Tag: Gold

  • Gold surges past ,400 on Israel-Iran war risk, soft US inflation boosts safe-haven demand

    Gold surges past $3,400 on Israel-Iran war risk, soft US inflation boosts safe-haven demand


    • Bullion rallies to five-week high amid geopolitical tension and dovish Fed outlook
    • Israel strikes Iran, fueling fears of broader war and driving flight to safety into Gold.
    • XAU/USD hits $3,446 before easing on profit-taking; eyes next week’s Fed decision and US data slate.

    Gold price rallied for the third consecutive day after the Israel-Iran conflict erupted on Friday, triggering a risk-off mood in financial markets as fears that it could escalate loom. At the time of writing, XAU/USD trades at $3,422, up more than 1%.

    Several factors underpin bullion. On Friday, Israel’s attack on Iran’s military installations, nuclear facilities and senior officials augmented tension in the area. After the attack,  XAU/USD reached a five-week high of $3,446 before retreating somewhat to its current levels as traders booked profits ahead of the weekend.

    Softer US CPI and PPI strengthen bets on Fed rate cuts despite improving consumer sentiment

    Another factor was that inflation in the United States (US) continued to ease following the release of the Consumer Price Index (CPI) and the Producer Price Index (PPI) figures for May. Recently, a University of Michigan (UoM) Consumer Sentiment survey revealed that households are becoming more optimistic about the economy, yet they remain worried about higher prices.

    US President Donald Trump hinted that Iran brought the attack on itself, as Washington warned Iran to restrict its nuclear program.

    Next week, traders will be watching the release of the Federal Reserve’s (Fed) monetary policy meeting, where officials will update their economic projections. Besides this, Retail Sales, Industrial Production, housing and jobs data could help dictate Gold’s direction.

    Daily digest market movers: Gold price surges on risk aversion

    • Recently, US President Trump said to Axios that Israel’s attack could help him reach an agreement with Iran. He urged Iran to make a deal, adding, “There has already been great death and destruction, but there is still time to make this slaughter, with the next already planned attacks being even more brutal, come to an end.”
    • The University of Michigan (UoM) Consumer Sentiment report in June showed that households are becoming more optimistic about the economy. The Sentiment Index rose from 52.2 to 60.5, while inflation expectations decreased for both one-year and five-year periods, from 6.6% to 5.1% and from 4.2% to 4.1%, respectively.
    • Although the data is positive and clears the path for the Federal Reserve to ease policy, the escalation of the Middle East conflict pushed Oil prices up by more than 6%. This suggests that Gasoline prices could increase, and that a reacceleration of inflation looms.
    • US Treasury yields are recovering, with the US 10-year Treasury yield climbing over seven basis points (bps) to 4.436%. US real yields followed suit, rising seven basis points to 2.186%, capping Bullion’s advance.
    • The Greenback rises after hitting three-year lows, according to the US Dollar Index (DXY). The DXY, which tracks the value of the Dollar against a basket of peers, is up 0.30% at 98.15 after hitting a multi-year low of 97.60.
    • Goldman Sachs reiterated that the price of Bullion would rise to $3,700 by the end of 2025 and $4,000 by mid-2026. Bank of America (BofA) sees Gold at $4,000 over the next 12 months.
    • Money markets suggest that traders are pricing in 47 basis points of easing toward the end of the year, according to Prime Market Terminal data.

    Source: Prime Market Terminal

    XAU/USD technical outlook: Gold price consolidates near $3,400

    Gold price is set to extend its gains past the $3,450 figure, clearing the path to challenge the record high of $3,500 in the near term. The Relative Strength Index (RSI) shows that momentum remains bullishly biased, and with that in mind, the path of least resistance is tilted to the upside.

    Conversely, if XAU/USD tumbles below $3,450, the first support would be the $3,400 mark. If it surpasses, the next stop would be the 50-day Simple Moving Average (SMA) at $3,281, ahead of the April 3 high-turned-support at $3,167.

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



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  • Dollar Crushed as Dovish Inflation Data and Trade Tensions Weigh; Euro Surges to Multi-Year High

    Dollar Crushed as Dovish Inflation Data and Trade Tensions Weigh; Euro Surges to Multi-Year High


    Dollar accelerated its broad-based selloff in early US trading, plunging to its lowest level against Euro since 2021. The latest catalyst came from softer-than-expected May PPI data, which followed Wednesday’s downside surprise in CPI. The tandem inflation prints have further calmed fears of immediate tariff-driven price pass-through, at least for now, and are reinforcing expectations that Fed is moving closer to resume policy easing.

    As a result, market expectations for Fed easing have firmed up. Fed funds futures are now pricing in an 80% chance of a rate cut in September, up from around 75% just a week ago before the two inflation releases. The tone of both upstream and downstream price measures—despite the tariff backdrop—has strengthened the market’s conviction that Fed will deliver a cut before the fourth quarter, particularly as labor market data has also started to show signs of softening.

    Adding to Dollar’s woes is renewed uncertainty over US trade policy. While Treasury Secretary Scott Bessent floated the possibility of extending the current 90-day tariff truce with “good faith” trading partners, President Donald Trump struck a starkly different tone. Trump dismissed the need for any extension and hinted that countries would be unilaterally informed of their new tariff terms in the coming weeks. This reinforces fears that the US may revert to aggressive, one-sided trade actions just as the 90-day tariff truce nears expiration.

    In the currency markets, Dollar is clearly the weakest performer of the day, followed by Loonie and Aussie. In contrast, safe-haven demand has lifted Swiss Franc to the top of the board, with Euro and Yen close behind. Euro in particular continues to draw support from a series of ECB officials signaling that the rate-cut cycle is nearing completion. That divergence—between a Fed leaning dovish and an ECB shifting toward a pause—is now starkly reflected in EUR/USD price action.

    Sterling and Kiwi are trading in the middle of the pack, with the Pound underperforming its European peers. UK GDP contracted more than expected in April, reinforcing expectations for a BoE rate cut in August. Despite some signs of resilience in the broader three-month growth trend, momentum has clearly slowed, leaving BoE less justification to hold rates elevated for much longer.

    Technically, Gold is also bouncing on Dollar weakness, and focus is back on 3403.49 resistance. Firm break there will resume the rally from 3120.34, and revive the case that correction from 3499.79 high has completed. Further rally should then be seen to retest 3499.79.

    In Europe, at the time of writing, FTSE is up 0.18%. DAX is down -0.87%. CAC is down -0.43%. UK 10-year yield is down -0.063 at 4.488. Germany 10-year yield is down -0.059 at 2.478. Earlier in Asia, Nikkei fell -0.65%. Hong Kong HSI fell -1.36%. China Shanghai SSE rose 0.01%. Singapore Strait Times rose 0.08%. Japan 10-year JGB yield fell -0.001 to 1.460.

    US initial jobless claims unchanged at 248k, match expectations

    US initial jobless claims were unchanged at 248k in the week ended June 7, slightly below expectation of 251k. Four-week moving average of initial claims rose 5k to 240k, highest since August 26, 2023.

    Continuing claims rose 54k to 1956k in the week ending May 31, highest sine November 13, 2021. Four-week moving average of continuing claims rose 20k to 1915k, highest since November 27, 2021.

    US PPI up 0.1% mom, 2.6% yoy in May

    US PPI rose 0.1% mom in May, below expectation of 0.2% mom. PPI services rose 0.1% mom, while PPI goods rose 0.2% mom. PPI less food, energy and trade services rose 0.1% mom.

    For the 12 months period, PPI rose from 2.5% yoy to 2.6% yoy, matched expectations. PPI less food, energy and trade services rose 2.7% yoy.

    ECB Schnabel: Monetary easing nears end as Europe embraces stronger Euro and fiscal support

    ECB Executive Board Member Isabel Schnabel signaled today that the central bank’s monetary easing cycle is “coming to an end,” citing stable medium-term inflation forecasts and improving macroeconomic conditions.

    Speaking with notable confidence, Schnabel downplayed the expected dip in inflation—projected at just 1.6% in 2026—as a “temporary deviation” caused by energy base effects and a stronger euro.

    Schnabel painted a relatively constructive picture of the Eurozone economy, stating that growth remains “broadly stable” even as global trade tensions intensify. Private consumption continues to provide a key pillar of support, while both manufacturing and construction sectors are showing signs of recovery. She also highlighted that “Additional defense and infrastructure spending counteract tariff shock on growth”.

    In her view, these structural shifts, combined with a resilient Euro and outperforming equity markets, reflect a “new European growth narrative” that could elevate the region’s economic standing.

    Still, Schnabel acknowledged the risks posed by escalating trade tensions, particularly in the form of inflation volatility and financial market uncertainty. She warned that tariffs can be amplified through global value chains, posing upside risks to inflation. At the same time weaponisation of raw materials threatens to further strain supply chains.

    ECB Villeroy and Šimkus emphasize flexibility as policy hits neutral zone

    Comments from two ECB Governing Council members today reinforced a cautious stance as the easing cycle appears to have reached a natural pause, following eight consecutive rate cuts.

    French member Francois Villeroy de Galhau emphasized flexibility, telling Franceinfo radio that future policy will depend on how inflation evolves, stressing a preference for “pragmatism and agility.”

    Lithuanian member Gediminas Šimkus echoed a similar tone, stating that policy has now reached a “neutral level”. It is critical for ECB to maintain the freedom, “not to commit to one direction or another”. He warned of growing uncertainty, particularly around upcoming US trade decisions as the 90-day tariff truce nears expiry on July 9.

    UK GDP contracts -0.3% mom in April, as services drag

    The UK economy contracted -0.3% mom in April, a sharper decline than the expected -0.1%. The main drag came from the services sector, which fell -0.4% mom and contributed most to the monthly GDP drop. Production also shrank -0.6% mom. In contrast, construction provided a rare bright spot, rising 0.9% mom, though not enough to offset broader weakness.

    Despite the poor April print, the broader picture remains more constructive. GDP expanded 0.7% in the three months to April compared to the prior three-month period, with services up 0.6%, production up 1.1%, and construction up 0.5%.

    Japanese business confidence sours amid tariff fears and profit warnings

    Business sentiment in Japan deteriorated sharply in Q2, with the Ministry of Finance’s survey revealing a broad-based loss of confidence across industries.

    The overall index for large firms slipped into negative territory at -1.09, down from Q1’s modest 2.0. Large manufacturers saw sentiment weaken further from -2.4 to -4.8, while large non-manufacturers experienced a steep drop from 5.2 to -5.7, suggesting that economic uncertainty is spreading beyond export-heavy sectors.

    The survey also highlighted a growing sense of earnings pessimism. Large manufacturers now expect recurring profits to decline -1.2% in the fiscal year ending March 2026, a downgrade from the -0.6% fall seen in the previous survey. Particularly alarming is the auto sector’s outlook, with automakers and parts suppliers projecting a severe -19.8% drop in profits.

    This highlights the mounting concern over the impact of steep US tariffs, which threaten to hit Japan’s flagship export industry hard and weigh on broader economic momentum.

