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Gold prices rise as US data weakens and optimism over Trump-Xi meeting is tempered
Gold gained on Friday, and investors were looking forward to the U.S. payroll report. This was due out this week. As of 0548 GMT, spot gold was up by 0.3%, at $3,363.33 per ounce. Bullion is up 2.3% this week. U.S. Gold Futures rose 0.4% to $3387. Trump and Xi held a rare call between leaders on Thursday to discuss escalating tensions in trade and disagreements over minerals. However, key issues are still unresolved. Tim Waterer is the chief market analyst of KCM Trade. He said that the initial excitement for risk appetite after the Trump-Xi phone call has begun to fade, allowing gold to creep upward. Last week, the number of Americans who filed new claims for unemployment benefits reached a record high. Investors await the U.S. Nonfarm Payroll data at 1230 GMT after a series of data this week that highlighted a softening labor market. The economists polled predicted that non-farm payrolls would increase by 130,000 jobs by May, and the unemployment rate will remain at 4.2%. Waterer stated that "the upcoming NFP could be a catalyst for a break-out if the data produced a significant miss either side of expectations." Federal Reserve policymakers stated that inflation is a greater concern than the cooling of the labor market, which suggests a longer hold on monetary policies adjustments. Gold is often viewed as a safe haven asset. It tends to do well in times of economic uncertainty, and when interest rates are low. This week, the high price of gold dampened purchases in major Asian cities. In India, discounts reached their highest level in more than a month. Silver spot fell by 0.7%, to $35.92 an ounce. This is near the 13-year high. Platinum rose by 1.7%, to $1149.85, and palladium gained 0.7%, to $1012.60. All three metals are headed for weekly gains.
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Tesla falls as Trump-Musk's bromance soured. Stocks are on alert for payrolls
Asian shares fell on Friday, as investors prepared for the important U.S. payrolls data. Tesla also suffered heavy losses due to the public spat between Elon Musk and President Donald Trump. The markets are wary after a string of weak economic data, and they're worried about a surprise downturn in the payrolls report due later that day. This would increase fears of stagflation, while increasing pressure on the Federal Reserve. Tesla shares rose 0.8% after hours trading, after plummeting 14% overnight and wiping out $150 billion of market value. Trump had threatened to stop government contracts for Elon Musk's businesses after the relationship, which was once very close, deteriorated into an open and bitter disagreement. Trump told Politico, when asked about their relationship, that "it's fine" and that White House staff had arranged a phone call with Musk on Friday to try to find a solution. Nasdaq and S&P futures both rose by 0.3%, while losses in European stocks futures were reduced to just 0.1%. MSCI's broadest Asia-Pacific share index outside Japan fell 0.2% Friday from its eight-month high. The index is still on track for a 2.1% weekly increase. The Hang Seng in Hong Kong fell 0.5% and the blue chips of China dropped 0.2% as a phone call between Trump's and Xi Jinping's offered little clarity on how to ease trade tensions. Luke Yeaman is the chief economist of the Commonwealth Bank of Australia. He said: "I believe that the fact they are talking and that the channels of communication are opened is a good thing." "But it is clear that there are many tensions and that neither party wants to give away too much... There is not a great deal of goodwill with which to improve the trade relations." The majority of Asian shares are slightly down, but Japan’s Nikkei has been a bright spot, rising 0.4% and helping to reduce its weekly decline to 0.7%. WAIT FOR PAYROLLS Payrolls report expectations have been dampened by weaker-than-expected labour data. This includes a 47% jump in Challenger's layoffs year-on-year and a major surprise on the downside in ADP private payrolls. Forecasts predict a gain of 130,000 new jobs in May with the unemployment rate remaining at 4.2%. A sudden weakness in the U.S. economy could trigger a rate cut and cause a massive rally in Treasuries. The futures market indicates that there is little chance of a rate reduction until September. This is 93% priced-in, and another move will likely come in December. The yields on benchmark 10-year Treasuries remained flat at 4.3887 percent, after rising 3 basis points over night to recover from a 1-month low. In a client note, analysts at TD Securities said that they expect payrolls in May to print below consensus levels of 110,000. In recent weeks, the markets have been focusing solely on tariffs and debts. Macro has taken a backseat. We may not have enough information to help catalyze a renewed focus on macroeconomics, but we do expect that downside surprises will cause a greater market reaction. The dollar rose 0.2% against its major counterparts on Friday, just a little above a six week low due to soft economic data that dented the U.S. Overnight, the euro reached a six-week high of $1.1495 after the European Central Bank lowered rates. However, it also signaled the nearing end of the year-long cycle of policy easing. Investors are no longer expecting a move to be made in July. The final move is more likely to occur in October or in December. On the commodities market, oil prices are slightly lower than last week but they will likely rise by a large amount this week due to supply concerns. U.S. Crude Futures fell 0.4% to $63.12 per barrel, but rose 3.8% in the past week. Gold prices rose 0.4%, to $3,366.78 per ounce. They are up 2.3% for the week.
