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The gold ETFs may see new outflows due to rising bets about Fed monetary tightening
Analysts warn that investors could continue to bet on rate hikes and cause a new outflow of money from exchange-traded funds backed by gold. This could push down the already falling price of gold. On Wednesday, spot gold prices fell below a psychologically important level of $4,000 an ounce for the first since November 2025. This was due to a stronger dollar and expectations that interest rates would remain high. Carsten Menke, Julius Baer's analyst, said that "ETF flows closely reflect U.S. monetary policies as shown by the buying and sale of physical backed products". GOLD ETFS STILL OUTFLOWING IN EARLY JUNE World Gold Council data indicates that gold-backed ETFs experienced net outflows totaling 16 metric tonnes in May. These outflows continued into the first half of this month, but funds registered their highest weekly net inflows ever last week. Analysts at ING stated that "while recent inflows may indicate that selling pressure is easing, ETF Demand will likely remain less supportive than in 2025." Standard Chartered said in a report that more than 200 tonnes of gold held in exchange traded funds is in a loss-making situation at the current?price level. Gold that does not yield is usually subject to higher rates. Gold's record-breaking rally of 2025 was largely due to the expectation that U.S. Fed Reserve would lower interest rates in 2019. This led spot prices up to a high of $5.594.82 an ounce. The rising cost of energy in the aftermath of the Iran War has fueled inflation fears, causing central banks, including the Fed, to adopt a hawkish tone, and investors to increase their bets for rate increases, instead. Gold prices have fallen by around 29% since their peak in January. "Rising rates forecasts and huge AI cash-raising suggests a bullish outlook for the U.S. economy, if not the global economy," said Adrian Ash. He is head of research at BullionVault, an online marketplace. Investors are focusing their attention elsewhere at the moment, not on gold. ETF VS SECTOR DEMAND Some?major bankers, while remaining?constructive about gold, have identified a softening ETF demand as an increasing headwind for the metal's future upside. Morgan Stanley's forecast of $5,200 per ounce gold for the second half 2026 is based on evidence that lower oil costs are influencing a more dovish outlook. Goldman Sachs has also toned down its optimism by lowering its December forecast for gold prices and its projections of ETF demand. Analysts believe that central bank purchases, another key driver of gold's rally in the past year, will likely remain a major source of support. Suki Cooper is an analyst with Standard Chartered. She said: "If the official sector continues to grow quickly, it can compensate for any shortfalls when it comes to ETF demand." Ashitha Shivaprasad reported from Bengaluru, and Veronica Brown edited the story.
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Lingyi iTech, a supplier to Apple, prices a Hong Kong IPO at $1.06 billion to tap AI demand
Lingyi iTech, a Chinese company, priced its Hong Kong initial public offering (IPO) at HK$10.18 ($1.06bn), allowing it to raise HK$8.3bn ($1.06bn), which will be used to expand its AI capabilities. Apple's supplier is looking to capitalize on the rising demand for AI computing and advanced technology. In its prospectus, it stated that approximately HK$3,07 billion or?37.6%, of the IPO proceeds would be used to upgrade?core manufacturing process and increase production capacity. The next three years will see around HK$1.71bn invested in the manufacturing of emerging technologies such as high-density AI server hardware, humanoid 'robot hardware and AI optic communication infrastructure. The global demand for AI infrastructure is soaring as companies increase their spending on data centres, high performance computing and next generation devices. Glenn Yin is the director of research for brokerage ACCM. He said, "I expect investor interest will be'supported by current enthusiasm about?AI supply chain and the improved tone on the Hong Kong IPO market." Investors will likely price and trade Lingyi as a company that specializes in advanced manufacturing components, rather than a pure AI-based play. They are more focused on valuation, earnings, and customer concentration. Lingyi expects to announce the level of investor interest in its Hong Kong public offering, international offering, and allocation results on June 25, The trading of its shares will begin at the Hong Kong Stock Exchange on June 26th, 9:00 am local time. Lingyi shares listed in Shenzhen rose 10% on Wednesday to their highest level since May. The company was founded in 2006 by Zeng Fangqin. It supplies parts for laptops, smartphones and tablets. Apple, Huawei and Samsung are among its clients. Lingyi is one of six companies who launched Hong Kong-based offerings last week. The launches coincide with a stabilisation of global markets following the U.S. Iran agreement in the Middle East. According to LSEG data, Hong Kong IPOs, second?listings, and other Hong Kong securities have raised more than $21.5 billion this year. This is double the amount raised in the same period of 2025.