    EUR/USD Mid-Day Outlook

    Daily Pivots: (S1) 1.1429; (P) 1.1465; (R1) 1.1524; More…

    EUR/USD’s rally from 1.0176 resumed by accelerating through 1.1572 resistance. Intraday bias stays on the upside at this point. Next target is 61.8% projection of 1.0176 to 1.1572 from 1.1064 at 1.1927. On the downside, below 1.1504 minor support will turn intraday bias neutral and bring consolidations first, before staging another rise.

    In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 1.1604 support holds.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    23:01 GBP RICS Housing Price Balance May -8% -3% -3%
    23:50 JPY BSI Large Manufacturing Index Q2 -4.8 0.8 -2.4
    01:00 AUD Consumer Inflation Expectations Jun 5.00% 4.10%
    06:00 GBP GDP M/M Apr -0.30% -0.10% 0.20%
    06:00 GBP Industrial Production M/M Apr -0.60% -0.40% -0.70%
    06:00 GBP Industrial Production Y/Y Apr -0.30% -0.20% -0.70%
    06:00 GBP Manufacturing Production M/M Apr -0.90% -0.80% -0.80%
    06:00 GBP Manufacturing Production Y/Y Apr 0.40% 0.40% -0.80%
    06:00 GBP Goods Trade Balance (GBP) Apr -23.2B -20.8B -19.9B
    12:30 USD PPI M/M May 0.10% 0.20% -0.50% -0.20%
    12:30 USD PPI Y/Y May 2.60% 2.60% 2.40% 2.50%
    12:30 USD PPI Core M/M May 0.10% 0.30% -0.40% -0.20%
    12:30 USD PPI Core Y/Y May 3.00% 3.00% 3.10% 3.20%
    12:30 USD Initial Jobless Claims (Jun 6) 248K 251K 247K 248K
    14:30 USD Natural Gas Storage 108B 122B

     



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  • Gold prices head higher as USD gains remain limited

    Gold prices head higher as USD gains remain limited


    • Gold prices extend their gains, heading toward the $3,350 psychological level.
    • The United States and China continue trade talks in London, but USD appreciation is limited.
    • USD and Gold price action are expected to be influenced by US-China talks ahead of Wednesday’s US inflation data.

    Gold prices are trading firm against the US Dollar (USD) on Tuesday, with the precious metal trading near the $3,350 resistance level at the time of writing.

    Ongoing trade talks between the United States and China continue to influence global risk sentiment, helping to stabilize the US Dollar (USD). 

    As US Treasury Secretary Scott Bessent, US Trade Representative Jamieson Greer, and US Commerce Secretary Howard Lutnick continue discussions with China’s Vice Premier He Lifeng for the second day in London, markets remain focused on trade-related developments. 

    Ahead of Tuesday’s meeting, Commerce Secretary Lutnick told reporters that trade talks with China are progressing well and added that he expects the talks to continue throughout the day, according to Reuters.

    These negotiations are expected to continue influencing the direction of the Gold and US Dollar on Tuesday, as investors weigh the potential for eased tensions and improved economic cooperation between the world’s two largest economies.

    Gold daily digest: US-China trade talks in London remain the primary focus for markets

    • On Monday, Kevin Hassett, Director of the US National Economic Council (NEC), added to market optimism in an interview with CNBC, stating, “I expect this to be a short meeting with a firm handshake!”.
    • In a Wall Street Journal comment, Hassett noted that the US anticipates “any export control from the US will be eased and the rare earths will be released in volumes.” Once the more significant issues have been addressed, the US and China are expected to discuss less-urgent matters.
    • Additionally, positive remarks on Monday from US President Donald Trump, affirming that he is getting “good reports” from the meeting, are contributing to keeping market sentiment buoyed.
    • Data released by China’s General Administration of Customs (GAC) on Monday showed that China’s exports to the US decreased by 35% YoY in May. This was the steepest decline since February 2020, when trade was severely disrupted by pandemic-related shutdowns.
    • The expectation that China will release rare earths in volume signals potential relief for the US supply chain. These minerals are crucial for sectors such as technology, defense, and green energy, where they are essential for products like semiconductors, electric vehicles (EVs), and military hardware.
    • These developments are significant not only for geopolitical stability but also for global economic growth forecasts.
    • The next fundamental catalyst on the US economic calendar will be on Wednesday, with the release of US Consumer Price Index (CPI) data for May. Expectations are for headline US CPI to rise by 0.2% on a monthly basis. Inflation is expected to increase to 2.5% YoY, from 2.3% in April.
    • The core CPI, which excludes food and energy prices, is expected to show a 0.3% MoM increase in May compared to 0.2% in April. The YoY figure is also estimated to reflect a 0.1% increase, rising to 2.9% compared to 2.8% in April.
    • The inflation data is an important contributor to interest rate expectations, which drive the direction of the USD and the Gold price. Friday’s Nonfarm Payroll report (NFP), which showed the US economy added more jobs than anticipated in May (139,000 vs. an estimated 130,000), helped ease USD weakness, placing less pressure on the Federal Reserve (Fed) to cut interest rates in the near term. 
    • With stronger employment data increasing the likelihood that the Fed will cut interest rates by 25 basis points in September, the prospect of higher-for-longer interest rates weighs on the non-yielding Gold price, which is inversely correlated with the Greenback.
    • According to the CME FedWatch Tool, market participants expect the Fed to leave interest rates unchanged within the current 4.25% to 4.50% range at the June and July meeting, with a 54.7% probability of a rate cut priced in for September.

    Gold technical analysis: XAU/USD heads toward $3,350

    Gold prices are moving toward the $3,350 level on Tuesday, which is providing immediate resistance for the short-term move. A break above this barrier could open the door for a move toward Friday’s high near $3,375. Further up, the $3,392 resistance level limited the bullish potential last week, followed by the $3,400 psychological level. If buyers clear this zone and bullish momentum gains traction, a move toward the April all-time high at $3,500 may be possible.

    However, the Relative Strength Index (RSI) indicator flattens near the neutral zone of 50 in the daily chart, signalling a lack of momentum and indecision among traders.

    In the event of a downside move, the immediate support for the Gold price is at the 20-day Simple Moving Average (SMA) at $3,303, just above the next psychological support zone of $3,300, and ahead of the 23.6% Fibonacci retracement level of the January-April rise at $3,291.

    The 50-day SMA could then provide an additional layer of support around $3,270, while the tip of a symmetrical triangle chart pattern could provide another important barrier for downside price action at $3,240.

    Gold (XAU/USD) daily chart

    US Dollar PRICE Today

    The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.14% 0.20% -0.01% -0.10% -0.17% -0.12% -0.07%
    EUR 0.14% 0.36% 0.12% 0.07% 0.00% 0.03% 0.10%
    GBP -0.20% -0.36% -0.31% -0.28% -0.35% -0.33% -0.25%
    JPY 0.01% -0.12% 0.31% -0.06% -0.19% -0.19% -0.14%
    CAD 0.10% -0.07% 0.28% 0.06% -0.09% -0.05% 0.03%
    AUD 0.17% -0.01% 0.35% 0.19% 0.09% 0.04% 0.10%
    NZD 0.12% -0.03% 0.33% 0.19% 0.05% -0.04% 0.08%
    CHF 0.07% -0.10% 0.25% 0.14% -0.03% -0.10% -0.08%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).



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  • Gold prices await London talks between the US and China

    Gold prices await London talks between the US and China


    • Gold edges higher as persistent trade tensions and the safe-haven appeal of precious metals boost prices.
    • US-China trade talks are scheduled for Monday, remaining a key catalyst for Gold and US Dollar prices.
    • Gold prices rise above $3,300 with resistance at $3,350.

    Gold prices remained at an elevated level on Monday, despite the start of US-China trade talks in London. Alongside the United States’ (US) 50% tariffs on steel and aluminum imports, Gold has been supported by broader geopolitical tensions, such as the ongoing warfare between Ukraine and Russia over the weekend, which have reinforced Gold’s safe-haven status.

    Gold Daily Digest: Can US-China Talks Lift Safe-Haven Gold?

    • Friday’s Nonfarm Payrolls (NFP) report came in better than expected, which has eased fears of the Federal Reserve (Fed) cutting rates in the short term.
    • On Thursday, Reuters reported that the Canadian Prime Minister called US tariffs “illegal,” while Mexico and the European Union expressed similar frustration.
    • On Wednesday, Mexican President Claudia Sheinbaum called the new tariffs “unjust, unsustainable, and without legal grounds,” warning that if a deal is not reached, Mexico will be forced to respond with retaliatory measures.
    • Canada and the EU have also threatened to retaliate if no progress is made in trade talks this week.

    Gold prices remain under pressure on Monday, retreating from last week’s highs as technical indicators suggest waning bullish momentum. After failing to hold above the $3,339–$3,392 resistance zone, prices broke below short-term support near $3,320 and are now testing the 23.6% Fibonacci retracement level at $3,291. This level has become a key pivot in the near term, with a daily close below it likely to attract fresh selling pressure.

    The broader price action continues to consolidate within a symmetrical triangle, suggesting indecision among market participants. The lower boundary of this pattern is currently under threat, and a confirmed breakdown could expose the ascending trendline support around $3,250–$3,260. Below that, deeper losses could take prices toward the 50% Fibonacci retracement at $3,057, a level that aligns with previous structural support.

    On the upside, any rebound must clear the $3,339–$3,392 region to reassert bullish control. A break above this zone would pave the way toward the $3,500 mark, which remains the medium-term target for Gold bulls. However, with the 20-day Simple Moving Average (SMA) turning flat near $3,299, upside momentum has clearly stalled.

    Momentum indicators also reflect this indecision. The Relative Strength Index (RSI) is currently hovering around 52, indicating neutral sentiment with no immediate overbought or oversold conditions. This suggests that Gold may continue to consolidate unless triggered by a major fundamental catalyst, such as updates to US interest rates or further geopolitical developments.

    Gold’s technical structure has weakened slightly following the breakdown below short-term support on Friday. A decisive close below $3,291 would likely shift the outlook to bearish in the near term, while holding above the triangle base could still offer a path back toward resistance.

    Gold daily chart

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



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  • Markets Eye US-China Trade Talks for Fresh Catalyst

    Markets Eye US-China Trade Talks for Fresh Catalyst


    Asian equity markets opened the week on a positive note, supported by cautious optimism surrounding the high-stakes US-China trade negotiations in London. US Treasury Secretary Scott Bessent, along with Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer, are meeting Chinese counterparts as efforts to revive dialogue intensify. The outcome of these talks could set the tone for broader risk sentiment in the coming sessions.

    Despite the upbeat market tone, traders appear restrained in their positioning. While recent developments — such as China’s approval of rare earth export licenses — hint at a willingness to de-escalate, there’s little in the way of concrete breakthrough yet. White House economic adviser Kevin Hassett tempered enthusiasm by pointing out that China’s release of critical minerals remains below what the US believes was agreed to previously in Geneva. As such, expectations for a definitive deal remain muted, limiting any aggressive risk-on trades for now.

