Gold starts recovering as the dollar declines
Gold prices rose in European trade on Monday away from recent five-week lows as the dollar fell against major rivals.
The Price
Gold prices rose 0.7% today to $3296 an ounce, with May 29 lows at $3247.
On Friday, gold lost 1.6%, the second loss in a row as US-China trade tensions receded.
The precious metal lost 2.8% last week, the second weekly loss in a row as haven demand tumbled.
US Dollar
The dollar index fell 0.3% on Monday, sharpening losses for the sixth straight session and hitting a three-year lows at 96.97 against a basket of major rivals.
A weaker dollar makes the greenback-denominated gold futures cheaper to holders of other currencies.
The decline comes as investors grow more optimistic about future US trade deals, which could prompt Fed rate cuts this year.
Washington and Beijing are on the cusp of a tariffs agreement, while Canada scrapped a digital tax that caused an angry response by Trump.
US Rates
Investors interpreted Fed Chair Jerome Powell’s last week Congressional testimony as leaning cautious, after saying that rate cuts are likely if inflation doesn’t rise this summer in response to tariffs.
According to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut in July stood at 20%.
The odds of such a cut in September stood at a much better 93%.
SPDR
Gold holdings at the SPDR Gold Trust rose 1.43 tons on Friday to a total of 954.82 tons.
Yen moves in positive zone as dollar weakens
The yen rallied in Asian trade on Monday against a basket of major rivals, moving against the dollar in a positive zone and approaching multi-week highs as the greenback continues to weaken.
The odds of a Japanese interest rate hike in July dropped following the Bank of Japan’s latest meeting, as traders now await more clues on inflation, wages, and unemployment in the world’s third largest economy.
The Price
The USD/JPY price fell 0.55% today to 143.80, with a session-high at 144.62.
The yen lost 0.2% on Friday against the greenback on profit-taking away from a two-week high at 143.75.
The yen rose 1% last week against the dollar, the second weekly profit in three weeks.
US Dollar
The US dollar index fell 0.2% on Monday on track for the sixth loss in a row, about to plumb three-year lows at 96.99 against a basket of major rivals.
The decline comes as investors grow more optimistic about future US trade deals, which could prompt Fed rate cuts this year.
Washington and Beijing are on the cusp of a tariffs agreement, while Canada scrapped a digital tax that caused an angry response by Trump.
Investors interpreted Fed Chair Jerome Powell’s last week Congressional testimony as leaning cautious, after saying that rate cuts are likely if inflation doesn’t rise this summer in response to tariffs.
Japanese Rates
The odds of a Bank of Japan’s 0.25% interest rate hike in July is still below 40%.
Now investors await more clues from Japan this week to form a more accurate prediction.
S&P 500 and NASDAQ close at fresh record highs
US stock indices rose on Friday as investors continue to shrug off recent trade developments and inflationary data.
US Trade Secretary Howard Lutnick confirmed in statements to Bloomberg that a general framework for a trade deal with China has been reached, with the US expecting deals with 10 major trade partners soon.
US President Donald Trump said he’s terminating trade talks with Canada after it imposed a digital services tax on US tech corporations.
Trump described Canada as a country difficult to deal with on trade, and considered the new Canadian tax and attack on the US.
As for data, US personal consumption expenditure was up 2.7% y/y in May, above estimates of 2.6%.
At the close, Dow Jones rose 1%, or 432 points to 43819 points, with a weekly profit of 3.8%.
S&P 500 rose 0.5%, or 32 points to 6173 points, with a weekly profit of 3.4%.
NASDAQ added 0.5%, or 105 points to 20,273 points, with a weekly profit of 4.25%.
Ethereum dips but wraps up a flat week
Ethereum lost ground on Friday amid a mixed risk appetite as traders assess US trade negotiations with major countries.
US Trade Secretary Howard Lutnick confirmed in statements to Bloomberg that a general framework for a trade deal with China has been reached, with the US expecting deals with 10 major trade partners soon.
US President Donald Trump said he’s terminating trade talks with Canada after it imposed a digital services tax on US tech corporations.
Trump described Canada as a country difficult to deal with on trade, and considered the new Canadian tax and attack on the US.
As for data, US personal consumption expenditure was up 2.7% y/y in May, above estimates of 2.6%.
Ethereum
Ethereum fell 1% as of 20:56 GMT to $2414 on CoinMarketCap.