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UK watchdog considers day traders' $1.32m offer for a crisis fund
Eleven commodity day traders have offered to donate PS1million ($1.32 million) to a fund for crisis situations as part of a deal that will end a three year investigation by Britain's market regulator into possible violations of competition law. The Financial Conduct Authority announced on Wednesday that it considered the traders' obligations appropriate. This included changing how they handled sensitive information, annual training and a payment likely to exceed any FCA penalty. The traders who mainly traded in?energy futures have proposed to arrange a contribution to Crisis and Resilience Fund. This is a government scheme which?provides financial support to families and individuals with low incomes. The traders who traded commodities like natural gas and crude oil futures were members of Futures Trading Facilities. This group was owned and run by one of the traders and another individual. The FCA expressed concern that the traders exchanged information frequently about their trading intentions in the future, their current trading positions, and their recent orders or transactions and that there might be coordinated trading strategies between May 2020 and November 2019. The FCA has requested feedback by July 14th from all interested parties. It has to consult with the FCA on its intention to accept these commitments. The FCA could close the investigation without concluding whether or not there was a violation of law. In a press release, the FCA said that it had "reached no opinion" on whether competition law was violated. "Offering commitments doesn't amount to an admission that a?competition laws infringement has occurred and the traders in this case have not made such an admission." Day traders are those who trade with their own money and try to make money from price fluctuations in the short term. They avoid keeping open positions overnight. The FCA is allowed to accept commitments before making a final decision.
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Gold drops below $4,000/oz due to strong dollar and hawkish Fed signals
On Wednesday, spot gold prices fell below the psychologically important?level? of $4,000 an ounce for the first time since 2025. This was due to a stronger U.S. dollar and growing expectations that interest rates would remain high. Dollar-priced gold is now more expensive to holders of other currencies. After the U.S. Central Bank struck a hawkish tone at its most recent policy meeting, traders have increased their bets that interest rates will rise in the U.S. this year. They also continue to worry about inflationary pressures due to the Iran War. Tai Wong, an independently-owned metals trader said that the market is pricing in a rate increase as early as September, due to a Fed that has become more hawkish. A soaring dollar, at 13-month highs, combined with lower expectations of inflation are also putting pressure on precious materials. He added that "for gold, there's support at just under $3.900, and central bank purchases are continuing, so a crash is unlikely. However, expect a long period of consolidation, as the gold market is no longer in favor." When interest rates increase, gold becomes less appealing to investors because it does not offer a yield. Spot gold has lost more than $1500 per ounce since it reached a record high of $5,594.82 at the end of January. ING analysts have cut their gold predictions. They now expect prices to average $4.300 per ounce in the third quarter of 2026, and $4.600 in the last, compared to their previous projections.
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Lingyi iTech, a supplier to Apple, prices a Hong Kong IPO at $1.06 billion to tap AI demand
Lingyi iTech, a Chinese company, priced its Hong Kong IPO at HK$10.18 ($1.06bn), allowing it to raise HK$8.3bn ($1.06bn), which will be used in part to expand its AI capabilities. Apple's supplier is aiming to capitalize on the rising demand for AI computing and advanced equipment. In its prospectus, it stated that approximately 37.6%, or about HK$3,07 billion, of the IPO proceeds would be used to upgrade core manufacturing processes and increase production capacity. The next three years will see a total of?HK$1,71 billion invested in the manufacturing of high-density AI server, humanoid robotic hardware and AI optical communications infrastructure. The demand for AI infrastructure has risen as companies increase their spending on high-performance computers, data centres and next-generation devices. Lingyi expects to announce on June 25,?the level of investor interest in its Hong Kong public offering and international offering, as well as the allocation results. The trading of its shares will begin at the Hong Kong Stock Exchange on 26th June, 9:00 am local time. This is subject to the global offer becoming unconditional. The company was founded in 2006 by Zeng Fangqin. It supplies parts for laptops, smartphones and tablets. Apple, Huawei, and Samsung are among its clients. Lingyi is one of six companies who launched Hong Kong-based offerings last week. PT Merdeka?Resources Indonesia, one of the six, set its share price at HK$26.60 per share for Wednesday's Hong Kong sale, hoping to raise up HK$2,39 billion ($304.84 mln). These launches coincide with a stabilisation of the global markets following an agreement between the U.S. and Iran in Middle East. According to LSEG data, Hong Kong IPOs and second listing have raised $21.5 billion this year. This is more than double what they would have done in 2025.