    Currency markets reflect this tempered tone. Aussie and Kiwi are modestly firmer, benefiting from the underlying improvement in sentiment, Dollar and Loonie are trading on the softer side. European majors and Yen are relatively steady in the middle. With most major pairs holding inside Friday’s ranges, the currency space is clearly in wait-and-see mode.

    Beyond trade, inflation will be the other key macro theme this week. The US will release its May CPI and PPI data, alongside the University of Michigan’s consumer sentiment and inflation expectations. Markets are keen to assess whether signs of tariff-driven are beginning to firm. A surprise to the upside could challenge the current market view that the Fed’s next move will be no earlier than Q4, particularly if inflation expectations also pick up.

    Technically, Gold’s extended decline argues that rebound from 3120.34 might have completed at 3403.39 already, with break of near term channel support and bearish divergence condition in 4H MACD. Further fall is now in favor to 3245.23 support first. Firm break there will the solidify the case that corrective pattern from 3499.79 is already in its third leg, and target 3120.34 support and possibly below.

    In Asia, at the time of writing, Nikkei is up 0.89%. Hong Kong HSI is up 0.88%. China Shanghai SSE is up 0.26%. Singapore Strait Times is up 0.15%. Japan 10-year JGB yield is up 0.011 at 1.470.

    China’s CPI falls -0.1% yoy in May, negative for fourth month

    China’s headline CPI stayed in negative territory for the fourth consecutive month in May, coming in at -0.1% yoy, slightly better than the expected -0.2% yoy.

    The persistent softness in overall inflation was largely driven by a sharp -6.1% yoy decline in energy prices, which alone shaved off nearly half a percentage point from the annual CPI reading.

    On a monthly basis, CPI fell -0.2% mom, with energy again dragging down the figure through a -1.7% mom decline.

    In contrast, core inflation, which strips out food and energy prices, rose to 0.6% yoy, the highest level since January.

    Producer price pressures continue to weaken further, with PPI dropping to -3.3% yoy from -2.7% yoy previously, marking the deepest contraction in nearly two years. Wholesale prices have now been stuck in deflation since October 2022.

    China’s trade surplus widens to USD 103.2B in May, US exports slump -34.5% yoy

    China’s trade surplus widened to USD 103.2B in May, exceeding expectations of USD 101.3, even as headline export and import figures undershot forecasts. Exports rose 4.8% yoy, just shy of the 5.0% yoy consensus. Imports fell -3.4% yoy, a sharper drop than the anticipated -0.9% yoy.

    Exports to the US plunged -34.5% yoy, highlighting the entrenched trade tensions despite Washington’s partial tariff rollback in April. However, the impact was cushioned by robust growth in exports to ASEAN (15% yoy), the European Union (12% yoy), and Africa (33% yoy).

    ECB’s Nagel signals Pause, cites maximum flexibility at current rates

    German ECB Governing Council member Joachim Nagel indicated over the weekend that the central bank is likely entering a pause phase after last week’s eighth rate cut in the current easing cycle, which brought the deposit rate to 2.00%.

    Speaking on Deutschlandfunk radio, Nagel also noted that the current level of interest rates offers “maximum flexibility.” And, “We can now take the time to look at the situation first.”

    BoE’s Greene warns on inflation sensitivity, risk of wage-price spiral

    BoE Monetary Policy Committee member Megan Greene acknowledged at a Saturday conference that while UK inflation is moving “in the right direction,” the pace of decline is slower than she would prefer.

    Speaking candidly about April’s upside inflation surprise, Greene stated that while the MPC believes it can “look through” the jump, there remains a “pretty big risk” that price pressures could become more entrenched, especially if second-round effects materialize.

    Greene also highlighted the behavioral shift triggered by the recent cost-of-living crisis, warning that past inflation shocks may have left households and businesses more reactive to even small price increases. That, in turn, could “feed through the wage-price behavior.” S

    He noted that private-sector wage growth remains “way above” the level consistent with the BoE’s 2% inflation target.

    Tariff effects under scrutiny as US CPI, PPI and inflation expectations take center stage

    A relatively quiet week for global economic releases will nevertheless carry key signals for monetary policy in both the US and UK.

    US May CPI report will be front and center, offering insight into whether there is an emerging inflation pickup from tariffs. Headline CPI is expected to accelerate from 2.3% yoy to 2.5% yoy. Core CPI is seen rising to 2.9% after troughing at 2.8% for two months. A rise in both measures would raise concerns that 2025’s slow disinflation trend is reversing just as tariffs begin to seep into consumer prices.

    Additional confirmation may come from upstream price pressures in PPI data, alongside consumer inflation expectations in the University of Michigan’s sentiment survey. If all three elements—CPI, PPI, and expectations—firm, the Fed’s cautious stance would harden further. While markets currently lean toward a September cut, such an inflation environment could shift expectations toward Q4.

    In the UK, attention will turn to April GDP and labor market data. GDP is expected to show a mild contraction of -0.1% mom. But that may be less concerning given signs that post-trade deal clarity with the US could support stronger growth later in Q2. The more pivotal element will be wage growth, which has remained stubbornly high and continues to feed into sticky services inflation—a key concern for BoE.

    Diverging views within the Monetary Policy Committee remain apparent. While some members are inclined to ease, Chief Economist Huw Pill has warned last month that the UK’s weak productivity growth and embedded wage pressures could mirror past inflationary episodes. His remarks highlight that underlying structural risks—especially in the labor market—may prevent BoE from loosening policy too quickly, even if growth remains uneven.

    Here are some highlights of the week:

    • Monday: New Zealand manufacturing sales; Japan GDP final; China CPI, PPI, trade balance.
    • Tuesday: Australia Westpac consumer sentiment, NAB business confidence; UK employment; Swiss SECO consumer climate; Eurozone Sentix investor confidence.
    • Wednesday: Japan PPI; Canada building permit; US CPI.
    • Thursday: Japan BSI manufacturing; UK GDP, industrial and manufacturing production, goods trade balance; US PPI, jobless claims.
    • Friday: New Zealand BNZ manufacturing; Japan tertiary industry index; Germany CPI final; Eurozone industrial production, trade balance; Canada wholesale sales, manufacturing sales; US U of Michigan consumer sentiment.

    AUD/USD Daily Report

    Daily Pivots: (S1) 0.6476; (P) 0.6497; (R1) 0.6513; More…

    AUD/USD recovers mildly today but stays below 0.6536 resistance. Intraday bias remains neutral for the moment. Further rise is in favor as long as 0.6406 support holds. On the upside, decisive break of 0.6536 will resume the rally from 0.5913 to 61.8% retracement of 0.6941 to 0.5913 at 0.6548. However, firm break of 0.6406 will turn bias to the downside for 38.2% retracement of 0.5913 to 0.6536 at 0.6298.

    In the bigger picture, AUD/USD is still struggling to sustain above 55 W EMA (now at 0.6443) cleanly, and outlook is mixed. Sustained trading above 55 W EMA will indicate that rise from 0.5913 is at least correcting the down trend from 0.8006 (2021 high), with risk of trend reversal. Further rise should be seen to 38.2% retracement of 0.8006 to 0.5913 at 0.6713. However, rejection by 55 W EMA will revive medium term bearishness for another fall through 0.5913 at a later stage.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:45 NZD Manufacturing Sales Q1 5.10% 1.10% 3.00%
    23:50 JPY Bank Lending Y/Y May 2.40% 2.40% 2.40% 2.30%
    23:50 JPY Current Account (JPY) Apr 2.31T 2.59T 2.72T
    23:50 JPY GDP Q/Q Q1 F 0.00% -0.20% -0.20%
    23:50 JPY GDP Deflator Y/Y Q1 F 3.30% 3.30% 3.30%
    01:30 CNY CPI Y/Y May -0.10% -0.20% -0.10%
    01:30 CNY PPI Y/Y May -3.30% -3.00% -2.70%
    03:00 CNY Trade Balance (USD) May 103.2B 101.1B 96.2B
    05:00 JPY Eco Watchers Survey: Current May 44.4 43.9 42.6
    14:00 USD Wholesale Inventories M/M Apr F 0% 0%

     



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  • Dollar Struggles, Gold Rally Stalls, Trade Uncertainty Caps Conviction

    Dollar Struggles, Gold Rally Stalls, Trade Uncertainty Caps Conviction


    Global markets remain mixed, reflecting a cautious investor mood amid heightened trade uncertainty and a lack of clear directional drivers. US stocks closed modestly higher overnight, reversing losses from earlier in the session. Asian equities broadly followed the rebound, seemingly brushing off disappointing Chinese manufacturing data. The overall tone, however, remains indecisive, with no strong commitment to risk assets or safe havens.

    In the currency markets, Dollar is recovering slightly after a brief selloff, but still stands as the week’s worst performer. Loonie and Aussie follow behind. Yen continues to lead on safe-haven demand. Kiwi and Euro are also holding firmer, with Sterling and Swiss Franc sitting mid-pack. The lack of clear directional bias reflects the broader market indecision, as traders await clarity on the outcome of key trade negotiations.

    Underlying this market hesitation is persistent uncertainty surrounding global trade. According to a Reuters report, the Trump administration is pressing trading partners to submit their “best offers” by Wednesday, as it pushes to fast-track negotiations ahead of the July 9 expiry of the current 90-day reciprocal tariff truce. The US is requesting commitments on tariff and quota concessions, along with action plans on non-tariff barriers.

    The draft communication from the US Trade Representative warns countries not to assume tariffs will be halted, even if court rulings go against the administration. The letter asserts that the White House intends to continue the tariff program under “other robust legal authorities” if necessary, signaling that tariffs remain a core policy tool in negotiations.

    With legal and diplomatic fronts both in flux, traders are taking a wait-and-see approach. Until there is clarity on the direction of US trade policy—particularly with key partners like China and the EU—market participants are likely to stay sidelined. For now, short-term positioning continues to be dictated more by event risk management than conviction.

    Technically, Gold’s rise from 3120.34 resumed by breaking through 3365.92 resistance. Further rally should be seen to retest 3499.79 high. but strong resistance could be seen there to limit upside on first attempt, to bring more sideway trading in the near term. Nevertheless, decisive break of 3499.79 will confirm larger up trend resumption.

    In Asia, at the time of writing, Nikkei is up 0.07%. Hong Kong HSI is up 1.10%. China Shanghai SSE is up 0.36%. Singapore Strait Times is down -0.26%. Japan 10-year JGB yield is down -0.025 at 1.484. Overnight, DOW rose 0.08%. S&P 500 rose 0.41%. NASDAQ rose 0.67%. 10-year yield rose 0.046 to 4.462.

    Looking ahead, Swiss CPI and Eurozone CPI flash are the main focuses in European session. US will release factory orders later in the day.

    BoJ’s Ueda: Ready to hike if wage growth recovers from tariff drag

    BoJ Governor Kazuo Ueda told parliament today that recently imposed U.S. tariffs could weigh on Japanese corporate sentiment, potentially impacting winter bonus payments and next year’s wage negotiations.

