Gold Holds Ground As Investors Eye US Payrolls Report

Economic

Commodity

Summary:

Non-farm payroll data due on Friday; Trump says Fed's Powell must lower interest rate; Silver hits highest level in more than 12 years.

Gold prices held steady on Thursday as investors awaited U.S. non-farm payrolls data due on Friday to assess the Federal Reserve's interest rate path, while global trade tensions continued to simmer.

Spot goldwas steady at $3,373.69 an ounce, as of 0843 GMT. U.S. gold futureswere down 0.1% to $3,397.20.

"I would say that the path of least resistance remains to the upside, despite today's sort of flat mode for gold trading. But I think this is more due to traders being in wait-and-see mode ahead of non-farm payrolls," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades.

Wednesday's ADP National Employment Report revealed U.S. private payrolls increased far less than expected in May. The more comprehensive non-farm payrolls report on Friday is expected to show that non-farm payrolls increased by 130,000 jobs in May after advancing by 177,000 in April, according to a Reuters survey of economists.

U.S. President Donald Trump on Wednesday called for Fed Chair Jerome Powell to lower interest rates.

"I think that a weakening in the US labor market will increase bets on a dovish Fed, so on the Fed cutting interest rates, (which) would be positive for gold," Evangelista added.

Gold, a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment.

Trump described China's Xi Jinping as "tough" and "extremely hard to make a deal with" in a social media post, dampening hopes for a swift end to trade tensions. Meanwhile, his doubling of tariffs on steel and aluminium imports took effect on Wednesday.

"We stick to our price targets of USD 3,350 and USD 3,500 in 3 and 12 months time, reflecting first and foremost continued central bank buying as well as sound demand from safe-haven seekers," said Carsten Menke, analyst at Julius Baer.

Elsewhere, spot silverfell 0.6% to $34.74 an ounce, but hit its highest level since October 2012. Platinumrose 3.6% to $1,123.15, its highest level since April 2023, and palladiumwas up 1.7% at $1,017.37.

Source: TradingView

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Gerik

Economic

Inflation Metrics Distorted by Data Entry Mistake

In a development that further strains public confidence in the UK's statistical reporting, the ONS revealed that April’s official consumer inflation rate was overstated by 0.1 percentage points due to incorrect Vehicle Excise Duty data. This technical error originated from external government data which exaggerated the number of cars subjected to first-year tax rates, thereby artificially inflating price indices.

While the official Consumer Price Index (CPI) for April was reported at 3.5%—a notable rise from March’s 2.6%—the actual figure should have been 3.4%, according to today’s correction. This discrepancy also extended to the CPIH, which includes housing costs, and the Retail Price Index (RPI), which affects payouts on index-linked government bonds (gilts).

ONS Under Fire Amid Broader Data Scrutiny

This incident compounds existing concerns about the reliability of the ONS’s data. The agency is already facing criticism for erratic labor market reports, prompting the UK government in April to launch an independent review of the statistical agency’s operations and data integrity. This latest miscalculation—albeit small in absolute terms—has symbolic weight, as it highlights procedural lapses in quality control over externally sourced datasets.

The ONS has stated that it will not revise the previously published inflation figures despite the acknowledged error. However, it confirmed that data corrections have been applied starting from the May series, thereby ensuring future accuracy. A comprehensive review of quality assurance protocols is now underway.

Financial Market and Policy Implications

Though a 10 basis point difference may seem modest, it carries meaningful implications in financial markets and monetary policy. The Retail Price Index (RPI), which was also overstated, influences interest payments on index-linked gilts. Misreported inflation could affect investor confidence in UK government securities, especially in an environment of tight fiscal conditions and persistent scrutiny of inflation dynamics.

Additionally, the Bank of England may need to consider this error when interpreting recent inflation trends. Given that inflation metrics guide interest rate decisions, even small inaccuracies risk altering the perception of price stability or overheating.

The inflation misstatement, while quantitatively minor, adds to the ONS’s reputational challenges at a critical time. With inflation still a central issue for British households and policymakers alike, confidence in the precision and transparency of official economic data is essential. The correction emphasizes the need for robust verification systems—particularly when third-party data is involved—and highlights the broader risks of governance lapses in public economic reporting.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Commodity

China–U.S. Trade War

Strategic Resource Diplomacy Meets Trade Tensions

As the fifth round of U.S.-Japan tariff negotiations commences, Japan plans to put rare earth cooperation at the forefront of its agenda. According to the Nikkei, Tokyo aims to propose a strategic partnership with Washington to secure rare earth supplies—critical materials for electronics, defense, and green technologies—amid rising concerns over Chinese export controls. This proposal reflects growing anxiety in Tokyo and Washington about supply chain vulnerability in the face of Beijing’s geopolitical leverage over critical minerals.

