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Gold's record rally falters when bulls are confronted with Fed rate expectations and a stronger dollar
The expectation of U.S. tightening of monetary policy and the strength in the dollar has taken some wind out?of a "perfect storm" that was driving an upswing?in gold prices since 2023. Prices are now vulnerable?around $4,000/ounce, as interest rates unfold. Gold's reversal raised questions about the durability of its record-breaking rally, even though geopolitical risks, fiscal deficits, and central bank purchases continue to support bullion in the long-term. The spot gold price has dropped 25% after hitting a record of $5,595 back in January. This is because the Iran War sparked a rally in oil prices and increased bets for rate hikes. This has reduced the appeal of gold as a safe haven -- similar to past extreme shocks. Prices fell to a 6-month low on Friday. Aakash Doshi is the head of metals and gold strategy at State Street Investment Management. Doshi believes that gold could bounce back if the Middle East conflict eases, and oil drops to $80 per barrel. Gold could become a safe haven in the long term as fiscal deficits increase and geopolitics fragments due to the Iran conflict. KEY TECHNICAL BREAK Gold was at $4.188 per troy-ounce on Friday, after reaching its lowest level in November at $4.022 on Thursday. The strong U.S. job data released last week boosted rate-hike betting and sent gold below the 200-day moving median for the first two-and-a-half-year period. One precious metals trader believes that the dynamics of the market have changed. This closely watched technical level, which is now acting as a resistance at $4.446, suggests a change in the market's dynamic. In 2025, gold surged by 64%. This was the highest in 46 years. Investors sought to reduce risks associated with U.S. President Donald Trump’s trade tariffs and Federal Reserve independence, as well as the war in Ukraine and Russia. Adrian Ash, BullionVault's head of research, said that analysts had been focusing on Trump's world disorder but it seems now that the huge gains last year were driven in part by expectations for rate cuts. According to Ash, managed short positions on COMEX Gold were at their lowest level since January 2025 during the week ending June 2. This leaves plenty of room for bearish bets. Standard Chartered's analyst?Suki cooper estimates that 270 tons or more of gold held in exchange traded funds is in a loss-making situation at prices under $4,250. At $4,000 that number will increase to 298 tonnes. Outflows from ETFs that are gold-backed totaled 16 tons in May and 7 tons during the first week in June. In India, the physical demand for gold is sluggish due to seasonal factors. Bullion trades at a significant discount. Nicky Shiels is the head of metals strategies at MKS PAMP. He expects that gold prices will be rangebound in the coming months, "until more strategic tailwinds or catalysts emerge".
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Venezuela: Oil spillage from Trinidad and Tobago may harm fishing and environment
Venezuela's government announced on Friday that an?oil?spill from Trinidad & Tobago puts?fishing? and the environment in danger. The government released a statement in which it stated that the spill was "much larger than the one in May" and confirmed the drift of pollutants towards Venezuelan waters. It did not provide any further details on the extent of this spill, but said satellite imagery had confirmed its existence. Venezuelan Foreign minister Yvan Gil requested compensation from Trinidad and Tobago for an oil spill in the country's far east in?May. Trinidad and Tobago said that it was using its Air Guard, Coast Guard and Drones to locate the purported oil leak and had requested the coordinates of the spill from Venezuela. Trinidad Energy Minister Roodal moonilal said that the Air Guard and Coast Guard had been sent out to conduct reconnaissance on the sea and use drones to determine the truth. Moonilal stated that the island's Foreign Ministry had also contacted Venezuela's Embassy in Port of Spain to get more information. Venezuela's Foreign Ministry asked Trinidad and Tobago for measures to "prevent future incidents" and added that it "reserves the right to take appropriate actions before?the competent International bodies to determine responsibility." The relationship between the two countries has been tense for a period of?14 months since Trinidad's newest government stated that it supported U.S. action which led to Nicolas Maduro, former Venezuelan president being arrested. Reporting by Aida Peaez-Fernandez, Curtis Williams and Emelia Sithole Matarise; Editing by Chizu nomiyama and Mark Porter
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Shares of Copasa Brazil priced at 49.03 Reais
In a Friday filing, the company revealed that its share offer for a 'privatization of Brazilian sanitation company Copasa was?priced?at 49.03 reais ( $9.61) per share, totaling almost 8.4 billion reais. The price represents a 16% discount compared to yesterday's closing price of 58.50 Reais. However, it is still above the Minas Gerais government's minimum price of 47.23 Reais. The pricing was first reported by the local newspaper Valor Economico on Thursday. Copasa stated that 'power firm Equatorial in its role as strategic investor was exclusively allocated the shares in priority tranche. This totaled nearly 114.1 millions, or 66.67% shares originally offered and 30% total share capital. In May, the government of Minas Gerais in Brazil's southeast region launched a share offer of over $1 billion to relinquish control of Copasa. Copasa is a utility that provides sanitation services to 12 million Brazilians. Equatorial was awarded the role of strategic investor this month after filing a bid for 49.03 reais per share. The company was not competing, since a consortium that included Aegea's?shareholders and sanitation firm Aegea decided to withdraw from the process.