    He acknowledged that wage growth may “slow somewhat” in the near term due to these external pressures. However, Ueda expressed confidence that wage momentum would eventually “re-accelerate”, helping to sustain a moderate growth in household consumption.

    Looking ahead, Ueda reiterated the BoJ’s readiness to adjust its ultra-loose policy if the economy evolves in line with its projections. “If we’re convinced our forecast will materialize, we will adjust the degree of monetary support by raising interest rates,” he said.

    However, he cautioned that uncertainty surrounding the economic outlook remains “extremely high.”

    RBA’s Hunter: AUD’s recent resilience linked to global shift away from USD exposure

    RBA Chief Economist Sarah Hunter addressed the unusual behavior of the Australian Dollar in recent months in a speech today. She highlighted that while initial moves were consistent with past risk-off episodes, the currency’s subsequent rebound against the US Dollar stood out as “more unusual”.

    On a “trade-weighted” basis, AUD has remained broadly stable, even though it has appreciated against the greenback and the Chinese renminbi, while weakening against most other major currencies.

    This divergence, Hunter explained, stems from “offsetting factors”. Global growth concerns have pressured the AUD against safe-haven and cyclical peers, while simultaneous outflows from US assets have weakened the US Dollar.

    Hunter cautioned that it’s too soon to tell whether this trend will persist, but acknowledged that recent market behavior reflects shifting investor sentiment, particularly toward capital reallocation away from US assets. As a result, Australian Dollar’s relative resilience against USD may be underpinned by portfolio rebalancing and perceived relative economic stability.

    Hunter noted that the trade-weighted index has reverted to “pre-shock values”, suggesting minimal net change in the foreign-currency value of Australian exports. However, the “relative move of capital” into Australia, at a time when the US is facing policy and tariff-related volatility, could offer some support to “domestic investment activity”, providing a cushion to the broader economy amid global uncertainties.

    RBA Minutes: 25bps cut chosen for caution and predictability after debating hold and 50bps options

    RBA’s May 20 meeting minutes revealed that policymakers weighed three policy options—holding rates, a 25bps cut, or a larger 50bps reduction—before ultimately opting for a modest 25bps cut to 3.85%.

    The case for easing hinged on three key factors: sustained progress in bringing inflation back toward target without upside surprises, weakening global conditions and household consumption, and the view that a cut would be the “path of least regret” given the risk distribution.

    While members discussed a 50bps reduction after deciding to ease, they found the case for a larger move unconvincing. Australian data at the time showed little evidence that trade-related global uncertainty was materially harming domestic activity. Furthermore, some scenarios might even result in upward pressure on inflation, prompting caution. The Board also assessed that it was “not yet time to move monetary policy to an expansionary stance”.

    Ultimately, the Board judged that to move “cautiously and predictably” was more appropriate.

    Caixin PMI manufacturing drops to 48.3, as China faces marked weakening at start of Q2

    China’s manufacturing sector unexpectedly shrank in May, with Caixin PMI falling to 48.3 from 50.4, well below market expectations of 50.6. This marked the first contraction in eight months and the lowest reading since September 2022.

    According to Caixin Insight’s Wang Zhe, both supply and demand weakened, with a particularly notable drag from overseas demand. Employment continued to contract, pricing pressures remained subdued, and logistics saw moderate delays. Although business optimism saw a marginal recovery, the broader picture points to intensifying headwinds.

    The report highlights the fragile start to Q2, with Wang pointing to a “marked weakening” in key economic indicators and a “significantly intensified” level of downward pressure.

    Fed’s Goolsbee warns against repeating ‘transitory’ mistake on tariff inflation

    Chicago Fed President Austan Goolsbee said in a webcast overnight that tariffs typically lead to a one-time price increase rather than sustained inflation.

    Drawing on textbook theory, he said a 10% tariff would create a 10% rise in prices for imported goods for “one year”, after which the inflationary effect dissipates. Such shocks are usually seen as “transitory” by central banks, Goolsbee explained.

    However, he warned against underestimating potential risks, citing lessons from the pandemic-era supply chain disruptions. “We learned the last time around” not to dismiss inflation too quickly, Goolsbee said, referencing how persistent inflation caught the Fed off guard.

    He added that scenarios combining rising prices and weakening labor markets, a stagflationary mix, present the most difficult challenge for monetary policy, as “there’s not an obvious playbook”.

    USD/CHF Daily Outlook

    Daily Pivots: (S1) 0.8139; (P) 0.8189; (R1) 0.8222; More….

    Intraday bias in USD/CHF stays on the downside as fall from 0.8475 is in progress for 0.8038 low. Strong support could be seen from there to bring rebound, on first attempt. On the upside, above 0.8248 minor resistance will turn intraday bias neutral first. However, decisive break of 0.8038 will confirm larger down trend resumption.

    In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8732) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:45 NZD Terms of Trade Index Q1 1.90% 3.60% 3.10% 3.20%
    23:50 JPY Monetary Base Y/Y May -3.40% -4.20% -4.80%
    01:30 AUD RBA Meeting Minutes
    01:30 AUD Current Account (AUD) Q1 -14.7B -12.0B -12.5B -16.3B
    01:45 CNY Caixin Manufacturing PMI May 48.3 50.6 50.4
    06:30 CHF CPI M/M May 0.10% 0.00%
    06:30 CHF CPI Y/Y May -0.10% 0%
    09:00 EUR Eurozone Unemployment Rate Apr 6.20% 6.20%
    09:00 EUR Eurozone CPI Y/Y May P 2.00% 2.20%
    09:00 EUR Eurozone CPI Core Y/Y May P 2.40% 2.70%
    14:00 USD Factory Orders M/M Apr -3.10% 3.40%

     



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  • Gold price falls below ,300 on strong US Dollar as Trump reignites China tensions

    Gold price falls below $3,300 on strong US Dollar as Trump reignites China tensions


    • XAU/USD drops as strong US Dollar pressures Bullion; tariff uncertainty rattles markets.
    • US core PCE dips in April, but strong data lifts yields, dampening Gold’s appeal.
    • Trump accuses China of violating trade deal, reviving geopolitical and tariff concerns.

    Gold price slumped on Friday as the US Dollar recovered some ground despite witnessing a drop in US Treasury bond yields following a strong inflation report, which keeps traders hopeful that the US Federal Reserve (Fed) will ease policy in 2025. XAU/USD trades at $3,289, down 0.83%.

    Sentiment shifted sour as US President Donald Trump complained that China is not fulfilling the agreement negotiated between both parties in Switzerland. He wrote, “China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”

    Consequently, US equities fell, while the American Dollar recovered from near daily lows, according to the US Dollar Index (DXY).

    Turning to trade-related news, a US Federal Appeals Court reinstated most of Trump’s tariffs imposed on April 2, “Liberation Day,” following a decision by a US Court of International Trade, which blocked most of the duties as they were considered illegal.

    The US Core Personal Consumption Expenditures (PCE) Price Index dipped in April compared to March’s meeting. Other data showed that the University of Michigan’s (UoM) Consumer Sentiment in May’s final reading improved compared to estimates, while inflation expectations declined.

    Gold daily market movers: Tumbles despite soft US inflation data amid US Dollar strength

    • Gold price is pressured due to a strong US Dollar.The DXY, which tracks the US Dollar’s value against a basket of six currencies, edges up 0.11% to 99.44.
    • US Treasury bond yields are falling. The US 10-year Treasury note yield falls two basis points to 4.40%, while US real yields are also edging down by the same amount 2.086%, slightly below the May 29 close.
    • The US core PCE in April showed the evolution of the disinflation process, which was driven by the Fed’s restrictive interest rates. The reading came in at 2.5% YoY, down from 2.6%. Headline inflation came in at 2.1% YoY, below March’s 2.3% rise.
    • Despite witnessing a lower inflation environment, Bullion prices failed to gain traction as US Dollar short positions in the futures market were trimmed in the last week, according to Commitments of Traders (COT) data.
    • The UoM Consumer Sentiment in May improved from 50.8 to 52.2, exceeding estimates on its final reading. It is worth noting that inflation expectations fell. For the 12 months ahead, expectations fell from 7.3% to 6.6%, and for the next five years, they dropped from 4.6% to 4.2%.
    • After the data release, the Atlanta Fed’s GDPNow preliminary reading of economic growth for Q2 2025 rose sharply from 2.2% to 3.8%.
    • Federal Reserve officials crossed the wires on Thursday, emphasizing that the monetary policy is in a good place and that it would take some time to see a shift in the balance of risks for the Fed’s dual mandate.
    • San Francisco’s Fed President Mary Daly said the labor market is in solid shape and revealed that it would not reach the 2% inflation goal in 2025. Despite this, she said that if jobs are solid and the disinflation process continues, it would make sense to cut rates twice as markets expect.
    • Money markets suggest that traders are pricing in 52 basis points of easing toward the end of the year, following the release of US data, according to Prime Market Terminal data.

    Source: Prime Market Terminal

    XAU/USD technical outlook: Tumbles and poised to test $3,250

    Gold price uptrend is intact, though XAU/USD spot prices achieving a daily/weekly close below $3,300 could sponsor some sideways trading action within the $3,250-$3,300 range amid the lack of fresh catalysts ahead of the weekend.

    For a bearish resumption, sellers must drive Gold prices below $3,250, ahead of the 50-day Simple Moving Average (SMA) at $3,221. A breach of the latter will expose the April 3 high turned support at $3,167.

    Conversely, if bulls push XAU/USD past $3,300, the next key resistance levels will be $3,350, $3,400, the May 7 swing high of $3,438 and the record high $3,500.

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



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  • Dollar Reverses as Markets Doubt Lasting Impact of US Tariff Ruling

    Dollar Reverses as Markets Doubt Lasting Impact of US Tariff Ruling


    Dollar initially surged after the US Court of International Trade ruled against President Donald Trump’s sweeping reciprocal tariff orders. Market participants initially interpreted the ruling as a potential turning point in the US trade policy, fueling a rally in the greenback and risk assets.

    However, the greenback’s rally proved short-lived. As the US session opened, the greenback reversed course and turned broadly lower. Traders began to reassess the practical implications of the ruling, with many suspecting that the Trump administration could still find legal or procedural workarounds to reinstate the tariffs.

    In that context, the ruling may have increased legal complexity but done little to reduce the overarching geopolitical uncertainty. Traders are clearly skeptical that the legal setback will lead to a meaningful shift in trade tensions.

    Indeed, skepticism is evident across financial markets. DOW futures, which had gained more than 500 points earlier in the day, gave back almost all of those gains. NASDAQ remained resilient, supported by tech sector optimism, but broader risk appetite appeared to fade. Gold, meanwhile, rebounded above the 3300 level as safe-haven demand returned, signaling that markets are still hedging against unresolved geopolitical and policy risks.