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Venezuela will reveal its $240 billion debt load ahead of restructuring, FT reports
The Financial Times reported that Venezuela was preparing to reveal a $240 billion debt pile, which is larger than expected, as it prepared for what could be one of the largest sovereign debt restructurings in history, according to sources familiar with its plans. Centerview Partners, a U.S.-based advisory firm, was hired by the country to assess its debts. The country has been in default since 2017 and President Nicolas Maduro, who was captured by U.S. troops in January, is in default. Analysts estimated the total to be between $150 and $200 billion. Centerview Partners declined comment. The FT reported that Caracas was planning to publish its 'assessment' by the end June. However, the FT also said that it may be published in early July. Venezuelan bonds, which had been retreated over the last month following a sharp rally after Maduro was captured, rose as much as one cent per dollar in response to the report. This also applied to those issued by the state oil company PDVSA. The FT also added that a Macroeconomic Framework Analysis, due to be released by the end this month, would estimate South America's annual economic production at around $100 billion. This implies a debt-to GDP ratio?above 200%. Tellimer, a research firm, said that the higher-than-expected estimate of debt could affect bondholders’ "recovery expectations" -- or what creditors can expect to recover after restructuring. The risk is greater "if the final creditor perimeter (from Caracas's perspective) is wider than expected, and if competing claims from those who want to be paid back by Caracas dilute a bondholders' recovery", they said. A representative of the Venezuelan Creditor Committee, who is a legal expert, declined to comment.
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The ECB predicts that the Iran energy shock will have a 0.4-point impact on growth in the Eurozone.
According to the European Central Bank, based upon 'current energy prices' and 'previous episodes, it is expected that the energy shock from the Iran war will reduce the economic growth in the eurozone by 0.4 percentage point this year. Fuel prices have increased for energy-importing Euro zone due to the attack on Iran, and the resulting closure of the Strait of Hormuz. The ECB has reduced its growth estimates two times since March and raised borrowing costs this month. The ECB economist Johannes Gareis examined a series?of oil shocks since 1985 along with indicators of economic activity and private consumption, as well as consumer prices, short- -and long-term rates of interest, to estimate the impact of 'the Iran conflict. According to an ECB Bulletin, "Using the current 'oil futures curve' and assuming geopolitical supply shocks will account for the majority of implied oil price fluctuations in 2026," the war in the Middle East could reduce the real GDP growth in the euro zone by 0.4 percentage points in the first year. The impact of the episode is expected to increase gradually over the course of the year, unlike in previous episodes. This is due to the substantial rise in oil prices that's expected in the second quater of 2026, and the longer-term path implied by the futures curve." The ECB anticipates that the eurozone economy will grow by?0.8% in this year's, 1.2% next and 1.5%?2028. Since these projections were made public, the United States has signed a ceasefire agreement with Iran and started talks. Reporting by Francesco Canepa, Editing by Kevin Liffey
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Stocks stabilize as technology recovers, dollar gains
On Wednesday, stocks recovered from a plunge in technology shares on the back caution over overstretched AI values. Meanwhile, crude oil prices dropped to four-month lows while the dollar rose to a one-year high. The technology stocks that were hard hit on Tuesday edged higher ahead of Micron's earnings, whose chips are key to the AI boom. Investors chose the dollar as a safe haven because sentiment was fragile. Michael McCarthy, a market analyst with Moomoo Securities Australia, said that the price action on markets in the past seven trading days was alarming. Not only when it fell, but when it rose as well. When markets move rapidly in either direction it is a sign that there's instability. The wild swings of Asian stocks overnight, which saw South Korea’s Kospi reverse Tuesday’s 10% drop into a 3.5% increase on Wednesday, did not translate to high volatility in Europe. DOLLAR 'FEAR PREMIUM' CITED The regional stock market was essentially unchanged for the day. The?15% drop in shares of Rheinmetall after media reports that the German government was planning to cancel a multi-billion euro frigate project delayed for years, was partially offset by gains made in heavyweight luxury and tech stocks. U.S. Stock Futures rose between 0.2% and 0.4%. The dollar rose against a basket major currencies for the third day in a row, reaching its highest level in over a year. The strategists at Scotiabank believe that the dollar is overvalued, given the expectations of at least one rate increase from the Federal Reserve in this year. This has boosted the currency. They said that the dollar continues to enjoy a 'fear premium,' due to persistent concerns about geopolitics in general and the U.S./Iran Conflict specifically. STRAIT of HORMUZ On Wednesday, oil prices dropped more than 2%, continuing this week's losses, and trading at near four-month lows. This was on the back of signs that more tankers stuck in the Gulf will be moving?out of Strait of Hormuz. The outlook is uncertain, as the U.S., and Iran, have given conflicting reports on the key elements of the peace agreement, such as nuclear inspections, and control of strait. The yield on the benchmark U.S. 10 year notes fell by 1 basis point to?4.48%. The dollar's strength was a major factor in the euro's decline on Wednesday. Investors lowered their expectations that the European Central Bank would raise rates more than they had expected this year. They also increased the likelihood that the Federal Reserve will increase borrowing costs. The euro traded at $1.1345, its lowest level in over a year. It was down for the third day. The euro has already lost more than 2.5% so far in June, and is on track to have its worst month since July. The yen also fell on the day. It traded around 161.695. This kept markets on edge over a possible currency intervention designed to support the?battered Japanese yen. The minutes of the Bank of Japan’s latest?meeting at which interest rates were raised to a 31 year high of 1.00% showed that policymakers discussed the rising inflation risks. Some called for faster rate increases in order to bring borrowing costs closer to levels considered neutral to the economy. Gold prices continued to fall, with the dollar rising, and fell 1.5%, or $4,045 per ounce. This is near two-week lows. (Additional reporting from Satoshi Sugiyama in Tokyo Editing done by Lincoln Feast.)