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BlackRock has a new chance to retain NYC pension assets despite climate worries
BlackRock has a chance to continue managing New York's pension funds as City Comptroller Mark Levine launched a rebidding process widely on Friday, despite the fact that his predecessor had called for the city to drop the manager because of its climate record. Brad Lander, Levine’s predecessor Brad Lander, recommended in November that major city pension funds stop using BlackRock and instead rebid their public equity index mandates. Lander's move was in response to BlackRock's retreat from climate concerns. The asset manager had been putting less pressure on portfolio companies, as Trump appointees gained control of the finance sector. Levine, however, has not been in a hurry to carry out Lander's wishes when it comes to his oversight of pension fund holdings. This includes $127 billion in public equity investments. Of this amount $80 billion is passive index products. BlackRock and State Street are the two largest managers of these funds. BlackRock manages $62 billion in public equities across all?public equity for the city. Zohran Mamdani, the mayor of New York City, has never spoken out about BlackRock despite having influence over city pensions and campaigning as Lander's ally. Mamdani’s office hasn't responded to any questions regarding his intentions. Pension boards have extended bids on the public equity index service several times since 2017. The new rebidding is a major inflection point in the asset's life cycle. A spokesperson for Levine responded, "All managers are welcomed to bid on this," when asked if Levine thought?BlackRock might?continue to work. We cannot let these relationships run on autopilot. Levine stated that he was looking forward to working closely with his fellow trustees in order to select managers who meet the highest standards of performance. State Street and BlackRock did not immediately respond to a request for comment. A number of Republican officials, some ?from fossil-fuel-producing states, have withdrawn money ?from BlackRock and other money managers, accusing ?them of basing investment decisions on social or environmental issues. The winning bidders for New York City pension contracts must still meet the fund's existing climate standards.
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Zimbabwe's gold state miner has plans to double production by 2029, as expansion projects are underway.
According to the 'production reports' made available to journalists on Friday, Zimbabwe's state owned gold mining company Mutapa Gold Resources plans to double its annual output to 220,000-ounces-worth by 2029. This is after it secured?funding? for an expansion project. According to documents, Mutapa, the largest gold producer in the country, produced 104,626 pounds of gold during the financial year ending March 31. This is a 10% drop from the previous year, mostly due to lower quality. The company announced that it had received $75 million in funding from?Zimbabwean bankers, about half of the required amount for its Shamva Hill project. This will?increase the mine's production to almost 80,000 ounces per year from 24,000 currently. The project will start in August, located about 100 km north-west from Harare. Mutapa is currently negotiating with lenders abroad to cover the remaining capital requirement. The remaining production will be derived from an expansion of the Jena mine of the company, which is scheduled to begin in the fourth quarter of 2026. It will also come from improved output from its Freda Rebecca Mine and efforts to include?materials from artisanal miner. Mutapa, which is owned by Zimbabwe's sovereign?fund, plays a key role in the country's plans to increase gold production. The country aims to produce 50 metric tonnes of gold this year, up from the record 46.7 tons produced last year. Gold exports in Zimbabwe reached $1.19 billion during the first quarter of 2026 compared to $579 million during the same period last year. Zimbabwe's gold exports will account for $4.61 billion in 2025. This is nearly half the $9.7 billion total value of Zimbabwe's exports. (Reporting and editing by Jan Harvey; Chris Takudzwa Muronzi)
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Students at anti-Prabowo demonstrations claim that Indonesia is heading for bankruptcy