    In currency markets, the shift in sentiment was clear. Dollar is now the weakest performer of the day, followed by Sterling and then Yen. Aussie emerged as the top gainer, while Euro and Kiwi also firmed. Swiss Franc and Canadian dollar are trading in the middle of the pack.

    Technically, intraday bias in Gold is turned neutral first with current recovery. On the upside, break of 3365.92 resistance will revive the case that correction from 3499.79 has completed with three waves down to 3120.34, and bring retest of 349.79 high. Nevertheless, below 3245.23 will extend the corrective pattern with another falling leg.

    In Europe, at the time of writing, FTSE is flat. DAX is up 0.23%. CAC is up 0.63%. UK 10-year yield is down -0.006 at 4.726. GErmany 10-year yield is down -0.005 at 2.551. Earlier in Asia, Nikkei rose 1.88%. Hong Kong HSI rose 1.35%. China Shanghai SSE rose 0.70%. Singapore Strait times rose 0.13%. Japan 10-year JGB yield rose 0.003 to 1.520.

    US initial jobless claims rise to 240k vs exp 230k

    US initial jobless claims rose 14k to 240k in the week ending May 24, above expectation of 230k. Four-week moving average of initial claims fell -250k to 231k.

    Continuing claims rose 26k to 1919k in the week ending May 17, highest since November 13, 2021. Four-week moving average of continuing claims rose 3k to 1890k, highest since November 27, 2021.

    RBNZ’s Hawkesby: OCR in neutral zone, July cut not a done deal

    RBNZ Governor Christian Hawkesby told Bloomberg TV today that another rate cut at the July meeting is “not a done deal” and “not something that’s programmed.”

    With the OCR at 3.25% after this week’s reduction, it’s now sitting within the estimated neutral range of 2.5% to 3.5%. Hawkesby emphasized the central bank has entered a phase of “considered steps,” guided closely by incoming data rather than a preset easing path.

    He acknowledged rising uncertainty, noting that near-term growth headwinds have intensified and both demand and inflation pressures are weaker than they were back in February. He also highlighted the uncertainty surrounding global trade policy, particularly tariff developments, which could play out in various ways.

    NZ ANZ business confidence falls to 36.6, supporting case for further RBNZ easing

    New Zealand’s ANZ Business Confidence index dropped sharply in May, falling from 49.3 to 36.6. Own Activity Outlook, a key indicator of firms’ expectations for their own performance, declined to 34.8 from 47.7.

    Profit expectations also plunged to 11.1, indicating mounting pressure on margins. Although cost and wage expectations eased slightly, they remain elevated, while inflation expectations edged up from 2.65% to 2.71%.

    According to ANZ, the survey paints a mixed picture: the economy is in recovery mode, but businesses continue to face tough operating conditions, particularly in passing on cost increases. The data reinforces the view that RBNZ can afford to support growth through further rate cuts, barring any major inflation or data surprises.

    ANZ expects the OCR to eventually fall to 2.5%, as global headwinds and domestic fragilities persist.

    GBP/USD Mid-Day Outlook

    Daily Pivots: (S1) 1.3440; (P) 1.3481; (R1) 1.3512; More…

    Intraday bias in GBP/USD remains neutral for the moment. With 1.3389 support intact, further rally is expected. On the upside, firm break of 1.3592 will resume larger rally for 100% projection of 1.2706 to 1.3442 from 1.3138 at 1.3874. However, decisive break of 1.3389 will confirm short term topping, and turn bias back to the downside for 1.3138 support instead.

    In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.2870) holds, even in case of deep pullback.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    01:00 NZD ANZ Business Confidence May 36.6 49.3
    01:30 AUD Private Capital Expenditure Q1 -0.10% 0.50% -0.20% 0.20%
    05:00 JPY Consumer Confidence May 32.8 31.8 31.2
    12:30 CAD Current Account (CAD) Q1 -2.1B -3.6B -5.0B -3.6B
    12:30 USD Initial Jobless Claims (May 23) 240K 230K 227K 226K
    12:30 USD GDP Annualized Q1 P -0.20% -0.30% -0.30%
    12:30 USD GDP Price Index Q1 P 3.70% 3.70% 3.70%
    14:00 USD Pending Home Sales M/M Apr -1.00% 6.10%
    14:30 USD Natural Gas Storage 98B 120B
    15:00 USD Crude Oil Inventories 0.3M 1.3M

     



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  • Dollar Surges as US Court Strikes Down Trump’s Reciprocal Tariffs; Risk Appetite Rebounds

    Dollar Surges as US Court Strikes Down Trump’s Reciprocal Tariffs; Risk Appetite Rebounds


    Dollar’s rebound gather extra momentum today, after the US Court of International Trade struck down President Donald Trump’s sweeping reciprocal tariffs, giving markets a fresh catalyst. The court ruled that the reciprocal tariffs imposed in April across multiple countries under claims of correcting trade imbalances exceeded presidential authority under the International Emergency Economic Powers Act. The decision marks a significant legal blow to Trump’s aggressive trade agenda.

    In a strongly worded decision, the three-judge panel concluded that the “Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.” The ruling also invalidated separate tariffs targeting Canada, Mexico, and China under the pretext of combating drug trafficking, stating those measures lacked a direct link to the threats cited. However, tariffs on specific items like steel and aluminum remain unaffected, as they were justified under different statutes not challenged in this case.

    The Trump administration has ten days to comply with the ruling, though it has already filed an appeal to the US. Court of Appeals for the Federal Circuit. While the immediate legal outcome remains uncertain, markets responded decisively to the court’s move.

    The decision sparked a broad risk-on reaction in financial markets, with DOW futures jumping over 500 points and Asian equities advancing, led by gains in Japan. Gold, which had been buoyed by safe-haven flows in recent sessions, fell below the 3250 level as investor sentiment improved. Nevertheless, 10-year Treasury yield remained steady around 4.5%, suggesting that bond markets are taking a more measured view, likely awaiting further clarity from the appeal process and ongoing trade negotiations.

    Dollar dominated currency markets, emerging as the clear outperformer of the day. It was followed by the Aussie and Loonie, both benefiting from the upbeat mood. At the bottom end, Yen is staying at the bottom, while Swiss Franc and Euro also softened. Kiwi and Sterling are positing in the middle.

    Technically, Gold’s break of 3279.22 support suggests that rebound from 3120.34 has already completed at 3365.92. Corrective pattern from 3499.79 should have started another falling leg. Deeper decline should be seen to 55 D EMA (now at 3190.95) first. Strong rebound from there will keep the pattern from 3499.79 a sideway one. However, sustained break of the 55 D EMA will open up deeper fall through 3120.34 to 100% projection of 3449.79 to 3120.34 from 3365.92 at 2980.47, which is slightly below 3000 psychological level.

    In Asia, at the time of writing, Nikkei is up 1.79%. Hong Kong HSI is up 1.07%. China Shanghai SSE is up 0.72%. Singapore Strait Times is down -0.30%. Japan 10-year JGB yield is up 0.003 at 1.521. Overnight, DOW fell -0.58%. S&P 500 fell -0.56%. NASDAQ fell -0.51%. 10-year yield rose 0.043 to 4.477.

    Looking ahead, the European calendar is empty with Switzerland, France and Germany on holiday. Later in the day, US will release GDP revision, jobless claims and pending home sales.

    RBNZ’s Hawkesby: OCR in neutral zone, July cut not a done deal

    RBNZ Governor Christian Hawkesby told Bloomberg TV today that another rate cut at the July meeting is “not a done deal” and “not something that’s programmed.”

    With the OCR at 3.25% after this week’s reduction, it’s now sitting within the estimated neutral range of 2.5% to 3.5%. Hawkesby emphasized the central bank has entered a phase of “considered steps,” guided closely by incoming data rather than a preset easing path.

    He acknowledged rising uncertainty, noting that near-term growth headwinds have intensified and both demand and inflation pressures are weaker than they were back in February. He also highlighted the uncertainty surrounding global trade policy, particularly tariff developments, which could play out in various ways.

    NZ ANZ business confidence falls to 36.6, supporting case for further RBNZ easing

    New Zealand’s ANZ Business Confidence index dropped sharply in May, falling from 49.3 to 36.6. Own Activity Outlook, a key indicator of firms’ expectations for their own performance, declined to 34.8 from 47.7.

    Profit expectations also plunged to 11.1, indicating mounting pressure on margins. Although cost and wage expectations eased slightly, they remain elevated, while inflation expectations edged up from 2.65% to 2.71%.

    According to ANZ, the survey paints a mixed picture: the economy is in recovery mode, but businesses continue to face tough operating conditions, particularly in passing on cost increases. The data reinforces the view that RBNZ can afford to support growth through further rate cuts, barring any major inflation or data surprises.

    ANZ expects the OCR to eventually fall to 2.5%, as global headwinds and domestic fragilities persist.

    FOMC minutes reveal deepening concerns over persistent inflation and trade-led slowdown

    The FOMC minutes from the May 6–7 meeting highlighted growing anxiety among policymakers about the dual threat of persistent inflation and deteriorating growth prospects, largely stemming from US trade policies.

    Nearly all participants flagged the risk that inflation could be “more persistent than expected” as the economy adjusts to elevated import tariffs. This situation, they warned, could force the Fed into “difficult tradeoffs” if inflation stays stubborn while growth and employment begin to falter.

    The Committee agreed that uncertainty surrounding the economic outlook had “increased further”, justifying a cautious stance on monetary policy, “until the net economic effects of the array of changes to government policies become clearer.”

    Fed staff revised their GDP projections lower for 2025 and 2026, citing a larger-than-anticipated drag from recent tariff announcements. Beyond the short-term impact, officials also warned of longer-term structural effects, with trade restrictions likely to slow productivity growth and reduce the economy’s potential “over the next few years.”

    The labor market outlook has also darkened, with staff forecasting the unemployment rate to rise above its “natural rate” by year-end and remain elevated through 2027.

    Inflation forecast was revised higher, with tariffs seen boosting prices notably in 2025, before gradually easing. Inflation is still expected to return to 2% by 2027, but the path there is now more complicated.

    EUR/USD Daily Outlook

    Daily Pivots: (S1) 1.1268; (P) 1.1307; (R1) 1.1329; More…

    EUR/USD’s break of 1.1255 support suggests that rebound 1.1064 has completed at 1.1417. Corrective pattern from 1.1572 is now extending with another falling leg. Intraday bias is back on the downside for 1.1064 first. Break there will target 100% projection of 1.1572 to 1.1064 from 1.1417 at 1.0909. For now, risk will stay on the downside as long as 1.1417 resistance holds, in case of recovery.