McGeever: Whisper it, but there's a chance that the US job market has turned a corner.
After the Trump administration's immigration crackdown, there has been a long-standing "low hire/low fire" mentality in the U.S. job market. This is due to a weak labor demand that is offset by dwindling labor supply. This delicate balance could be shifting in the right direction.
There is no evidence of a "jobpocalypse", driven by AI, yet.
This 'puts the spotlight on the non-farm payrolls May report due on friday, which is expected to show an increase of net 85,000 jobs with the unemployment rate remaining at 4.3%. This would be an excellent result compared to where the labor markets were at the end last year.
In the first four month of this year, monthly job gains averaged around 76,000. This is not a record-breaking number, but it's a significant improvement over the average for last year of less than 10,000.
It is also well above the rate needed to keep the unemployment rate down. According to a Federal Reserve document in April, this so-called "breakeven rate" has dropped so dramatically that economists believe it's close to zero.
Even if the economy was growing at its potential, payrolls could drop by up to 100,000 in one or two months of this year. In this scenario, 85,000 is a good number. The current average for the year to date and the forecasted 85,000 for May are also impressive.
Reasons to be cheerful
Recent indicators are also encouraging.
This week, the so-called "JOLTS", or Job Openings and Labor Turnover Survey data showed that the number of job openings in April was the highest for two years. The rate of growth was also the fastest in six years. The caveat is that most of these positions were within one industry. Bank of America's economists say that it was the first instance since June last year when the number of vacancies exceeded the unemployed.
ADP's private sector payrolls showed an increase of 122,000 jobs in January, the highest growth since last year. ADP's numbers do not include the government sector, and are therefore stronger than national payroll figures since Donald Trump took over the White House.
The signals are still positive, and they don't show any signs of AI-related job loss.
The revised Quarterly Census of Employment and Wages for the fourth quarter of 2013 showed that employment was stronger than originally thought. JPMorgan estimates that employment growth could be revised upwards by at least 20,000 per month in the year to March. This is a significant change from recent downward revisions.
BREATHING ROOM
Tim Duy is the chief U.S. economic advisor at SGH Macro Advisors. He says that employment cyclical bottomed around summer or fall last year. He says that the labor market has "likely turned durable stronger."
Duy points out the JOLTS report from last year as an indicator. More job openings usually lead to increased hiring, which in turn should encourage people to leave their jobs, thereby creating more positions.
The labor market would be able to move again, and it would no longer be in its "unusual" and "uncomfortable", as the former Fed chair Jerome Powell described it in April.
Kevin Warsh, Powell's successor, may find that the job market is in a good place right now. The employment growth is 'picking up', which reduces the pressure on interest rates to be lowered, but not fast enough to raise inflation concerns.
The U.S. is experiencing an increase in inflation pressures, but not because of wages, but due to the energy crisis, tariffs, and other supply-related issues. The average?annual growth in earnings has been declining for the past three years. With inflation now approaching 4%, there is a negative real growth in earnings.
In spite of all this, it is still possible that the labor market "low hire, high fire" could turn into "no hiring, 100% fire". There are many reasons to be concerned, including the global energy crisis that is still in progress, the fear of an AI bubble, and the unknowable impact of new technology on the job market.
Challenger, Gray & Christmas, a global outplacement firm, released figures on Thursday that showed the United States had announced 97,000 job reductions in May, which is the highest number for a month since 2020.
There are reasons to be hopeful. Will Friday's report on employment be another?
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(source: Reuters)