On Friday, hundreds of Indonesian students rallied in Jakarta to 'protest' the spending priorities set by President Prabowo's government and to protest this week's decision of raising gasoline prices. Students marched to the iconic Bundaran HI landmark in central Jakarta, calling their protest "Heading towards Bankrupt Indonesia". Organisers claimed that police and military personnel prevented some protesters from reaching the designated location. The government used subsidies to maintain gasoline prices in Southeast Asia's biggest economy, despite an increase in global oil prices due to the Iran war. The budget pressures from Prabowo’s ambitious spending plans are increasing, resulting in a significant price increase earlier this week. The students, dressed in their?yellow-and-blue alma mater jackets?, carried posters that included slogans like "Cancel fuel price hike" and "Wall of Shame", which was used to describe Prabowo’s cabinet. Students also asked cars passing by to honk in support. On Friday evening, police stood by as dozens of protesters left. Yatalathof Imawan is a student leader at the University of Indonesia. She said that the protesters have five demands. These include the cancellation of Prabowo’s village cooperatives and free meals programmes, as well as the lowering of the prices of staple foods and fuel. Rafael Arreva, a student protester in front of police blockade, said that "wasteful spending for free meals led to a situation fiscal where the subsidies originally provided were withdrawn." Muhammad Qodari said that Friday, the chief of the presidential communication office, had stated that the protests are democratic and that the government is listening to the public's opinions. He said that the government had cut unnecessary spending, and that the free meal program was meant to protect public health. Students and activists have also criticised Prabowo's expansion of military involvement in civil affairs. They fear that it will drag Indonesia back into the authoritarian regime it experienced under former President Suharto. "We want?to show that things aren't okay. "We don't really want Indonesia to go bankrupt. But these behaviors prove that Indonesia will be bankrupt in terms of democracy, morality, and economics," Yatalathof stated. A? As they approached the protest site, witnesses saw that hundreds of military and police personnel blocked hundreds of students. When some protesters attempted to break through the police lines and metal barriers set up to block their path, there were scuffles. Prabowo critics see the free'meals' programme as inefficient and prone to financial leakage. They also believe that it is a way to gain political support from remote areas. Many children have also suffered from food poisoning after eating meals provided under the program, which raises questions about oversight and governance. Reporting by Heru Aprihanto, Ananda Teressia, Johan Purnomo and Stanley Widianto. Editing by Gibran Pishman, John Mair, David Stanway
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India's chief economist says that equities are less tax-efficient than bonds.
India's Chief Economic Adviser V. Anantha Nageswaran stated on Friday that the case for changes to capital gains tax on equities was weaker than bonds. This suggests that the government does not see a need to make further adjustments to its tax regime. India exempted institutional foreign investors from capital gains taxes on government securities last week. The move was made to attract more "capital" at a moment when foreign equity outflows are surging, oil prices are high, and the currency is under pressure. South Asia is the third largest oil consumer and importer in the world. It ships about 90% of its crude oil. It's also one of the most vulnerable countries to war-related disruptions of global energy supplies. The sustained increase in oil prices could hinder the economy, inflation and government finances. This is especially true when El Nino, a weather phenomenon which often predicts droughts, is looming. Nageswaran, a broadcaster for NDTV, said that the Reserve Bank of India’s 6.6% economic growth forecast for fiscal 2027 is realistic. However there are downside risks of 20-30 basis point. Nageswaran's estimates for fiscal 2027 were made in?February before the Middle East conflict. Nageswaran said that the nation's fuel retail stores may not need to pass on much more in terms of higher oil costs to consumers, if global prices are as expected by financial markets to fall for a full year. In May, state-owned fuel retailers increased prices four times.