    In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 55 W EMA (now at 1.0858) holds.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    01:00 NZD ANZ Business Confidence May 36.6 49.3
    01:30 AUD Private Capital Expenditure Q1 -0.10% 0.50% -0.20% 0.20%
    05:00 JPY Consumer Confidence May 32.8 31.8 31.2
    12:30 CAD Current Account (CAD) Q1 -3.6B -5.0B
    12:30 USD Initial Jobless Claims (May 23) 230K 227K
    12:30 USD GDP Annualized Q1 P -0.30% -0.30%
    12:30 USD GDP Price Index Q1 P 3.70% 3.70%
    14:00 USD Pending Home Sales M/M Apr -1.00% 6.10%
    14:30 USD Natural Gas Storage 98B 120B
    15:00 USD Crude Oil Inventories 0.3M 1.3M

     



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  • Gold price falls below ,300 on strong US Dollar as Trump reignites China tensions

    Gold price slumps beneath $3,300 as Fed Minutes signal stagflation risks and patience


    • Gold drops 0.27% after Fed cites tariff-driven inflation concerns; yields rebound, stalling bullion’s rally.
    • Fed minutes highlight risks of persistent inflation and weakening job growth, prompting cautious rate stance.
    • US bond yields rebound, lifting the Dollar and pressuring Gold below $3,300.
    • Goldman Sachs urges increased Gold exposure amid rising geopolitical risks and central bank demand.

    Gold price extended its losses during the North American session on Wednesday after hitting a daily high of $3,325 earlier in the day, as market participants digested the latest Federal Reserve (Fed) policy minutes. At the time of writing, XAU/USD trades below $3,300, resulting in a solid 0.27% decline.

    On May 6-7, the Fed decided to keep rates unchanged, citing uncertainty about the impact of tariffs on the economy. Officials adopted a patience approach due to increased risks of high inflation and unemployment, fueled by the potential impact of tariffs.

    Policymakers acknowledged some stagflation risks as they noted the “Committee might face difficult tradeoffs if inflation proves to be more persistent while the outlooks for growth and employment weaken.”

    Therefore, the Fed has taken a cautious approach regarding monetary policy, waiting for the “net economic effects of the array of changes to government policies to become clearer.” It is worth noting that the Fed meeting took place before Trump reduced tariffs on China from 145% to 30%.

    Bullion’s rally appears to have stalled during the week, as US Treasury bond yields recovered some of the previous week’s fall, underpinning the US Dollar. However, a surprise dovish tilt in the minutes, the less likely scenario, could drive XAU/USD prices higher.

    On Tuesday, Fox Business News Gasparino, in a post on X, revealed that a framework between the US and India is close to being announced. It should be noted that the US has taken a more flexible approach to trade talks.

    Despite this, the Gold upside remains due to increasing geopolitical tensions between Russia and Ukraine, as well as the Middle East conflict involving Israel and Hamas.

    Goldman Sachs analysts recommended a higher-than-usual allocation to Gold in long-term portfolios, revealed Reuters. They cite elevated risks to US institutional credibility, pressure on the Fed, and sustained central bank demand.

    Ahead in the week, the docket will feature the second estimate for Gross Domestic Product (GDP) in Q1 2025, and the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index.

    Gold daily market movers: Bullion retreats on strong US Dollar and high US yields

    • US Treasury bond yields are rising as the 10-year Treasury note yield increases by four and a half basis points (bps) to 4.493%. Meanwhile, US real yields also advance four bps at 2.171%.
    • The US Dollar Index (DXY), which tracks the buck’s value against a basket of six currencies, rises over 0.33% to 99.89, fueled by an improvement in Consumer Confidence data, which grew the most in four years, revealed the Conference Board .
    • New York Fed President John Williams said that inflation expectations are well-anchored and added that he wants to avoid inflation becoming highly persistent, as that could become permanent.
    • Data revealed that Gold imports to Switzerland from the US rose to its highest level since at least 2012 in April.
    • Besides this, Reuters revealed that “China’s net gold imports via Hong Kong more than doubled in April from March, and were the highest since March 2024, data showed.”
    • Money markets suggest that traders are pricing in 45 basis points of easing toward the end of the year, according to Prime Market Terminal data.

    Source: Prime Market Terminal

    XAU/USD technical outlook: Gold price pullback to challenge $3,250

    Gold prices have consolidated within the $3,280-$3,330 range over the last four trading sessions, as bullish momentum appears to be fading due to technical reasons. Momentum, as measured by the Relative Strength Index (RSI), is aiming toward its 50-neutral line, which if broken, could sponsor a leg-lower in XAU/USD prices.

    For a continuation of the uptrend, bulls must clear $3,300, $3,400 and the May 7 swing high of $3,438. If achieved, Gold’s next goal would be $3,500.

    On the downside, Gold tumbling below $3,250 could expose a move to the 50-day Simple Moving Average (SMA) at $3,211, followed by the May 20 daily low of $3,204.

    Fed FAQs

    Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
    When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
    When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

    The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
    The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

    In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
    It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

    Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.



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  • Gold slips as Trump’s hits pause on EU duties amid thin trading volume

    Gold slips as Trump’s hits pause on EU duties amid thin trading volume


    • Gold price dips over 0.50% as improved sentiment trims haven flows after last week’s 4.86% surge.
    • Trump postpones 50% EU tariffs to July 9, easing short-term trade war fears.
    • Strong Chinese Gold imports and Russia-Ukraine tensions keep the bullish outlook intact.

    Gold price drops more than 0.50% on Monday amid the lack of demand for haven assets after United States (US) President Donald Trump delayed tariffs on the European Union (EU). In the meantime, trading remains thin due to the closure of the United Kingdom (UK) and US financial markets for holidays. At the time of writing, XAU/USD trades at $3,336.

    Market mood improved on Trump’s statement on Sunday, pushing back the enactment of duties on EU products until July 9. Therefore, Bullion is pressured following last week’s gains of over 4.86%, the most significant increase since the week starting on April 7.

    On Friday, XAU/USD extended its bullish move as Trump continued to pressure Apple (AAPL) to make iPhones in the US. If not, 25% of duties would be imposed. At the same time, he escalated the rhetoric against the EU, threatening to impose 50% tariffs on its goods. This drove the golden metal from $3,287 to last week’s highest high of $3,365.

    Despite retreating, Gold prices are set to continue rallying, as Reuters revealed that “China’s net gold imports via Hong Kong more than doubled in April from March, and were the highest since March 2024, data showed.”

    Additionally, geopolitical risks remain high after Russia attacked Ukraine for the third straight night, spurring an angry reaction on Trump.

    This week, the US economic docket will feature April Durable Goods Orders, the Federal Open Market Committee (FOMC) meeting minutes, the second estimate for Q1 2025 Gross Domestic Product (GDP) and the release of the Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge.

    Gold daily market movers: Improvement in risk appetite weighs on Gold prices

    • US Treasury bond yields remain steady. The 10-year Treasury note yield fell two basis points (bps) on Friday to 4.509%. Meanwhile, US real yields were down as well, one 4 bps to 2.179%.
    • Gold price outlook is optimistic, given the fragile market mood toward US assets sparked by the growing fiscal deficit in the United States, which ignited Moody’s downgrade of US government debt from AAA to AA1.
    • The fiscal package approved by the US lower house is projected to raise the debt ceiling by $4 trillion.
    • The US Dollar Index (DXY), which tracks the buck’s value against a basket of six currencies, edged down 0.10% at 99.00, a tailwind for the Dollar-denominated precious metal.
    • Money markets suggest that traders are pricing in 47.5 basis points of easing toward the end of the year, according to Prime Market Terminal data.

    Source: Prime Market Terminal

    XAU/USD technical outlook: Gold’s uptrend to extend to $3,400

    Gold prices retreated slightly, and it seems traders are booking profits amid thin liquidity and low volatility in the US in observance of the holiday. Trump’s inconsistency regarding trade policies could keep prices swinging violently once trading resumes on Tuesday.

    From a technical perspective, Gold’s bull trend remains intact. If buyers achieve a daily close above $3,300, they could test last week’s high of $3,365. If surpassed, the next stop would be the $3,400 figure, followed by the May 7 high at $3,438 and the all-time high (ATH) at $3,500.

    On the bearish side, if Gold drops below $3,300, expect a move to the May 20 daily low of $3,204, ahead of the 50-day Simple Moving Average (SMA) at $3,199.

    Fed FAQs

    Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
    When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
    When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

    The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
    The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

    In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
    It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

    Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.



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  • Risk Appetite Returns After Trump Backs Off Immediate EU Tariff Threat

    Risk Appetite Returns After Trump Backs Off Immediate EU Tariff Threat


    Global markets are showing tentative signs of relief after US President Donald Trump walked back his threat to impose a 50% tariff on the European Union. The abrupt shift to reinstate a July 9 deadline for negotiations has helped ease investor concerns for now. Stocks in Germany and France are trading modestly higher in European session, though the UK market remains closed for holiday. US equity futures are also pointing to a firmer open, suggesting a rebound from last week’s tariff-induced selloff. This shift in tone has also taken some steam out of safe-haven flows. Gold prices dipped slightly as investors rotated back into risk assets.

    The European Commission confirmed that trade representatives from both sides are scheduled to talk later today, describing the development as a “new impetus”. A Commission spokesperson noted that both parties have agreed to fast-track negotiations and remain in close contact, providing hope that a workable framework could still be reached before the “old” deadline.

    In the currency markets, the mildly risk-on environment is supporting higher-beta currencies. Kiwi and Aussie are leading the pack, with Sterling also gaining some traction. On the other hand, traditional safe havens like Yen, Swiss Franc are under modest pressure, while Dollar is also weak. Euro and Loonie positioning in the middle.

    For Gold, as long as 3279.22 support holds, the bullish case for Gold still holds. That is, correction from 3499.79 should have completed with three waves down to 3120.34. Further rise should be seen to retest 3499.79 next. Firm break there will resume larger up trend. Nevertheless, break of 3279.22 will dampen this case and extend the corrective pattern with another falling leg.

    In Europe, the UK is on holiday. DAX is up 1.45% at the time of writing, CAC i sup 0.97%. Germany 10-year yield is up 0.011 at 2.583. Earlier in Asia, Nikkei rose 1.00%. Hong Kong HSI fell -1.35%. China Shanghai SSE fell -0.05%. Singapore Strait Times fell -0.18%. Japan 10-year JGB yield fell -0.052 to 1.496.

    Fed Kashkari: Uncertainty to delay policy at least until September

    Minneapolis Fed President Neel Kashkari warned today that major shifts in US trade policies are clouding the outlook for monetary policy, making it difficult for the Fed to move on interest rates before September.

    While “anything is possible,” Kashkari said in an interview with Bloomberg TV, he’s unsure whether the picture will be “clear enough” by then. Much hinges, he added, on whether trade negotiations between the US and its partners yield concrete deals in the coming months, which could “provide a lot of the clarity we are looking for.”

    The uncertainty, Kashkari explained, is weighing on economic activity. He emphasized the stagflationary nature of the tariff shock, noting that its impact will depend on both the scale and duration of the levies.

    On financial markets, Kashkari acknowledged that rising US Treasury yields might reflect a broader reassessment by global investors about the risks of holding American assets. He suggested that the current bond market reaction could signal a new global paradigm.

