All eyes turn to the US

The US is set to take centre stage next week as it re-imposes sanctions on Iran’s oil on Monday. While this may spark bargain hunting, after this week’s slump in prices, any relief rally should be short lived. Indeed, it was announced today that eight countries would have temporary waivers. What’s more, we have long cautioned that the drop in Iranian supply is likely to be offset by higher output elsewhere. Meanwhile, the Fed will conclude its FOMC meeting on Thursday. Despite the recent stock market slump, we don’t think there will be a change in course from the Fed. However, if US monetary policy tightening is delayed, then gold’s recent rally in the price could well resume. On the data front, Chinese trade figures on Thursday will be closely watched, especially given the rhetoric from President Trump yesterday about improved relations between China and the US. That said, we think that more subdued economic activity is likely to have a bigger impact on commodity imports than tariffs.