Germany Faces Record-Low Birth Rate, Raising Alarms Over Aging Population and Labor Shortage

Direct Impact on German Economic Growth

Spillover Effects Across Europe

Possible Backfire on the US Economy

Source: Reuters

Gold prices rose on Friday as a weaker U.S. dollar and ongoing geopolitical and economic uncertainty boosted demand for the safe-haven metal, while platinum prices eased after reaching their highest level since 2014.

Spot goldrose 0.5% to $3,353.80 per ounce, as of 0947 a.m. EDT (13:47 GMT), after falling 1.1% in the previous session.

U.S. gold futureswere also up 0.5% to $3,360.50.

"In the precious metals space, there are gains across the board, courtesy of a weaker dollar," said Marex analyst Edward Meir.

"We do not see much of a bearish case in gold over the medium-term given all that is going on, including out-of-control U.S. spending, lingering trade tensions, inflation uncertainty and the constant Fed bashing thrown in lately for good measure."

The dollarwas down 0.5% for the day. A weaker dollar tends to make gold cheaper for buyers holding other currencies.

Earlier this week, Trump said he was not planning to fire Federal Reserve Chair Jerome Powell. Still, he kept the door open to the possibility and renewed his criticism of the central bank chief for not lowering interest rates.

Market participants are anticipating two U.S. rate cuts by the end of this year, totalling 50 basis points. (FEDWATCH)

Gold thrives during economic uncertainty, and lower interest rates boost investor demand as it is a non-yielding asset.

On the tariff front, Indonesia is still negotiating the details of its recently reached trade deal with the United States. Meanwhile, U.S. Treasury Secretary Janet Yellen told the Japanese Prime Minister that their countries can get a "good agreement".

Spot platinumfell 0.7% to $1,448.03 per ounce, after hitting its highest since August 2014 earlier today.

Palladiumclimbed 0.7% to $1,289.50, its highest since June 2023, and silveradded 0.5% to $38.31.

"In precious metals, the carnival has moved on from safe-haven gold to silver, platinum and palladium as pro-growth, industrial alternatives," said Adrian Ash, head of research at online marketplace BullionVault.

Source: TradingView

Incoming Austrian central bank Governor Martin Kocher said Donald Trump’s attack on the Federal Reserve’s independence puts price stability at risk.

The former economy minister — who’s set to replace Robert Holzmann on the European Central Bank’s Governing Council in September — said Trump’s administration is disregarding Fed independence based on dubious legal reasoning and with the clearly stated desire to reduce US debt costs.

“A government can find more short-term financial maneuvering room via lower interest rates, more money supply or the direct financing of expenses if it steers both fiscal and monetary policy,” Kocher said in a post on his website. “But all this fans inflation, and can in the worst case lead to galloping inflation or hyperinflation — and there are clear examples in economic history.”

Trump is on a relentless campaign to pressure the Fed into cutting rates, which he considers far too high. This has renewed the question of how much a US president can and should influence an institution designed to be independent.

Kocher’s comments echo remarks by Bundesbank President Joachim Nagel, who said earlier Friday that interference in Fed independence would be felt outside of the US.

Source: Bloomberg Europe

Copper climbed to a more than one-week high on Friday, driven by Chinese buyers, hopes for a US-China trade deal, and higher risk appetite among other investors.

Three-month copper on the London Metal Exchange CMCU3 gained 0.8% to US$9,745 per metric ton by 1400 GMT, its strongest since July 9.

LME copper has eased from its three-month peak of US$10,200.50, hit on July 2, and Chinese participants are buying on dips, Marex senior base metals strategist Alastair Munro said.

"Add to that chatter on wires around a potential U.S.-Sino trade agreement in months ahead...The surprise remains on the topside."

China's commerce minister said on Friday the country, the world's biggest metals consumer, wants to bring its trade ties with the US back to a stable footing.

Hopes for more metals-intensive economic support were buoyed after an official with the industry ministry said China would issue action plans to stabilise growth in the machinery, autos, and electrical equipment sectors.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 rose 0.7% to 78,410 yuan (US$10,922.74) a ton.