    EUR/USD Mid-Day Outlook

    Daily Pivots: (S1) 1.1303; (P) 1.1339; (R1) 1.1402; More…

    Intraday bias in EUR/USD remains on the upside for the moment. Correction from 1.1572 should have completed at 1.1064. Further rise should be seen to retest 1.1572 first. Decisive break there will resume larger up trend to 61.8% projection of 1.0176 to 1.1572 from 1.1064 at 1.1927. On the downside, below 1.1255 minor support will turn intraday bias neutral, and probably extend the corrective pattern with another falling leg.

    In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 55 W EMA (now at 1.0858) holds.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    05:00 JPY Leading Economic Index Mar F 108.1 107.7 107.7
    06:30 CHF Employment Level Q1 5.512M 5.534M

     



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  • Gold surges past ,400 on Israel-Iran war risk, soft US inflation boosts safe-haven demand

    Gold softer after small victory for EU on US tariffs


    • Gold price resides below $3,340 on Monday, and takes back some of Friday’s gains. 
    • Markets rejoice and head into risk-on tone after Trump announced a delay on EU tariffs until July 9. 
    • US debt concerns are in the background but remain lingering, capping the downside for the precious metal. 

    Gold (XAU/USD) price slips on Monday towards $3,330 at the time of writing, while US markets will remain closed due to Memorial Day’s public holiday. The small correction comes after United States (US) President Donald Trump issues a statement on Truth Social that he would extend to July 9 the deadline for the European Union (EU) to face 50% tariffs. The decision came after a call between Trump and European Commission President Ursula Von Der Leyen on Sunday,  and should help the EU broker a trade deal with the Trump administration.

    Although this risk-on euphoria looks tempting to join, this does not mean the rally in the precious metal is over. A softer stance on trade weakens the safe-haven demand for Gold, but the metal’s safety appeal is still strong amid growing concerns about the fiscal position of the US government. Investors remain concerned that Trump’s tax bill, which last week passed the House and will be debated in the Senate, will further increase both the US deficit and debt.

    Daily digest market movers: It is nothing fundamentally changing for the EU

    • US President Trump on Sunday announced that his plans to hit the EU with 50% tariffs would be delayed until July 9 to allow for time for both sides to negotiate a deal. The US leader on Friday had threatened higher-than-expected 50% levies against the bloc, while also warning Apple Inc. that it would be subject to 25% tariffs if it does not manufacture its iPhones in the US, Bloomberg reports. 
    • Josh Gilbert, market analyst at eToro, warned that these delays aren’t bringing any structural changes to Trump’s tariff policy. “Pauses are all well and good for now, but during this time, we need to see more agreements in place to confirm Trump’s more negotiable approach,” he said, Bloomberg reports. 
    • Vietnam’s Prime Minister Pham Minh Chinh has asked the country’s central bank, finance ministry and relevant agencies to study the establishment of a regulated Gold exchange to enable transparent public trading and prevent smuggling and manipulation, according to a statement on the government’s website, Bloomberg reports. 
    • The US Dollar also falls on Monday, extending Friday’s losses, as enthusiasm appears to have faded for the world’s reserve currency this year amid mounting fiscal concerns in the US. Speculative traders remained bearish on the dollar but trimmed their positioning to $12.4 billion in the week ending May 20 from $16.5 billion in the week prior, according to CFTC data reported Friday, Reuters reports. 

    Gold Price Technical Analysis: Nothing going on actually

    Gold takes a step back as investors flee to risk assets following the agreement between Trump and von der Leyen to continue to negotiate about trade. Still, the delay is only a minor one, by just a month, and brokering a trade agreement between the two blocs is nearly impossible to do in such a short time span.. Therefore,  these headlines need to be seen as brief injections of reliefs within an overall narrative that is still supportive for Gold due to heightened uncertainty. 

    On the upside, the R1 resistance at $3,386 is the first level to look out for as resistance. The R2 resistance at $3,415 follows not far behind and could open the door for a return to the $3,440 round level and potentially further course to new all-time highs at $3,500. 

    On the other side, some thick-layered support emerges in case the Gold price declines. On the downside, the daily S1 support comes in at $3,307, safeguarding the $3,300 big figure. Some intermediary support could come from the S2 support at $3,258. Further below, there is a technical pivotal level at $3,245, roughly converging with the S2 support at $3,240. 

    XAU/USD: Daily Chart

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.



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  • Gold surges past ,400 on Israel-Iran war risk, soft US inflation boosts safe-haven demand

    Gold price in United Arab Emirates: Rates on May 26


    Gold prices fell in United Arab Emirates on Monday, according to data compiled by FXStreet.

    The price for Gold stood at 395.50 United Arab Emirates Dirhams (AED) per gram, down compared with the AED 396.53 it cost on Friday.

    The price for Gold decreased to AED 4,613.08 per tola from AED 4,625.02 per tola on friday.

    Unit measure Gold Price in AED
    1 Gram 395.50
    10 Grams 3,955.04
    Tola 4,613.08
    Troy Ounce 12,301.56

     

    FXStreet calculates Gold prices in United Arab Emirates by adapting international prices (USD/AED) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

     

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

    (An automation tool was used in creating this post.)



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  • XAU/USD holds below ,350 as trade war eases

    XAU/USD holds below $3,350 as trade war eases


    • Gold price edges lower to $3,335 in Monday’s Asian session. 
    • Trump set a July 9 deadline for a trade deal with the European Union. 
    • Renewed inflation concerns and recession fears might help limit the Gold’s losses. 

    The Gold price (XAU/USD) attracts some sellers to near $3,335 during the early Asian session on Monday. The de-escalation of the trade war provides some support to the yellow metal. The FOMC Minute will be the highlight later on Wednesday. 

    On Sunday, US President Donald Trump said that he agreed to an extension on the tariff deadline on the European Union (EU) until July 9, rescinding his threat of a 50% tariff from June 1. The easing fears of a global trade war drag the precious metal lower. 

    However, traders will closely monitor the developments surrounding US-Japan trade deals and other major economies’ trade deals for fresh impetus. Any signs of escalating trade tensions could boost the safe-haven flows, benefitting the precious metal. 

    Renewed inflation concerns and a US credit rating downgrade boost could underpin the Gold price. Moody’s downgraded the US long-held ‘Aaa’ credit rating to ‘Aa1.’ The downgrade added fuel to a weakening US Dollar (USD) and lifted the USD-denominated Gold price. 

    Jigar Trivedi, Senior Research Analyst at Reliance Securities, expects the rise in gold prices to continue into the month of June 2025. Trivedi emphasized key drivers like the US credit downgrade, continued Chinese central bank gold purchases, and trade tensions. 

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



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  • Tariff Truce Wobbles at Halfway Mark; Risk Sentiment Falters on Renewed Threats

    Tariff Truce Wobbles at Halfway Mark; Risk Sentiment Falters on Renewed Threats


    Trade war roared back into focus late last week, derailing fragile market sentiment already strained by concerns over the ballooning US deficit. The catalyst came in the form of a sharp threat from US President Donald Trump on European Union imports. This abrupt escalation shattered hopes that the 90-day truce period would lead to calmer trade diplomacy, and instead reignited fears of a broader trade war just as markets were struggling to absorb fiscal uncertainty.

    US equities tumbled in response, with heavy losses across major indices, while European bourses weren’t spared either. Risk aversion swept through global markets, pushing investors toward traditional safe-haven assets.

    Dollar, which had already been under pressure from Moody’s downgrade and debt sustainability concerns, took another hit and ended the week as the worst-performing major currency. Confidence in US assets appears increasingly fragile as both fiscal and trade risks deepen.

    Aussie followed as the second weakest, burdened not just by global risk aversion but also by the dovish tone from RBA earlier in the week, while Loonie also suffered at the bottom.

    In contrast, the Japanese Yen and Swiss Franc surged to the top of the FX leaderboard, clearly benefiting from haven demand. Gold also staged a powerful rally, with its bullish momentum signaling deep market unease.

    Euro and Sterling settled in the middle of the pack. While the Euro showed some vulnerability to Trump’s tariff threat, it remained relatively supported. Sterling, meanwhile, was underpinned by a series of stronger-than-expected economic data, including upside surprises in inflation and retail sales.

    Trade War Returns to Spotlight as Trump’s Tariff Threat on EU Hammers Markets, Dollar Slides

    The global financial markets, which had been preoccupied with US sovereign debt concerns and the impact of a Moody’s downgrade earlier in the week, saw sentiment quickly shift as trade war tensions re-emerged. The trigger came late Friday, when US President Donald Trump declared he is “recommending a straight 50% Tariff on the European Union,” citing frustration with stalled negotiations. The announcement stunned investors and reignited fears of a wider spiral, sending US stocks and Dollar sharply lower into the weekly close.

    Equity markets, which had enjoyed a strong six-week rally driven by optimism from the 90-day tariff truce with major trading partners, were caught off guard. As little tangible progress was made halfway through the truce period, Trump’s shift back to hardline tactics was interpreted as a sign that the administration may be preparing to walk away from negotiation tables. The renewed threat has not only clouded the outlook for trade but also raised concerns over the policy direction in Washington.

    Speaking at a White House event, Trump made clear his stance: “I’m not looking for a deal. I mean, we’ve set the deal. It’s at 50%.” Treasury Secretary Scott Bessent echoed the sentiment, suggesting the tariff threat was intended to “light a fire under the EU.” These remarks hinted at a deliberate strategy to escalate pressure on Brussels ahead of the June 1 deadline.

    In response, European Commission Vice President Maros Sefcovic stated the EU remains “fully engaged” and committed to securing a mutually beneficial deal. He emphasized that negotiations must be “guided by mutual respect, not threats,” and warned the EU stands ready to defend its interests. Despite diplomatic overtures, the tone on both sides suggests little ground has been gained, making further market volatility likely as the deadline nears.

    In summary, the re-ignition of trade tensions with the EU has thrown markets back into uncertainty. With US fiscal policy already under scrutiny and tariff escalation threatening global growth, investors may remain on the defensive until clearer direction emerges, either through a breakthrough in negotiations or a change in Washington’s rhetoric. Until then, volatility and risk aversion are likely to dominate.

    Technically, DOW’s extended decline last week indicates that a short term top was already formed at 42842.04. More consolidations would be seen with risk of deeper decline. But overall near term outlook will stay bullish as long as 38.2% retracement of 36611.78 to 42842.04 at 40462.08 holds.

    However, rise from 36611.78 is seen as the second leg of the medium term corrective pattern from 45073.63 high. So, even in case of another rise, DOW should start to lose momentum again as it approaches 45073.63.

    Dollar Index’s late break of 99.17 support argues that corrective rebound from 97.92 might have completed at 101.97 already. Further decline is now in favor in the near term to retest 97.92 low first. Firm break there will resume the larger down trend to 61.8% projection of 100.17 to 97.92 from 101.97 at 94.40.

    European Stocks Also Hit by Tariff Shock; DAX and CAC Signal Near-Term Tops

    European equities also slumped in tandem with the US on Friday on Trump’s tariff threat. The announcement dealt a direct blow to investor sentiment across the region, with Germany’s DAX and France’s CAC 40 each falling around -1.6% on the day.

