Gold Breaks Out Against the Odds, but Upside Remains Limited

Market Overview

Defying tariff headwinds, U.S. equities continued their rally with both the S&P 500 and Nasdaq Composite hitting fresh all-time highs. In the bond market, strong demand for 30-year Treasury auctions helped pare back earlier losses in long-term yields.

The U.S. dollar index surged to a two-week high following the release of upbeat unemployment data. In the cryptocurrency market, Bitcoin stole the spotlight with a single-day gain of over $5,000, surging past $116,000 to set a new all-time high.

In commodities, oil prices pulled back from a two-week high and posted their first decline this week, at one point falling over 2% intraday. Gold hovered near its lowest level in more than a week, struggling to gain traction. In contrast, industrial metals saw strong performance, with New York copper prices rebounding over 3% intraday.

Hot Topics Ahead

● OPEC+ May Pause Output Hikes Starting October

OPEC+ is reportedly discussing a halt to further production increases after the next scheduled hike in October. According to Goldman Sachs, both 2025 and 2026 are expected to see oil supply surpluses, which underpins their view that OPEC+ will soon cease boosting output. Analysts broadly agree that global supply could outpace demand later this year. Discussions remain preliminary, and no final decision has been made.

● Japans Auto Export Prices to the U.S. See Record Decline

To counter the impact of U.S. tariffs, Japanese automakers are adopting an aggressive pricing strategy—sacrificing margins to stay competitive. According to a Thursday report from the Bank of Japan on corporate goods prices, export prices of autos to North America, calculated in contract currencies, plummeted 19.4% year-over-year in May—the sharpest monthly drop since records began in 2016. This suggests manufacturers are absorbing tariff costs themselves rather than passing them on to consumers.

Key Data to Watch

🕑 14:00 GMT+8 – UK May 3-Month GDP MoM, UK May Manufacturing Output MoM