Rare earths, though not scarce, are predominantly mined and processed in China, which gives the country a dominant role in the global market. By aligning with the U.S., Japan hopes to diversify sourcing and reduce dependency, particularly after China’s recent export curbs on gallium and germanium rattled supply chains across high-tech sectors.

Tariff Flexibility from Washington?

At the same time, Japan is pushing for relief from steep reciprocal tariffs imposed under Trump’s ongoing trade reset. While a universal 10% tariff remains in place on Japanese exports to the U.S., an additional 14%—part of a broader 24% package—has been suspended until July to allow time for negotiation. Reports from Jiji Press suggest the U.S. has shown signs of flexibility in reducing or lifting the suspended portion, providing some hope for Japanese exporters.

Chief negotiator Ryosei Akazawa is currently in Washington to lead the Japanese delegation. His talks with U.S. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick are critical, especially as Tokyo continues to protest the 25% levy on Japanese-made vehicles—an industry that remains the cornerstone of Japan’s economy.

Auto Industry at the Center of Japan’s Concerns

While rare earths signal long-term strategic alignment, the more immediate concern for Japan is the preservation of its automotive exports. The 25% tariff on Japanese vehicles, though temporarily paused, poses a significant threat to one of Japan’s largest economic sectors. Japanese officials argue that such tariffs are not only economically damaging but also run counter to the spirit of alliance and shared values between the two nations.

Japan’s auto sector has already faced headwinds from global EV competition, currency volatility, and supply chain restructuring. The additional tariffs risk further complicating their U.S. market access, just as automakers are ramping up investments in battery-electric models for American consumers.

Outlook and Implications

The convergence of resource security and tariff negotiations signals a new phase in U.S.-Japan economic diplomacy, where shared geopolitical interests—particularly regarding China—may help break the impasse. If Japan can secure concessions on tariffs in exchange for rare earth supply cooperation, both nations stand to benefit strategically: the U.S. would reduce its dependence on Chinese critical minerals, while Japan would secure market access for its vehicles and manufactured goods.

However, with the Trump administration pushing for aggressive trade realignment and tighter control over industrial inputs, any outcome will hinge on a delicate balancing act between domestic economic priorities and international strategic alliances.

Source: Reuters

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Unpredictable Trade Shocks Disrupt Policy Tools

In an interview with the Financial Times, Gita Gopinath emphasized that emerging markets now face greater difficulty than during the pandemic because of the “differential effects” caused by trade wars. While COVID-19 was a global demand shock that could be countered with monetary easing and stimulus, trade tensions are creating fragmented, asymmetric shocks across developing economies. The fallout from tariffs is not only unpredictable but also prolonged, affecting inflation, investment sentiment, exchange rate stability, and export competitiveness differently across regions.

Emerging market central banks, which often rely on flexible monetary tools to counter external volatility, are now confronted with constraints. Aggressive easing could risk capital outflows, currency depreciation, and inflationary pressure—particularly if their economies are heavily reliant on exports or foreign direct investment from the U.S. or China.

Greater Complexity, Less Room for Maneuver

Gopinath’s remarks highlight how today’s geopolitical trade landscape complicates macroeconomic management for emerging economies. During COVID-19, the synchronized global downturn gave central banks across both advanced and developing economies a shared rationale to slash interest rates and inject liquidity. In contrast, the tariff-driven trade war is asynchronous and more selective, requiring nuanced responses to sector-specific and bilateral disruptions.

Many emerging markets are now facing inflation that stems not from overheating domestic demand, but from supply-side disruptions and higher import costs—particularly for intermediate goods, food, and energy. This limits the effectiveness of traditional monetary easing, while also making inflation targeting more fragile in the face of volatile global prices.

Implications for Global Financial Stability

The IMF's warning underlines broader systemic concerns. As Gopinath notes, central banks in the developing world must now balance between stabilizing their economies and defending their currencies, all while dealing with capital flow volatility triggered by policy swings in major economies. For countries with high external debt or commodity-dependence, the risks are amplified.

