News

Friday began on a disappointing note for precious metals markets in Asia. Gold, which has already been struggling this week, moved lower once again. Spot gold fell 0.8% to $4,440.84 per ounce, while futures declined by the same margin to $4,467. And this is happening even as the Middle East remains engulfed in conflict.

At first glance, war, missile strikes, military operations, and stalled negotiations should provide the perfect environment for gold to rally. Investors are traditionally expected to flock to the yellow metal as a safe haven. That is how it has always worked. That is what textbooks teach. That is what market logic suggests. But not today—and not this week.

The paradox has a simple explanation. The conflict between the United States and Iran, which has been ongoing for several months, has ceased to be a source of uncertainty. Instead, it has become a source of inflation. And inflation means higher interest rates. Higher interest rates, in turn, are a major headwind for gold.

Gold is down approximately 2.2% for the week, marking its worst performance since early May. The reason is not the absence of geopolitical risks, but rather their abundance. The market is no longer afraid of war itself. It is afraid of what war does to oil prices and, through oil, to inflation and interest rates.

Let’s examine how a conflict in the Middle East has become a bearish factor for gold—and what may lie ahead for the yellow metal following the release of key U.S. employment data.

Developments in the Middle East have been rapid and, for those hoping for peace, discouraging. Hopes for a U.S.–Iran agreement, which still seemed realistic earlier in the week, had all but vanished by Friday.

...

Asia wakes up on Thursday, and the first thing traders see on their screens is red once again. Regional currencies have fallen for a fourth consecutive day. Bloomberg’s Asian currency index—a barometer of the financial health of hundreds of millions of people across the region—continues its relentless slide. The biggest losers are the South Korean won and the Indonesian rupiah, but few others are faring much better.

Behind these numbers lies a simple and uncomfortable story. The dollar is strong. Oil is expensive. Capital is flowing out of Asia and into the United States. Meanwhile, local central banks are trying to preserve what they can. Interventions, warnings, interest-rate hikes—every tool is being deployed. So far, however, the results have been limited.

Asian countries have found themselves in a perfect storm. Two powerful forces are putting simultaneous pressure on their currencies. The first is the policy stance of the U.S. Federal Reserve. The American economy has remained stronger than expected, inflation remains stubborn, and the Fed is not only delaying rate cuts but is even considering further hikes. The second factor is the Middle East. Rising tensions between the United States and Iran are pushing oil prices higher. For Asia, which imports most of the oil it consumes, expensive oil delivers a triple blow: higher inflation, worsening trade balances, and weaker currencies.

Regional authorities are fighting back. Some are intervening directly, selling dollars from their reserves and buying local currencies. Others are raising interest rates to make their currencies more attractive to investors. Some are imposing administrative measures to limit capital outflows. Yet the U.S. dollar remains a formidable opponent. It is difficult to fight when domestic economies are slowing and inflation is rising.

South Korea, Asia’s fourth-largest economy and...

Thursday began with a hangover across Asian equity markets. After several days of record-breaking gains in technology and semiconductor stocks, reality set in. Indexes drifted lower—not in a panic, not in a crash, but steadily enough to leave little doubt: the rally is taking a pause.

Several factors contributed to the shift. The main one is simple exhaustion. After the Nikkei reached a fresh all-time high and South Korea’s KOSPI approached its own peaks, investors decided it was time to take profits—especially against a backdrop of increasingly unsettling news.

There were also more concrete triggers. Comments from the Governor of the Bank of Japan regarding possible interest-rate hikes. Mixed results from Broadcom that weighed on the entire semiconductor sector. Ongoing uncertainty surrounding U.S.-Iran negotiations. Together, these factors created a cocktail that Asian markets found hard to stomach.

S&P 500 futures, which often set the tone for global trading, fell 0.4% in after-hours trading. American investors are taking profits as well. The example is contagious.

The Japanese market, which was celebrating only yesterday, found itself deep in the red today. The Nikkei 225 lost 1.9%, while TOPIX, the broader Tokyo Stock Exchange index, fell 1.4%. These are significant moves—the kind that prompt analysts to revisit their forecasts.

What happened?

First, profit-taking. The Nikkei hit record highs this week, and many investors who bought stocks a month or two ago saw their portfolios rise by 20–30%. The temptation to lock in real gains rather than admire paper profits proved stronger than faith in further upside.

Second—and perhaps more importantly—there were comments from Bank of Japan Governor Kazuo Ueda. Speaking at a seminar on Wednesday, he said something markets were not expecting, at least not yet.

Ueda warned that inflation in Japan could...

Thursday began with a reality check for the oil market. After three straight days of gains—delighting bulls, frustrating bears, and forcing traders to revise their models—the market finally saw a correction. A modest one. A measured one. Almost a polite one. But a correction nonetheless.

Brent crude futures, the European benchmark, were down 0.7% on Thursday morning, trading at $97.16 per barrel. Its American counterpart, WTI, slipped slightly more, losing 0.8% to $95.30 per barrel. Prices that would have seemed extraordinary just a week ago now look like business as usual.