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Indian dealers offer steeper discounts on ASIA GOLD as price rally dampens demand
The gold discounts in India reached their highest level in over a month this week, due to a rise in prices that were near record highs. Meanwhile, the rising rates in other major Asian cities also dampened demand. On Friday, domestic gold prices traded at around 98.300 rupees for 10 grams, having rebounded from a monthly low of 90.890 rupees and approaching the all-time record of 99.358 rupees. Indian dealers were forced to offer discounts due to the price spike Up to $56 per ounce less than official domestic prices. This includes a 6% duty on imports and a 3% tax on sales. Prices have increased, which has really affected demand. "Harshad Ajmera, wholesaler JJ Gold House of Kolkata, said that there were few buyers this week. The monsoon, which started earlier than usual in India this year, is usually a time when gold demand in India remains low. A Mumbai-based bullion seller with a private banking firm said that jewellers have stopped making purchases due to the lean season. They also don't wish to accumulate high-cost inventories. Dealers in China, the world's largest gold consumer, charged premiums between $10 and $14 per ounce above the global benchmark spot rate. Last week, gold bullion was traded at par or a $15 premium. Hugo Pascal is a precious metals dealer at InProved. He said that the increased gold price has negatively affected Chinese demand. In Hong Kong, gold In Singapore, the price was $0.30 to $1.30 higher. Gold traded at par prices with a premium of $2.50. We've also seen wholesalers selling due to high prices, said Brian Lan. In Japan, bullion Traded anywhere between a discount or premium of $0.5 over spot prices.
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The oil price is expected to rebound this week after US-China trade talks resume
Oil prices fell on Friday, but are on track to gain their first weekly increase in three weeks following the resumption of trade talks between U.S. president Donald Trump and Chinese President Xi Jinping. This has raised hopes for stronger growth and demand in two of the world's largest economies. Brent crude futures dropped 19 cents or 0.3% to $65.15 per barrel at 0441 GMT. U.S. West Texas Intermediate Crude lost 20 cents (0.3%), to $63.17 after having gained around 50 cents Thursday. Both benchmarks are on course to end the week higher, after two weeks of falling. Brent is up 2.1%, and WTI is up 4% this week. China's official Xinhua News Agency said that trade talks between Xi Trump were held at Washington's request. Trump said that the conversation had ended in a "very good conclusion" and added that the U.S. is "in very great shape with China, as well as the trade agreement." According to Melanie Joly, Canada has also been in trade discussions with the U.S. The Prime Minister Mark Carney is directly in contact with Trump. The oil market continues to be volatile with the news of tariff negotiations, and data that shows how the U.S. levies and trade uncertainty are affecting the global economy. Analysts at BMI (a Fitch affiliate) said that the possibility of increased US sanctions on Venezuela, which would limit crude exports, and an Israeli strike against Iranian infrastructure could add upside risks to prices. The price of oil will continue to fall in the next quarters due to both increased production by OPEC+ producers and non-OPEC producers. Saudi Arabia, the top exporter of crude oil to Asia, has cut its July crude price for Asia near the two-month low. This was a lower price drop than expected, after OPEC+ agreed in July to increase output by 411,000 barrels a day. The Kingdom had pushed for a larger output increase as part of a broader plan to regain market share and discipline the over-producers within OPEC+. This grouping includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia. (Reporting and editing by Sonali Freed and Jamie Freed; Sudarshan Varadhan)
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MORNING BID EUROPE-Trump-Musk feud shakes markets pre-payrolls