    However, Germany’s equity outlook, and to a lesser extent the region’s, should remain underpinned by fiscal expansion at both national and EU levels, which could cushion downside risks and support a medium-term bullish outlook.

    Technically, the late selloff in DAX indicates that 24154.24 record high should already be a short term top. Near term risk is mildly on the downside for pull back to 55 D EMA (now at 22610.12). Nevertheless, strong support should emerge from 38.2% retracement of 18489.91 to 24154.24 at 21989.23 to contain downside to bring rebound.

    CAC should have formed a short term top at 7955.53, and turned into consolidations. Given CAC’s underperformance comparing to DAX, there is risk of dipping through 38.2% retracement of 6763.76 to 7955.53 at 7500.27. But strong support should be seen above 61.8% retracement at 7219.02 to contain downside.

    Aussie Under Fire as RBA’s Dovish Cut Fuels July Easing Bets

    Aussie ended last week as one of the weakest performers among major currencies, additionally weighed down by the dovish 25bps rate cut from RBA. While the move was widely expected, RBA Governor Michele Bullock revealed that the board had actively considered a larger 50bps reduction before settling on the more measured step.

    Bullock also deliberately leave the door open for fasting easing, as she indicated that “if we need to move quickly, we can. We have got space.”

    Alongside the cut, RBA downgraded its 2025 GDP growth forecast from 2.1% to 1.9% and revised year-end CPI projections sharply lower, from 3.7% to 3.0%.

    These adjustments cemented the market’s view that the easing cycle has room to run, with rate futures now assigning more than 50% probability to another cut as early as July and fully pricing in a second 25bps cut by August.

    Technically, AUD/JPY failed to sustain above 38.2% retracement of 109.36 to 86.03 at 94.94, and retreated from there. Focus is now on 92.10 cluster support (38.2% retracement of 86.03 to 95.63 at 91.96).

    Strong rebound from 91.96/92.10 will retain near term bullishness. Further break of 95.63 will solidify the bullish case that whole fall form 109.36 has completed as a three-wave correction to 86.03.

    However, firm break of 91.96/92.10 will argue that the rebound has completed. More importantly, the down trend from 109.36 is likely still in progress for another low below 86.03.

    Gold Eyes Fresh Record High as Safe Haven Flows Persist

    Gold rallied strongly last week, supported by a confluence of factors including persistent concerns over the US fiscal outlook and escalating global trade tensions.

    With global equities showing signs of strain and long-dated US Treasury yields on the rise, capital has flowed steadily into Gold. The precious metal’s resilience suggests it may be gearing up to break above the record high of 3500, especially if risk aversion intensifies in the days ahead.

    Technically, corrective decline form 3499.79 should have completed with three waves down to 3120.34. That came after strong support from 55 D EMA (now at 3177.32) and 38.2% retracement of 2584.24 to 3499.79 at 3150.04.

    Further rise is expected as long as 3279.22 support holds, to retest 3499.79 high first. Decisive break there will resume larger up trend to 61.8% projection of 2584.24 to 3499.79 from 3120.34 at 3686.14 next.

    GBP/USD Weekly Outlook

    GBP/USD’s up trend resumed by breaking through 1.3442 resistance last week. Initial bias remains on the upside this week for 61.8% projection of 1.2706 to 1.3442 from 1.3138 at 1.3593, and then 100% projection at 1.3874. On the downside, below 1.3389 minor support will turn intraday bias neutral again first.

    In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.2843) holds, even in case of deep pullback.

    In the long term picture, for now, price actions from 1.0351 (2022 low) are still seen as a corrective pattern to the long term down trend from 2.1161 (2007 high) only. However, firm break of 1.4248 resistance (38.2% retracement of 2.1161 to 1.0351 at 1.4480) will be a strong sign of long term bullish reversal.



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  • Dollar Selloff Accelerates on Fiscal, Trade, and FX Policy Risks

    Dollar Selloff Accelerates on Fiscal, Trade, and FX Policy Risks


    Dollar came under broad selling pressure in Asian session, with fresh technical signals suggesting that the near-term recovery has already run its course. Also, the selloff appears to be gathering pace on a range of fundamental concerns.

    One focus is on Capitol Hill, where the House of Representatives is expected to vote on a multitrillion-dollar spending and tax package backed by US President Donald Trump. The bill is projected by nonpartisan analysts to add US 3 to 5 Trillion to the national debt, further exacerbating fiscal sustainability concerns in the wake of the Moody’s downgrade last Friday.

    Simultaneously, ongoing trade negotiations with major partners — including the EU, Japan, and China — have hit apparent roadblocks, reintroducing geopolitical friction into already cautious markets.

    Adding to Dollar’s vulnerability is the backdrop of the G7 finance ministers’ meeting underway in Canada. With concerns that US officials may be quietly welcoming a weaker Dollar to cushion trade headwinds and debt concerns, any perceived shift in post-meeting communiqué could further undermine confidence in the greenback.

    In the currency markets, risk-off tone is building up. Swiss Franc leads as the strongest performer this week so far, followed by Euro and Yen. The Dollar is the weakest, with Loonie and Aussie close behind. Sterling and Kiwi are hovering in the middle.

    Technically, Gold’s rally accelerates along with the selloff in the greenback. The break of 3265.74 resistance solidifies the case that correction from 3499.79 has completed with three waves down to 3120.34. Further rise is expected as long as 55 4H EMA (now at 3215.81) holds. Retest of 3434.76/3499.79 resistance zone should be seen next.

    In Asia, at the time of writing, Nikkei is down -0.21%. Hong Kong HSI is up 0.50%. China Shanghai SSE is up 0.39%. Singapore Strait Times is down -0.31%. Japan 10-year JGB yield is up 0.006 at 1.529. Overnight, DOW fell -0.27%. S&P 500 fell -0.39%. NASDAQ fell -0.38%. 10-year yield rose 0.006 to 4.481.

    Looking ahead, UK CPI is the main focus in European session. Later in the day, Canada will release new housing price index.

    Fed’s Musalem warns tariffs still a threat despite US-China truce

    St. Louis Fed President Alberto Musalem cautioned that even with the 90-day trade truce between the US and China, the current level of tariffs could still have “significant” short-term effects on the economy.

    In a speech overnight, he warned that tariffs are likely to “dampen economic activity” and further weaken the labor market. At the same time, tariffs could raise inflation both directly, through higher import prices, and indirectly, by triggering broader cost increases in domestic goods and services.

    Musalem outlined two potential monetary policy responses depending on how persistent the inflationary effects of tariffs prove to be.

    If the price impacts are temporary and inflation remains controlled, then it may be appropriate for the Fed to “look through” the short-term inflation spike and consider easing policy to cushion the labor market.

    However, if inflation proves stickier and starts to unanchor long-term expectations, Musalem argued that restoring price stability should take precedence, even at the cost of weaker growth and higher unemployment.

    “History tells us that restoring price stability is more costly for the public… if inflation expectations are not well anchored,” Musalem said.

    Fed’s Bostic: Tariff impact to surface as front-running shielding fades

    Atlanta Fed President Raphael Bostic warned that the economic effects of recent tariffs may be set to emerge more visibly, as businesses begin to exhaust their earlier stockpiling and “front-running” strategies.

    Speaking on the sidelines of a conference, Bostic said that “a lot of the tariff impact to date has actually not shown up in the numbers yet,” but the strategies used to insulate against cost shocks — such as building up inventories — “are starting to run their course.”

    As these buffers fade, Bostic expects that changes in prices could follow soon, offering a clearer view of how tariffs will impact both inflation and consumer behavior. “We’re about to see some changes in prices, and then we’re going to learn how consumers are going to respond to that,” he noted.

    Given the heightened uncertainty, Bostic maintained a cautious tone on policy. “We should wait and see where the economy is going before we do anything definitive,” he said.

    Japan’s US-bound exports fall -1.8% yoy as tariffs and strong Yen Bite

    .Japan’s export growth slowed to just 2.0% yoy in April, marking the weakest pace since October 2024.

    Notably, shipments to the US fell -1.8% yoy — the first decline in four months — as demand for automobiles, steel, and ships weakened. Exports of automobiles alone dropped -4.8% yoy by value, impacted by a stronger Yen and reduced demand for high-end models.

    The decline coincides with the imposition of 25% US tariffs on Japanese auto, steel, and aluminum exports, alongside the 10% blanket levy applied to most trade partners under the current US trade regime.

    Trade with Asia remained more resilient, with exports rising 6.0% yoy. However, shipments to China dipped -0.6% yoy.

    On the import side, Japan saw a -2.2% yoy contraction, resulting in a trade deficit of JPY -115.8B.

    Seasonally adjusted figures show a -2.7% mom drop in exports and a -1.4% mom drop in imports, with the adjusted trade deficit widening to JPY -409B.

    Australia’s leading index falls to 0.2%, growth pulse fades

    Australia’s Westpac Leading Index slowed from 0.5% to 0.2% in April, signaling a loss in growth momentum.

    According to Westpac, the above-trend growth seen earlier this year has “all but disappeared,” primarily due to rising global trade uncertainty and weaker commodity prices.

    While these external pressures dominate, domestic factors such as a slowing labor market and only modest support from interest rate cuts are also contributing to the loss of momentum.

    The overall picture suggests a stalling in the already tepid recovery, with GDP growth expected to reach just 1.9% by the end of 2025, well below historical averages.

    Following RBA’s recent 25bps rate cut to 3.85%, Westpac expects a cautious pause at the next policy meeting on July 7–8. The central bank is likely to await further clarity from the Q2 inflation data due at the end of July before considering additional easing.

    USD/CHF Daily Outlook

    Daily Pivots: (S1) 0.8256; (P) 0.8309; (R1) 0.8337; More….

    USD/CHF’s downside accelerations suggests that corrective recovery from 0.8038 has already completed with three waves up to 0.8475. Intraday bias is back on the downside, and break of 0.8184 support will solidify this bearish case. Further break of 0.8038 will resume larger down trend to 61.8% projection of 0.9200 to 0.8038 from 0.8475 at 0.7757 next. On the upside, above 0.8347 minor resistance will delay the bearish case and turn intraday bias neutral again first.

    In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8765) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:45 NZD Trade Balance (NZD) Apr 1426M 500M 970M 794M
    23:50 JPY Trade Balance (JPY) Apr -0.41T -0.19T -0.23T -0.29T
    01:00 AUD Westpac Leading Index M/M Apr -0.01% -0.11% -0.15%
    06:00 GBP CPI M/M Apr 1.10% 0.30%
    06:00 GBP CPI Y/Y Apr 3.30% 2.60%
    06:00 GBP Core CPI Y/Y Apr ` 3.60% 3.40%
    06:00 GBP RPI M/M Apr 1.50% 0.30%
    06:00 GBP RPI Y/Y Apr 4.20% 3.20%
    12:30 CAD New Housing Price Index M/M Apr 0.10% 0.00%
    14:30 USD Crude Oil Inventories -0.9M 3.5M

     



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