DB Investing

Tag: GoldMarket

  • Gold & Yen Inch Up, Markets Brace for Trade, Crypto & Oil Sanctions Shifts

    Gold & Yen Inch Up, Markets Brace for Trade, Crypto & Oil Sanctions Shifts

    Tariff Risks, Japan Politics & Regulatory Headlines Shape Today’s Moves

    Gold & Safe-Haven Currencies

    • Gold prices stabilized at around $3,387/oz in Asian trade today, following a 1.1% dip, as easing trade tensions offset support from weaker U.S. dollar levels.
    • A U.S.–Japan auto tariff truce helped reduce safe-haven demand; gold remains range-bound, near its five-week highs amid cautious investor sentiment.
    • Pressure from calmer dollar and bond yields offers some support—but trade agreement narratives keep gold in a tight corridor.

    Japan’s Political & Exchange-Rate Ripple

    • The yen strengthened in Asian markets, reaching ¥147.9 per U.S. dollar, as investors eyed safe-haven demand following the ruling coalition’s loss in the upper house.
    • Prime Minister Ishiba confirmed he will stay in office to oversee tariff negotiations, even while political turbulence continues.
    • The Bank of Japan faces a policy dilemma: inflation risks from public spending vs. global trade uncertainty—a divided parliament complicates potential rate moves.

    EU Oil Sanctions & U.S. Stablecoin Regulation

    • The EU adopted its 18th sanctions package on Russia, implementing a floating price cap mechanism (~15% below market) on Russian crude, effective September 3.
    • These measures target Russian energy revenues while aiming to preserve global supply continuity.
    • In the U.S., President Trump signed the GENIUS Act on July 18, creating the first federal framework for payment stablecoins—requiring reserves and disclosures, binding issuers to 1:1 backing with liquid assets.
    • The crypto market responded favorably: stablecoins surged, crypto-linked stocks rose, and Bitcoin briefly topped $123K, with the market cap exceeding $4 trillion.

    Conclusion

    With developments across trade, currencies, energy sanctions, and crypto regulation intersecting this week, markets are balancing safe-haven flows, geopolitical policy shifts, and evolving digital finance frameworks. Investors are watching:

    • U.S.–EU trade talks, including the 15% tariff proposal.
    • Fed commentary and U.S. job market data.
    • ECB and BOJ decisions, especially with Japan’s political shake-up.
  • Gold Pressured, Dollar Rises

    Gold Pressured, Dollar Rises

    Fed’s Hawkish Tone and Middle East Tensions Drive Market Volatility 

    Gold Slips Despite Safe-Haven Demand 

    Gold prices fell during Asian trading on Thursday as the U.S. Federal Reserve’s hawkish stance added pressure on the precious metal. While geopolitical tensions — particularly the risk of U.S. involvement in the Israel-Iran conflict — supported safe-haven assets, the dollar’s strength limited gold’s upside. 

    Meanwhile, platinum surged to a 10-year high, driven by tightening supply and rising industrial demand, especially in Asia. 

    Federal Reserve Holds Rates Steady, Signals Inflation Concerns 

    On Wednesday, the Fed kept its benchmark interest rate unchanged at 4.25%–4.5%, maintaining a cautious tone and pausing any expected rate cuts for later in 2025. The central bank warned of persistent inflationary pressures, notably driven by newly proposed U.S. tariffs. 

    Lower interest rates are typically positive for gold, as they reduce the opportunity cost of holding non-yielding assets. However, the Fed’s decision to delay rate cuts weighed heavily on gold. 

    Trump Slams Fed Chair Powell Over Interest Rate Policy 

    Former President Donald Trump launched a fresh attack on Fed Chair Jerome Powell just hours after the rate decision. In a post on social media, Trump wrote: 

    “Powell is the worst. A real fool, costing America billions!” 

    Trump has repeatedly pressured Powell to lower interest rates and has intensified his criticism ahead of this week’s Fed meeting. He claims that Powell’s reluctance to cut rates could hurt the U.S. economy. 

    Fed’s Forecast: 2 Cuts in 2025, Fewer in 2026 

    Despite sticking with the current rate for now, the Fed reiterated its forecast for two interest rate cuts in 2025, while lowering expectations for 2026. This further disappointed investors who had hoped for a more dovish tone amid signs of economic slowdown. 

    Recent data reflects: 

    • Inflation has stalled its decline 
    • U.S. consumer confidence and spending have weakened 
    • Labor market momentum has faded 

    Dollar Strengthens Amid Middle East Escalation 

    The dollar climbed as most Asian currencies weakened Thursday, driven by: 

    • Ongoing uncertainty over potential U.S. military action against Iran 
    • Safe-haven demand during geopolitical crises 
    • Fed’s hawkish stance, reducing expectations of imminent rate cuts 

    Regional currencies deepened losses after Bloomberg reported that U.S. officials may launch a strike against Iran by the weekend — a move that could significantly escalate the conflict. 

    While Washington’s position remains ambiguous, Trump’s vague statements and Powell’s caution helped support short-term dollar strength. 

    Conclusion: Watch the Fed and the Middle East 

    With geopolitical tensions rising and the Fed reinforcing its inflation fight, markets are entering the second half of 2025 in a volatile state. 

    Key takeaways for traders: 

    • Expect continued pressure on gold unless the Fed shifts tone 
    • Monitor platinum and industrial metals for breakout opportunities 
    • Watch for updates on U.S.–Iran developments, which could reshape currency markets 

    Stay alert — and stay informed.