If left unmitigated, these pressures could deepen inequality across the global South, stall investment, and lead to divergent recoveries. The IMF may need to ramp up tailored financial support or policy coordination to help stabilize vulnerable economies caught in the crossfire of the U.S.-China tariff escalation.

The IMF’s assessment serves as a stark reminder that while pandemics shock economies through health and supply channels, trade wars erode the very foundation of international economic integration. For central banks in emerging markets, the stakes are now higher, the policy space narrower, and the consequences more unequal. As the trade war unfolds, the resilience of developing economies will depend not just on monetary tools, but also on targeted fiscal support, structural reforms, and global cooperation.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Expanded Travel Ban Follows Boulder Attack and Border Concerns

In a move echoing his 2017 "Muslim ban," President Trump announced a new travel ban affecting nationals from 12 countries, including Afghanistan, Iran, Libya, Somalia, and Yemen. The proclamation came shortly after a terror attack in Boulder, Colorado, which Trump used to reinforce concerns about inadequate visa screening and overstays. Although the suspect in the attack—a man from Egypt who overstayed a visa—was not from one of the banned countries, Trump cited the incident as justification for broader entry restrictions.

The administration emphasized the need to protect the U.S. from what it called “unvetted foreign nationals,” with Trump declaring in a video, “We don’t want them.” While those with existing visas, permanent residents, and individuals traveling for events like the Olympics are exempt, the proclamation signals a return to Trump's earlier restrictive immigration policies.

Harvard University Targeted in Separate Proclamation

In a surprising extension of the travel policy, Trump also issued a separate order targeting foreign exchange students at Harvard University. The administration accused the university of lax enforcement of disciplinary conduct, especially among foreign students, and of withholding critical records from federal authorities. The proclamation suspends new visas for Harvard’s exchange programs, escalating Trump’s campaign against perceived liberal academic institutions.

Trump specifically cited “antisemitic conduct” and “failure to discipline violations” as justification, although the university has not publicly responded to the accusations.

Legal and Political Implications

The expanded travel ban is expected to face immediate legal challenges, just as Trump’s original executive order did in 2017. That policy—widely referred to as a “Muslim ban”—sparked global outrage and was ultimately upheld by the U.S. Supreme Court in 2018 after multiple revisions. Trump’s latest version aims to preempt legal criticism by including non-Muslim-majority countries like Haiti and Venezuela and by outlining specific exemptions.

Legal experts suggest the courts will again be called to determine whether the ban violates constitutional protections or immigration statutes. Nonetheless, Trump appears undeterred, framing his actions as part of a broader national security campaign and asserting broad executive authority over border control.

Broader Immigration Agenda and Election Pledge Fulfillment

This proclamation marks another cornerstone of Trump’s revived immigration strategy in his second term. Since returning to office, he has declared a national emergency at the southern border, deployed military resources, increased deportations, and attempted to challenge birthright citizenship—moves that have drawn both legal pushback and praise from conservative voters.

Trump's use of executive orders to reinstate his signature travel ban fulfills a major 2024 campaign promise. He had pledged not only to reinstate but also to expand the original ban, particularly warning about refugees from conflict zones such as Gaza. His administration has also employed trade tools—namely tariffs—to pressure Mexico and Canada to enforce stricter immigration controls on their own borders.

Trump’s reinstatement and expansion of the travel ban underscore a strategic pivot back to the combative immigration stance that defined his first presidency. With global tensions rising and migration again a politically charged issue, this latest move is likely to energize his base while provoking fierce opposition from immigrant advocacy groups, legal watchdogs, and civil liberties organizations. Whether the new ban will withstand judicial scrutiny remains to be seen, but its political impact is already being felt.

Source: Bloomberg

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Blue River

Forex

Technical Analysis

Economic

Despite weak US macroeconomic data, the EURUSD pair still struggles to break above the 1.1425 resistance level, indicating persistent seller pressure. EURUSD technical analysis points to waning upward momentum and an increased risk of a correction towards 1.1270.

The EURUSD pair is correcting despite persistent pressure on the US dollar from weak macroeconomic data. Find out more in our analysis for 5 June 2025.