Still, this decline is hardly dramatic. It is simply profit-taking. Investors who entered the market last week when prices were 5–7% lower have decided it is time to take some money off the table. They sell, prices fall. Nothing personal—just business.

Yet beneath this routine profit-taking lies something more interesting: risk assessment.

The oil market today resembles a tightrope walker balancing above a canyon. On one side is geopolitical turmoil in the Middle East; on the other are the hard numbers coming from U.S. crude inventories. Both factors are pushing prices higher. But there are forces pulling in the opposite direction as well. More on those shortly.

Let's begin with the biggest source of oil market volatility in recent weeks: the Middle East—a region that gave the world agriculture, writing, and seemingly an endless supply of conflict.

Events unfolded at cinematic speed this week.

First came Iranian missile strikes against Kuwait and Bahrain. These small but wealthy Gulf monarchies, accustomed to life under the American security umbrella, suddenly found themselves on the front line. The missiles came from Iran—the United States' primary regional adversary, Hezbollah's main backer, and a perennial source of instability.

Then came...

There is an old, almost cliché truth in finance: a strong U.S. economy means a strong dollar. It seems logical enough. GDP rises, and investors bring money into America. Strong employment data strengthens the dollar. Geopolitical tensions drive investors into the dollar as a safe haven. This relationship worked for decades. It was an axiom that required no proof.

But, as it turns out, even axioms can become outdated.

HSBC Asset Management, which oversees $863 billion in assets, has made a rather provocative claim. According to the firm's strategists, the dollar is headed for weakness. Not merely a temporary correction or a short-term pullback, but a structural downward trend. Their key argument sounds almost paradoxical: the dollar no longer responds to good news the way it once did.

Joe Little, Global Chief Strategist at HSBC Asset Management, articulated the idea with remarkable precision. Historically, the combination of strong domestic growth and geopolitical tension created a powerful and sustained uptrend for the U.S. currency. Investors from around the world flocked to the dollar because America was both a haven of stability and an engine of growth. Today, that dynamic appears to be fading. The dollar still rises at times, but reluctantly, sluggishly, and with frequent reversals. Little sees this as a symptom of a deeper problem.

Something has changed. The question is: what exactly?

Let's look at the numbers. The Bloomberg Dollar Spot Index gained just 0.6% over the past month. In currency markets, six-tenths of a percent is barely a move. It's a tremor rather than a trend.

And this happened despite the U.S. economy continuing to surprise on the upside. Job openings exceeded expectations. Consumer spending remains resilient. Industrial production is expanding....

Currency & Commodity Analysis:

US Dollar Index

The US dollar index rose further to 99.50 on Wednesday, reaching its highest level in nearly two months, after an ADP report showed that the private sector added 122,000 jobs in May, exceeding expectations and reaching a new high since January 2025. The data shows a continued strengthening labor market, further solidifying market expectations that the Fed may raise interest rates later this year. Earlier this week, Jolts data showed that job openings in April rose to their highest level since November 2024, further highlighting the resilience of labor demand. The dollar has been supported by escalating tensions in the Middle East, and oil prices rose for the third consecutive trading day, exacerbating concerns about inflationary pressures. The market currently estimates an 85% probability of the Federal Reserve raising interest rates by 25 basis points before the end of the year, up from 60% a week ago.

The US dollar index is trending slightly higher on the daily chart, currently trading above 99.30 and holding above all moving averages. Short-term resistance is seen at the previous high of 99.55, with medium-term resistance at 100.00 (a psychological level). Support lies at the 20-day and 50-day moving averages and the previous low of 97.63. The MACD remains above the zero line, with the DIFF above the DEA, indicating a slight continuation of bullish momentum. The RSI is between 55 and 60, above the 50 level, suggesting bulls are in control but not yet overbought. The moving average system is bullish, with the medium-term center of gravity steadily rising. Short-term consolidation is seen due to resistance at the previous high. The market is trending slightly higher, supported by moving averages. Key levels to watch are the 99.55-100.00 (psychological resistance) level and the 99.00-98.58...

Wednesday was not a particularly good day for the Canadian currency. Then again, neither were the previous several weeks. The Canadian dollar, affectionately known as the “loonie” after the solitary loon depicted on the one-dollar coin, remained dangerously close to its multi-month lows against its American counterpart.

It did not plunge. It did not collapse. It did not crash. It simply stood still. And that stillness — that stubborn pause at a level that pleases no one — speaks more loudly about the challenges facing the currency than any dramatic selloff could.

During trading, the Canadian dollar was virtually unchanged at 1.3838 per U.S. dollar. Converted into U.S. cents, that works out to roughly 72¼ cents for one Canadian dollar — a level that would have seemed insultingly low to many Canadians just a few years ago. Today, it has become an uncomfortable reality to which people are gradually adapting.