Stella Qiu gives us a look at what the future holds for European and global markets. The most expensive divorce ever could cost you a lot of money. The bromance-turned-to-brawl between U.S. President Donald Trump and billionaire Elon Musk sparked a 14% drop in Tesla shares overnight, wiping out $150 billion in market value. Trump has also threatened to cancel government contracts worth tens and tens billions of dollars with SpaceX. Investors haven't lost sight of the U.S. Payrolls Report that will be released later today. After a week of weak economic data, markets are wary of any negative surprises. After assessing the inflationary impact from Trump's tariffs, the Federal Reserve has been hesitant to cut rates. But the Trump-Musk spat was not without wider implications for markets. Bitcoin prices fell 4% over night as investors realised that Trump's support may not last forever. Asian technology shares fell in line with Wall Street, pushing most stock markets of the region into negative territory. Japan's Nikkei, however, was the exception. It rose 0.3%. In the morning of Friday, there were some signs that tempers might be cooling. Trump told Politico "it's fine" when asked about the split and Tesla stock prices stabilized in after-hours trade. Investors found little to celebrate in the meantime about the telephone call between Trump and Chinese president Xi Jinping on trade, which resulted in little more than a promise to continue to speak. Forecasts for May's U.S. payrolls predict a gain of 130,000 new jobs, while the unemployment rate remains at 4.2%. Fed funds futures indicate that there is little chance for a rate reduction until September. However, a cut at this time has been priced in about 90% with a second expected in December. Markets were subdued by fears of a negative surprise in payrolls. Wall Street futures are mostly flat, and European markets will open lower with EUROSTOXX futures down by 0.2%. On the currency market, the euro hit a six-week peak of $1.1495 over night after the European Central Bank reduced rates. However, it signaled that the policy easing cycle was coming to an end. Investors have given in to the idea of a July cut, but the final decision is expected in December. The following are key developments that may influence the markets on Friday. German Industrial Output and Trade Data for April Retail sales in the Eurozone for April Payrolls of non-farm workers in the U.S. for May
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Wall Street Journal, June 06
These are the most popular stories from the Wall Street Journal. These stories have not been verified and we cannot vouch their accuracy. Boston Consulting Group has fired two North American Partners involved in a joint Israeli-American effort for the distribution of humanitarian aid to Gaza. Senate Republicans in the United States are working on a proposal that would protect some NASA programs against large cuts proposed by White House. People familiar with the transaction have confirmed that Iran ordered thousands of tonnes of ballistic missile ingredients from China. The country is seeking to regain its military strength as it talks with the U.S. about the future of its nuke program. Humana, second-largest Medicare insurer, told congressional staffers it would support measures that would curb billing practices that result in billions of extra payments for the industry. Staffers and The Wall Street Journal viewed a document that was viewed by the staffers. U.S. president Donald Trump spoke with Chinese leader Xi Jinping on Thursday and suggested that after the call, one of the points leading to a break down in trade negotiations--the exportation of rare-earth mineral which is critical to the U.S. automotive industry--had already been addressed. Israel's military announced that it had targeted an underground drone facility located in southern Beirut, on Thursday. This was one of the largest strikes against Hezbollah assets in recent memory since a ceasefire agreement was reached in November.
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ASM Australia sees a surge in enquiries for rare earths amid supply shortage
Australian Strategic Materials reported on Friday that customers are increasingly interested in rare earth alloys and metals produced at its South Korean critical metals facility, as a result of China's restrictions on exports. The Korean Metals Plant of critical metals is one of only a few plants outside of China that can produce rare earth alloys and metals commercially. The shares of the company jumped up to 29.1%, to A$0.655. This was a new high for more than 3 weeks. However, they then pared some gains. The benchmark index for the broader market edged down by 0.1%. ASM said that it had received purchase orders for rare earth alloys from U.S. based Noveon Magnetics Inc. and Vacuumschmelze owned by the private equity firm ARA Partners. After providing USA Rare Earths with rare earth samples, the company has been in talks with other parties about future sales. It has also delivered 19 metric tons of rare earth metal to Magnequench - a division from Neo Performance Materials, located in Canada. In April, China, which produces 90% of the world's rare-earth minerals, implemented export restrictions on strategic minerals as a response to tariffs imposed by U.S. president Donald Trump. The company said that due to China's export bans, there are more disruptions in the supply of rare earths. It is therefore positioned to supply alternative supplies to the rest the world.