EURUSD forecast: key trading points

●The ADP report showed the US private sector added only 37 thousand jobs in May

●The US ISM services PMI fell to 49.9 points in May

●The drop in ISM reflects a decline in business activity

●EURUSD forecast for 5 June 2025: 1.1270

Fundamental analysis

The EURUSD rate is showing a slight decline. Sellers continue to defend the key resistance level at 1.1425, holding back further upward attempts.

The US dollar came under pressure after disappointing macroeconomic figures. According to the ADP report, the private sector created just 37 thousand jobs in May, well below the forecast of 80 thousand, marking the weakest performance in two years.

Further downside came from the ISM services PMI, which fell to 49.9 in May, dipping below the 50 mark for the first time in a year, indicating contraction. This reading missed the 52.6 forecast and points to a sharp decline in new business amid rising resource costs.

EURUSD technical analysis

While the EURUSD rate maintains its upward trajectory, the failure to reach a new local high suggests weakening bullish momentum. Today's EURUSD forecast anticipates a potential breakout below the support level and a corrective move towards 1.1270. The Stochastic Oscillator signals a likely bearish turn, with its values rebounding from the resistance level, forming a downward reversal. A breakout below the lower boundary of the bullish channel will confirm the bearish scenario, with the price consolidating below 1.1355.

Source: RoboForex

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Musk’s Rebellion Against Republican Fiscal Plan

Elon Musk’s public opposition to the Trump administration’s flagship tax package marks a dramatic escalation in political tensions between the Tesla CEO and the White House. After personal lobbying efforts with House Speaker Mike Johnson failed to save the EV tax credits, Musk took to X (formerly Twitter), urging Americans to “KILL” the bill, warning that the legislation would “bankrupt America.” Musk described the bill as a “disgusting abomination,” aligning himself with GOP fiscal hawks like Representative Thomas Massie, who echoed concerns about long-term economic sustainability and Musk’s Mars colonization ambitions.

This rare public dissent from a billionaire donor and former Trump advisor has thrown a wrench into the Republican legislative push. The House-approved bill—estimated to increase deficits by $2.4 trillion over a decade—relies heavily on supply-side assumptions that tax cuts will spur enough growth to offset the cost, an argument the Congressional Budget Office does not fully support.

Backlash, Fallout, and Political Implications

Musk’s backlash has broader implications. His recent departure from the Department of Government Efficiency, a symbolic post intended to champion federal budget cuts, coincided with plummeting Tesla sales, tarnishing both his political and corporate brand. Musk’s credibility as an economic adviser within Trump’s circle appears diminished; Senator Roger Marshall bluntly stated Musk was “not important at all” in Wednesday’s GOP meetings.

However, Musk’s political clout remains formidable. As the top political donor in 2024—contributing over $290 million to Republican campaigns, including $255 million to Trump’s reelection—his financial influence is pivotal. Should he withdraw support in protest, the GOP could face significant setbacks in the 2026 midterm elections, where fewer than two dozen close House races are expected to determine control.

EV Industry at Risk as Credits Face Elimination

The heart of Musk’s frustration is the planned sunset of EV subsidies, which have played a crucial role in Tesla’s business model and the broader U.S. transition to clean energy. With Chinese and European automakers rapidly advancing their EV ecosystems and receiving strong state support, Musk views the rollback of incentives as a strategic misstep that could undercut American competitiveness in the green tech sector.

Tesla, already facing declining margins and intensifying price wars, may lose more ground without these tax credits, especially as legacy automakers like Ford and GM accelerate their EV lineups.

White House Defends Bill Amid Corporate Outcry

Despite Musk’s scathing critique, the Trump administration has stood by its bill. The White House released a statement calling the legislation a catalyst for “unprecedented economic growth,” maintaining that the tax cuts will pay for themselves. Speaker Johnson reinforced this message, labeling Musk’s criticisms as “dead wrong.”

Behind the scenes, infighting within the administration appears to have compounded the issue. Sources suggest that Musk’s prior conflicts with Presidential Personnel Chief Sergio Gor led to the withdrawal of Jared Isaacman’s NASA nomination, a move widely interpreted as retaliation tied to Musk’s diminishing influence.

Musk’s opposition to the Trump tax bill has created a rare and highly visible rift within the Republican establishment. His shift from the administration’s budget champion to one of its fiercest critics signals growing tension between fiscal conservatives, tech billionaires, and populist tax policy. With EV subsidies on the chopping block, budget deficits rising, and the 2026 midterms looming, the stakes of this political standoff could reshape not only economic policy but the future of America’s green technology leadership.