Throughout the session, the currency traded within a narrow range between 1.3816 and 1.3854. By foreign-exchange standards, that range is almost laughably small. This is not volatility; it is indecision. Traders do not know which direction to run, so they remain frozen in place, clinging tightly to their positions.

The most troubling moment came last Thursday, when the Canadian dollar slipped to a six-week low of 1.3869. Since then, conditions have not improved, but at least they have not deteriorated dramatically. Whether this calm is the quiet before a storm or merely the beginning of a long and tedious period of stagnation remains to be seen.

Trying to explain the Canadian dollar’s weakness with a single factor would be impossible. As always, it is a cocktail of problems — a bitter blend that financial markets swallow reluctantly because they have...

There was something almost tragicomic about it. Throughout 2024, analysts, economists, and geopolitical observers kept wondering: surely this is the moment when the euro finally makes its move.

The United States pursued such an unpredictable economic policy that even its own allies were left bewildered. Trade wars, abrupt policy reversals, public disputes within the administration—a perfect storm that should have pushed the world to look for an alternative to the dollar.

And that alternative already had a name: the euro. The world’s second-largest reserve currency. The natural contender for the throne.

But the world, as it often does, refused to behave as experts expected. It did not rush into the arms of the euro. In fact, it did not rush toward any single currency at all. Instead, investors, central banks, and major funds cast their votes for something else entirely: gold—and the currencies of small, often overlooked countries.

The euro remained roughly where it had always been, holding a share of about 20% of the global market.

These are not rumors or speculation. The figures were published on Tuesday by the European Central Bank (ECB) in its latest report. And, frankly, the numbers make for rather disappointing reading from a European policymaker’s perspective.

Because 20% is not bad. But it is not progress either. It is stagnation. And perhaps most frustrating of all, the euro’s current share remains below the level it enjoyed twenty years ago, in the early years of its existence.

Let’s dispense with euphemisms. Twenty percent is not a commanding second place. It is a frozen picture.

The euro is neither growing nor shrinking. It is holding the line.

At first glance, given reports that the dollar is also losing ground, this could be framed as...

Currency & Commodity Analysis:

US Dollar Index

The US dollar index remained above 99 on Tuesday, after rising in the previous session, as stalled US-Iran peace talks increased safe-haven demand, while inflation risks and interest rate expectations came into focus. On Monday, Iranian media reported that Tehran had suspended communication with Washington in response to Israeli attacks in Lebanon. Meanwhile, President Trump stated that discussions are ongoing and hinted that a memorandum of understanding with Iran on reopening the Strait of Hormuz could be reached next week. However, rising energy-driven inflation has led markets to anticipate a possible Federal Reserve rate hike before the end of the year. Investors are now awaiting Tuesday's Jolts job openings report, followed by Friday's closely watched US monthly employment data, for further insight into the Fed's policy outlook.

The US dollar index will be under pressure. The dollar index faces greater downside risk, with 98.79 (the Bollinger Band middle line) and 98.58 (the 200-day moving average) serving as key short-term support levels. A break below these levels could lead to a move towards 97.62 for support. From a cross-market technical perspective, the dollar index and US Treasury yields are currently showing some divergence. On the 240-minute chart of the dollar index, the price has fallen from the mid-May high of 99.55, currently trading at 99.20. The MACD histogram is -0.0169, with both the DIFF and DEA lines below the zero line and in a bearish divergence, indicating the downtrend has not yet reversed. Support levels to watch are the psychological level of 99.00 and the previous pullback low of 98.75; a break below these levels would target the next support zone at the recent low of 97.62.

Consider shorting the US Dollar Index at 99.30 today, with a stop-loss at...

There are certain types of news in financial markets that hit like an electric shock. When Elliott Investment Management, one of the world’s most prominent and aggressive activist hedge funds, reveals a major stake in a company, it is never accidental. There is always a strategy, a plan, and a willingness to fight behind the move. On Tuesday, Elliott disclosed a stake worth more than A$1 billion in Northern Star Resources, the Australian gold miner. The company’s shares immediately surged more than 13%, reaching their highest level since mid-May.

This is a classic market reaction to the arrival of an activist investor: everyone knows Elliott will not sit quietly on the sidelines. It will push for change. And those changes typically lead to higher shareholder value.

Elliott Investment Management is not a passive fund that buys shares and waits quietly for dividends. It is an activist investor with a long history of successful campaigns against companies it believes are undervalued due to poor management. When Elliott takes a position, it usually means significant changes are coming—either voluntarily or under pressure.

In Northern Star’s case, Elliott wasted no time getting to the point. The fund stated that the gold miner should undertake a strategic review that could include a sale of the company. This is not merely a suggestion—it is effectively an ultimatum. Elliott believes Northern Star is undervalued and argues that the problem lies not in market conditions but in management execution.

The fund accused the company of “operational missteps” and “insufficient disclosure” compared with its peers. Put simply, other gold miners are operating more effectively and communicating more transparently, while Northern Star has, in Elliott’s view, obscured problems behind limited reporting.

The market clearly agreed. Shares jumped...