefit gold as a hedge, according to Macquarie.

“We view gold’s price strength to date, and our expectation for it to continue, as primarily being driven by investors’ and official institutions’ greater willingness to pay for its lack of credit or counterparty risk,” the analysts said.

There is “ample scope” for bullion-backed exchange-traded funds to increase holdings, they said. Gold will also find additional support from the physical market — jewellery, bars, coins and technology — which has held up despite elevated prices, they added.

Last month, Goldman Sachs Group Inc raised its year-end gold target to US$3,100 an ounce, while Citigroup Inc. said earlier in February that it expected prices to hit US$3,000 an ounce within three months.

Source: Theedgemarkets

Most emerging Asian equities traded in positive territory on Thursday, following the release of cooler US inflation data for February, although an escalating global trade war continues to loom.

The MSCI's gauge for emerging Asian equities rose as much as 0.6%, rebounding from a 0.4% drop at close on Wednesday.

Data from the US showed that consumer prices increased less than expected in February, but investors fret that the improvement is likely temporary against the backdrop of aggressive tariffs on imports that are expected to raise the costs of most goods in the months ahead.

However, the upbeat sentiment from cooling US inflation supported a rebound in emerging Asia stocks and currencies, according to Poon Panichpibool, market strategist at Krung Thai Bank.

Stocks in Kuala Lumpur rose the most, advancing around 1.5% and snapping a five-session losing streak, while Thai equities climbed nearly 0.3%.

On the other side, as April approaches, concerns over reciprocal tariffs have surfaced, with US President Donald Trump continuing to impose tariffs on neighbouring countries. This could potentially have a negative impact on assets in emerging Asia, Poon warned.

"Countries such as India, Thailand, Philippines ... collect higher tariffs from the US when we compare to what the US collects from them ... we could definitely face reciprocal tariffs for sure, which could be quite negative for EM Asia," he said.

Stocks in Indonesia slipped, falling as much as 0.7% in early trade as a few large banks, including Bank Mandiri (Persero) and Bank Rakyat Indonesia (Persero), pulled the benchmark lower.

A nearly 30% drop in Indonesian government revenues in January, which comes as President Prabowo Subianto implements big spending plans, has raised concerns about fiscal sustainability and a potential jump in borrowing.

Meanwhile, equities in Taiwan fell the most, dropping around 1.4%, dragged by TSMC.

In currencies, the Indian rupee and the Philippine peso rose about 0.2% each.

On the other hand, the South Korean won and the Taiwan dollar slipped around 0.1% each.

A rise in global trade tensions and worries over US recession risks have rattled global markets and sparked huge volatility in the foreign exchange market, as traders see-saw between relief and angst over Trump's whipsawing policy changes.

Source: Theedgemarkets

West Texas Intermediate (WTI) crude Oil price remains subdued after two days of gains, trading around $67.40 per barrel during early European hours on Thursday. However, crude Oil could face headwinds as traders shift their focus to escalating global trade tensions.

US President Donald Trump threatened additional tariffs in response to the European Union’s (EU) retaliatory measures against the United States (US). After the US imposed a 25% tariff on European steel and aluminum, the EU countered with tariffs on €26 billion worth of US goods in April. Trump's aggressive stance on tariffs has unsettled investors, weakened consumer and business confidence, and heightened fears of a US recession.

Oil prices may also face downward pressure after the Organization of the Petroleum Exporting Countries (OPEC) reported a significant rise in February crude output, led by Kazakhstan. This increase highlights challenges for OPEC+ in maintaining adherence to agreed production targets, according to Reuters.

On the other hand, Oil found support on Wednesday as US data pointed to strong domestic demand and slowing inflation, easing investor concerns. Government figures showed US gasoline inventories dropped by 5.7 million barrels—far exceeding analysts' expectations of a 1.9 million-barrel decline—while distillate stocks also fell more than anticipated. This sharp decrease in gasoline inventories bolstered expectations for a seasonal demand surge in spring.