"LME copper stocks have been rising, mainly at its Asia warehouses as some traders may be betting on more buying by China with recent price drops," a Shanghai-based metals analyst at a futures company said.

Also supporting the market was higher risk appetite among investors in general as stock markets moved higher, and a weaker dollar.

A softer dollar makes commodities priced in the greenback less expensive for buyers using other currencies.

US Comex copper futures HGc3 climbed 1.3% to US$5.58 a lb, bringing the premium of Comex over LME copper to US$2,554 a ton.

Nickel CMNI3 was the weakest performing LME metal on rising inventories and weak demand for the metal mainly used to make stainless steel and electric vehicle batteries. It was up 0.5% to US$15,170 a ton after earlier sinking into the red.

"We do not expect a near-term demand inflection with stainless run rates falling and low probability of a renaissance of the transformational battery bull case for nickel," UBS analyst Daniel Major said in a note.

Among other metals, LME aluminium CMAL3 rose 1.4% to US$2,616 a ton, zinc CMZN3 jumped 3% to US$2,816, lead CNPB3 gained 1.3% to US$1,998.50 and tin CMSN3 rose 0.7% to US$33,230.

Source: Theedgemarkets

Barclays is warning that markets face “negative summer seasonality,” as August and September typically bring elevated volatility, with policy uncertainty and rising rates adding to investor unease.

“Policy uncertainty keeps markets on edge,” Barclays wrote in a note titled Summer anxiety, cautioning that “hedging seems wise” given that stocks are near their highs and the macro backdrop remains “noisy.”

The firm highlighted slow progress in ongoing tariff negotiations, noting that while a deal with Indonesia was reportedly reached, “uncertainty persists for the EU ahead of the August 1st deadline.”

The potential for a 30% tariff on EU goods remains a concern. Although the market reaction has been muted, Barclays said this “arguably reflects a degree of investor complacency,” with the VIX near year-to-date lows.

“A full implementation of 30% EU tariffs would certainly lead to a deeper economic slowdown, and badly hurt the prevailing TACO trade,” analysts warned.

Apart from trade, yields have risen due to stronger U.S. goods CPI and fiscal worries.

Barclays cited “concerns around ballooning fiscal deficit and Fed chair Powell’s position contributing to investor unease.” Although President Trump later denied firing Powell, the headlines unsettled investors.

Despite these risks, Barclays said “growth and earnings fundamentals continue to backstop the equity market.” U.S. economic surprises have turned positive, and Q2 earnings have shown “corporate resilience.”

“We continue to see a path for European equities to break out and reach new highs by year-end,” Barclays wrote, “but it might not be smooth sailing to get there.”

Source: Yahoo Finance

Consumers' worst fears about tariff-induced inflation have receded, though they are still wary of price increases to come, according to a University of Michigan survey Friday.

The university's closely watched Survey of Consumers for July showed overall sentiment increased slightly, rising 1.8% from June to 61.8, exactly in line with the Dow Jones consensus estimate and at its highest level since February. Questions on current conditions and future expectations produced monthly gains as well.

On inflation, the outlook at both the one- and five-year horizons both tumbled, falling to their lowest levels since February, before President Donald Trump made his "liberation day" tariff announcement on April 2.

The one-year forecast plunged to 4.4%, down from 5% in June and well off the 6.6% level in May, which was the highest reading since late 1981. For the five-year outlook, the expectation slid to 3.6%, down 0.4 percentage point from June.

"Both readings are the lowest since February 2025 but remain above December 2024, indicating that consumers still perceive substantial risk that inflation will increase in the future," survey director Joanne Hsu said in a statement.

Indeed, the respective outlooks in December were for 2.8% and 3%, largely in line with readings throughout 2024, before Trump took office in January.

Worries peaked over inflation as Trump levied 10% across-the-board tariffs as well as so-called reciprocal duties that he has backtracked on pending negotiations. However, in recent days he has announced tariffs on individual products such as copper, raising the specter of future price increases.

The readings are below their long-term averages, with the headline sentiment index down 6.9% from a year ago and 16% from December. The expectations reading fell 14.8% from July 2024, though the current conditions index was 6.5% higher.

Source: CNBC