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GHD Tackles Offshore Wind Noise Impacts with New Modelling Kit
Engineering specialist GHD has unveiled a new subsea noise modelling program designed to mitigate the environmental impacts of offshore wind farms.GHD's solution, the RAT (R Acoustics Toolbox), has been developed to address challenges related to underwater noise by providing a bespoke, web-based interface that utilizes existing algorithms in a customizable manner.Developed using R programming language, the RAT is said to enhance efficiency and accuracy in underwater noise modelling. The program automates processes such as transect generation and data handling, which were previously done manually, and represents complex numerical data visually, making it easier to understand and analyses.The company is conducting impact assessments for Australia’s nascent offshore wind developments, with underwater noise becoming a crucial component of these studies.Underwater noise models are essential for predicting impacts on marine life, and the limited availability of commercial software solutions has historically inhibited the ability to conduct comprehensive assessments.The advanced underwater noise modelling program has already been successfully deployed on oil and gas projects in the Middle East, submarine cables, defense projects across Australia, and geophysical surveys in the U.K.Looking ahead, GHD plans to continue enhancing the RAT by adding features such as full movement models to simulate how species respond to noise over time"The algorithm spits out a huge amount of data - 10 kilometers long and 500 meters deep. We built a system to represent those numbers visually, making it easier to understand, even for experienced modelers,” said Marco Velasco, GHD's Senior Engineer in the Air & Noise Service Line."We will be using this program on upcoming wind farm projects in Australia. It will be a huge asset in terms of mitigating and managing noise impacts to marine fauna as a result of these offshore renewable projects,” added Pri Pandey, GHD Service Line Leader - Air & Noise.
Treasury yields fall as investors focus on tariff talks
Investors watched the progress of trade negotiations, and awaited Friday's crucial employment report.
The dollar dropped and gold remained unchanged. All three indexes of the stock market were slightly higher than their European counterparts in the early trading.
Sam Stovall is the chief investment strategist at CFRA Research, a New York-based firm.
The markets will be in a sideways motion until July, when we can better gauge the impact of tariffs on Q2 earnings and economic growth. We'll also have a clearer idea of what could happen to the rest of this year.
The top European negotiator said that trade talks between the United States are moving forward. He added that the U.S. tariffs on metals have doubled since Wednesday. This is not helping the negotiations. China's restrictions on vital mineral exports has caused concern among automakers around the world, who are concerned that shortages could disrupt global supply chains.
Trump said in a post on social media that Xi was "extremely difficult to deal with" and suggested that a quick resolution to trade disputes between the two world's largest economies may prove elusive.
Stovall stated that "Tariff threats keep interest rates high, and investors are worried about the slowing global economy."
ADP, a payroll processor, reported that the U.S. Private Sector added 37,000 new jobs in the last month. This is 69.2% less than what analysts expected to see on Friday from the Labor Department, which will release a more comprehensive report. Survey data also showed that the U.S. service sector contracted last month. Prices paid, an inflation indicator, reached their highest level since November 20,22.
The Dow Jones Industrial Average rose by 47.33 points or 0.12% to 42,568.56, while the S&P 500 gained 11.49 points or 0.19% to 5,981.86. The Nasdaq Composite also rose by 36.59 points or 0.19% to 19,436.37.
After Berlin approved a tax relief package for corporations, European stocks rose and Germany’s benchmark index reached a new record high. This was despite survey data showing that euro zone business activity is stagnating and Germany’s services sector has posted its biggest contraction in over two years.
The MSCI gauge of global stocks rose by 0.49%. The pan-European STOXX 600 Index was up 0.56%. Europe's FTSEurofirst 300 index grew by 0.54%.
The Nikkei soared 0.80% to 37,747.45, while the MSCI broadest Asia-Pacific share index outside Japan closed at 1.31%.
The dollar shook amid trade talks, mixed economic data and uncertainty. The index, which measures the dollar's performance against a basket including the yen, the euro and other currencies, fell by 0.41%, to 98.76. Meanwhile, the euro rose 0.52%, at $1.1429.
The dollar fell 0.67% against the Japanese yen to 143.03.
Investors watched for signs that tariff talks were progressing and looked forward to payrolls data.
The yield on the benchmark 10-year U.S. notes dropped 8.3 basis points, to 4.377% from 4.46% at late Tuesday. The 30-year bond rate fell 8.1 basis point to 4.9019%.
The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve fell by 6.8 basis points, to 3.889%.
Crude prices fluctuated and ended the day slightly higher, as OPEC+ production increases offset supply concerns arising out of Canada's wildfires.
U.S. crude climbed 0.03% to $63.43 per barrel. Brent dropped to $65.47 a barrel, down by 0.24% for the day.
Investors waited for employment and trade data to see if they could gain ground on the dollar. Spot gold increased 0.85% to $3380.37 per ounce. U.S. Gold Futures increased 0.4% to $3363.50 per ounce.
(source: Reuters)