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What just happened? Five charts to summarize the financial week
Open Interest (ROI),?will give you a summary of the week's financial performance with five charts every Friday. We will highlight the major trends, but also some surprising and sometimes overlooked moves. This week we have said a lot, now let's rely on the data. (1) LOSS LEADER ANNA SZYMANSKI. ROI Editor-in Charge: IPOs by loss-making firms have accounted for an increasing share of the total IPO proceeds in the last two years - amid the AI boom – after equity issuance dropped in 2022 due to the increase in interest rates. The trend is set to continue with Elon Musk's $75 billion SpaceX IPO, particularly with OpenAI and Anthropic on the horizon. Is this merely laying the foundation for the next technological age or an indication of overexuberance? Or both? Only time will tell. (2) END OF AN ERA? RON BOUSSO is a columnist for ROI Energy. OPEC’s share of world oil production has dropped since the start of 'Iran War and the closing of Strait of Hormuz. It will be difficult for the producer group to regain its strength. (3) NIMBY MIKE DOLAN: According to a recent /Ipsos survey, only one third of Americans approves of the rapid pace of data-center construction that supports artificial intelligence. Most Americans would be opposed to having one built within their community. (4) SAFETY FINAL JAMIE MCGEEVER, ROI Markets columnist: Gold is in free fall, even though inflation?is on the rise and geopolitical risks remain sky-high. Gold is down by nearly 30% since its peak in January above $5,500/oz. It is also on the verge of falling below $4,000 again for the first time since November. (5) COMEBACK The liquefied natural gas market in Asia has quietly recovered from the'shock' of losing nearly?20% to the Iran conflict, as the top buyer China is showing signs of returning to it. According to Kpler's data, Asia is on track to receive 21.83 metric tons of LNG in June. This will be the highest amount for five months, and an increase year-over-year. Asia's LNG exports dropped to a six year low of 18.74 metric tons in April after the closure of the Strait o f?Hormuz stopped shipments. Qatar had shipped 80.9 metric tons of LNG in 2025. The opinions expressed are solely those of their authors. These opinions do not represent the views of News. News is committed to the Trust Principles and to maintaining integrity, independence and neutrality.
BlackRock has a new chance to retain NYC pension assets despite climate worries
BlackRock has a chance to continue managing New York's pension money as City Comptroller Mark Levine launched a rebidding process on Friday, despite the call from his predecessor for the city not to use the manager due to its climate record. Brad Lander, Levine's former predecessor in office recommended in November that major city pension funds stop using BlackRock and rebid their public equities mandates. Lander's move was in response to his perception of BlackRock retreating on climate issues, and the asset manager placing less pressure on its portfolio companies as appointees from the U.S. president Donald Trump took over the oversight of the financial industry. Levine, however, has not been rushing to implement Lander's wishes in overseeing the pension fund investments that include $127 billion in public equity investment products. Of this amount $80 billion is passive index products. BlackRock and State Street manage a large portion of these funds. BlackRock is responsible for $62 billion in public equity investments across the city. Pension boards have renewed the contracts for public equity index services for two consecutive three-year periods since 2017. Levine's rebidding is a potential turning point for these assets. A spokesperson for Levine responded that "all managers are welcome" to bid, when asked whether Levine thought BlackRock would continue to work on the project. We cannot let these relationships run on autopilot. "I look forward to working together with my fellow trustees in order to select managers who meet our highest performance standards," Levine stated in a press release.
Pension funds are increasingly putting pressure on large asset managers to reflect their views about climate change and social issues through proxy voting and other financial processes. Dutch pension fund PFZW announced in September that it had stopped investing into stock funds managed BlackRock due to concerns about the New York-based company's voting record in sustainability issues. ?A number of U.S. Republican officials, some from fossil-fuel-producing states, have taken similar steps for opposite reasons, accusing ?BlackRock and others of over-emphasizing ?the same concerns. BlackRock, and its rivals, have developed programs to allow investors to directly influence proxy voting, thereby shifting the responsibility away from asset managers.
New York City Mayor Zohran Mdani hasn't spoken out about BlackRock, despite having some influence over city pension funds. He was once a Lander supporter and campaigned on his behalf. Mamdani’s office hasn't responded to any questions regarding his opinions on pension assets. BlackRock's spokesperson stated in an email that they were "proud" that New York City was a client for a long time. State Street declined to comment immediately. The State Street pension fund did not immediately comment.
(source: Reuters)