Canadian Crude and Gold Under Pressure as Trump Threatens New Tariffs Unless Market Access Improves
By Ion Jauregui – Analyst at ActivTrades
Trade tensions between the United States and Canada are once again on the rise following Donald Trump's return to office. The president has set August 1st as the deadline to impose a 35% tariff on Canadian products unless Ottawa opens its market to American goods. This new chapter has triggered renewed uncertainty in the markets, particularly affecting Canadian crude (LCrude) and gold (GOLD), two of the country's key export commodities.
U.S. Commerce Secretary Howard Lutnick reiterated that "Canada is not open to us" and defended the tariffs as a way to restore what he described as a long-standing trade imbalance. Trump has already imposed a 50% tariff on Canadian steel and aluminum, a move Ottawa deemed "unjustified", and commercial retaliation has not been ruled out.
Impact on Canadian Crude (LCrude)
Canadian crude, closely tied to the West Texas Intermediate (WTI) futures contract, could be negatively affected by a drop in exports to the U.S., its main trading partner. The threat of tariffs may widen the price spread between Western Canadian Select (WCS) and WTI, putting downward pressure on LCrude (AT ticker for WTI futures). Furthermore, U.S. refineries might shift to alternative blends if the tariffs go into effect.
From a technical perspective, crude has remained in a consolidation range throughout July, falling over the last three sessions from 66.70 USD to 65 USD, and opening lower today. The current point of control is located further down, around 61.30 USD, which corresponds to a previous consolidation zone. The long-term trend remains bearish, with a moving average crossover indicating continued downside momentum, supported by a negative MACD. The RSI stands at 46.26%, in oversold territory, suggesting a possible short-term price correction before any further decline.
Gold (GOLD): A Safe Haven Amid the Conflict?
Unlike crude, Canadian gold could benefit from this escalation, as reflected in the GOLD ticker on the ActivTrades platform. In periods of geopolitical and trade uncertainty, gold traditionally acts as a safe haven asset. Should retaliatory tariffs lead to economic volatility, GOLD prices could face upward pressure, driven by risk hedging and flows into defensive assets.
Gold has been advancing steadily throughout the year, breaking out of a consolidation around 3,324 USD and aiming to breach the triple top resistance at 3,499.94 USD. Both the MACD and RSI suggest bullish momentum, which could push gold prices higher in the coming days if this level is broken. Conversely, failure to break convincingly could lead the price back to its consolidation zone, potentially testing support at 3,176.75 USD, a secondary floor outside the main range.
All Eyes on Trump
The ongoing tariff dispute between the U.S. and Canada is exerting pressure on Canada’s key export assets. LCrude remains in a vulnerable position, with a bearish outlook and risk of further downside if tariffs are enacted. In contrast, Canadian gold (GOLD) is gaining appeal as a safe-haven asset in this volatile environment and could strengthen further if it breaks through key resistance levels.
Looking ahead, investors should closely monitor developments between both governments as the August 1st deadline approaches. Any breakdown in trade negotiations could trigger sharp price movements and tactical trading opportunities in both assets.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance and forecasting are not a synonym of a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Political risk is unpredictable. Central bank actions can vary. Platform tools do not guarantee success.
By Ion Jauregui – Analyst at ActivTrades
Trade tensions between the United States and Canada are once again on the rise following Donald Trump's return to office. The president has set August 1st as the deadline to impose a 35% tariff on Canadian products unless Ottawa opens its market to American goods. This new chapter has triggered renewed uncertainty in the markets, particularly affecting Canadian crude (LCrude) and gold (GOLD), two of the country's key export commodities.
U.S. Commerce Secretary Howard Lutnick reiterated that "Canada is not open to us" and defended the tariffs as a way to restore what he described as a long-standing trade imbalance. Trump has already imposed a 50% tariff on Canadian steel and aluminum, a move Ottawa deemed "unjustified", and commercial retaliation has not been ruled out.
Impact on Canadian Crude (LCrude)
Canadian crude, closely tied to the West Texas Intermediate (WTI) futures contract, could be negatively affected by a drop in exports to the U.S., its main trading partner. The threat of tariffs may widen the price spread between Western Canadian Select (WCS) and WTI, putting downward pressure on LCrude (AT ticker for WTI futures). Furthermore, U.S. refineries might shift to alternative blends if the tariffs go into effect.
From a technical perspective, crude has remained in a consolidation range throughout July, falling over the last three sessions from 66.70 USD to 65 USD, and opening lower today. The current point of control is located further down, around 61.30 USD, which corresponds to a previous consolidation zone. The long-term trend remains bearish, with a moving average crossover indicating continued downside momentum, supported by a negative MACD. The RSI stands at 46.26%, in oversold territory, suggesting a possible short-term price correction before any further decline.
Gold (GOLD): A Safe Haven Amid the Conflict?
Unlike crude, Canadian gold could benefit from this escalation, as reflected in the GOLD ticker on the ActivTrades platform. In periods of geopolitical and trade uncertainty, gold traditionally acts as a safe haven asset. Should retaliatory tariffs lead to economic volatility, GOLD prices could face upward pressure, driven by risk hedging and flows into defensive assets.
Gold has been advancing steadily throughout the year, breaking out of a consolidation around 3,324 USD and aiming to breach the triple top resistance at 3,499.94 USD. Both the MACD and RSI suggest bullish momentum, which could push gold prices higher in the coming days if this level is broken. Conversely, failure to break convincingly could lead the price back to its consolidation zone, potentially testing support at 3,176.75 USD, a secondary floor outside the main range.
All Eyes on Trump
The ongoing tariff dispute between the U.S. and Canada is exerting pressure on Canada’s key export assets. LCrude remains in a vulnerable position, with a bearish outlook and risk of further downside if tariffs are enacted. In contrast, Canadian gold (GOLD) is gaining appeal as a safe-haven asset in this volatile environment and could strengthen further if it breaks through key resistance levels.
Looking ahead, investors should closely monitor developments between both governments as the August 1st deadline approaches. Any breakdown in trade negotiations could trigger sharp price movements and tactical trading opportunities in both assets.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance and forecasting are not a synonym of a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Political risk is unpredictable. Central bank actions can vary. Platform tools do not guarantee success.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.