According to Reuters, JP Morgan analysts highlighted signs of robust US demand, along with Ukraine’s deployment of 377 drones targeting Russian energy infrastructure and military sites, as factors supporting Oil prices. "As of March 11, global Oil demand averaged 102.2 million barrels per day, growing by 1.7 million barrels per day year-over-year and exceeding our projected monthly increase by 60,000 barrels per day," they noted.

Source: FXSTREET

USD/CAD regains positive traction and draws support from a combination of factors. 

Fed rate cut bets continue to undermine the USD and cap the upside for the major.

The mixed technical setup warrants caution before placing aggressive directional bets.

The USD/CAD pair attracts some dip-buyers in the vicinity of mid-1.4300s during the Asian session on Thursday and reverses a part of the previous day's losses. Spot prices climb to the 1.4400 neighborhood in the last hour, though a combination of factors might keep a lid on any meaningful upside. 

The Canadian Dollar (CAD) continues to be weighed down by the Bank of Canada's (BoC) seventh consecutive interest rate cut on Wednesday and the escalating US-Canada trade war. Apart from this, the lack of follow-through buying around Crude Oil prices undermines the commodity-linked Loonie and acts as a tailwind for the USD/CAD pair. However, the underlying bearish tone around the US Dollar (USD), amid bets that the Federal Reserve (Fed) will cut rates several times this year, caps the upside for the currency pair. 

From a technical perspective, the USD/CAD pair, so far, has been struggling to find acceptance above the 1.4500 psychological mark and the subsequent slide warrants caution for bullish traders. That said, positive oscillators on the daily chart suggest that any further decline is likely to find decent support near the 100-period Simple Moving Average (SMA) on the 4-hour chart, currently pegged around the 1.4345 area. A sustained break below, however, might prompt aggressive selling and pave the way for deeper losses.

The USD/CAD pair might then weaken further below the 100-day SMA, around the 1.4215 area, the 1.4200 mark, towards testing the year-to-date low, around the 1.4150 region set on February 14. Spot prices could eventually drop to the 1.4100 round-figure mark.

On the flip side, a sustained strength beyond the 1.4500 mark could allow the USD/CAD pair to test the monthly swing high, around the 1.4540-1.4545 region. Some follow-through buying could lift spot prices to the 1.4600 round figure en route to the 1.4670 region and the 1.4700 mark. The momentum could extend further towards the 1.4800 neighborhood, or the highest level since April 2003 touched last month.

USD/CAD 4-hour chart

Source: FXSTREET

The models are the brains behind Gemini, Google’s rival to ChatGPT and DeepSeek

Shares of Google parent company Alphabet (NASDAQ:GOOG) popped by close to 2% on Wednesday following the unveiling of Gemma 3, the tech giant’s new advanced AI models.

The FANG stock’s market price was up more than 1.8% by Wednesday afternoon, recovering from a drop-off in early morning trading and rising steadily throughout the day.

The bounce represents somewhat of a correction for Alphabet, with the stock having begun the day roughly 4% down from the same time last week.

Gemma 3 is an update on the models used to run Google’s Gemini AI chatbot, which was launched in 2024. They are intended to be used by developers in creating AI-powered applications. The technology is capable of analyzing text, video and images, with support across 35 languages.

The company is describing the new version of Gemma as “the world’s best single-accelerator model”, outperforming similar models created by DeepSeek, OpenAI, and Meta.

Google is also calling Gemma 3 “the most capable model you can run on a single GPU or TPU”.

Crucially, Google’s Gemma models are open-souce, meaning they are publicly accessible for anyone to use and modify.

Market favoring low-hardware AI tech

Google’s share price jump following the unveiling of Gemma 3 is consistent with recent market trends, which appear to favor AI technology with lower hardware requirements.

Chinese newcomer DeepSeek is perhaps the most stark example of this. The firm launched its R1 model in January and caused immediate disruption, posing a threat to U.S. AI firms whose models rely on high-end chips and considerable computing power.

Indeed, the launch of R1, which reportedly cost less to develop than ChatGPT, promptly sent the NASDAQ 100 and S&P 500 down 4% and 2.5%, respectively.

The emergence of DeepSeek has also coincided with rising tensions between the U.S. and China, with President Donald Trump continuing to threaten hefty tariffs on Chinese exports.

Source: FXSTREET