Gold price down but up from overnight lows after weak U.S. data

Commodity

Summary:

Gold dipped early Wednesday but recovered slightly after weak U.S. jobs and GDP data fueled Fed rate-cut hopes. Silver fell sharply. Market sentiment remains cautious amid ongoing trade and economic concerns.

Gold prices are lower in early U.S. trading Wednesday, but have moved up from overnight lows following some downbeat U.S. economic data just out. Silver prices are sharply down. June gold was last down $34.90 at $3,299.50. May silver prices were last down $1.10 at $32.175.

The just-released ADP national employment report for April was a big downside miss, showing a gain of 62,000 jobs versus expectations for up 120,000. Also, the first-quarter U.S. GDP number came in at down 0.3% versus expectations for a rise of 0/4%, quarter-on-quarter. These numbers fall into the camp of the monetary policy doves, who want the Federal Reserve to lower U.S. interest rates sooner rather than later.

Asian and European stock markets were mixed to firmer in overnight trading. U.S. stock indexes are pointed to lower openings today in New York. Broker SP Angel writes the stock markets “have settled into a state of calm” as U.S. Treasury yields have dipped and the volatility index (VIX) has also declined. This is putting strong selling pressure on the safe-haven gold market at mid-week. The key question yet to be answered is: Has the worst of the trade-tariff anxiety in the marketplace passed? If the answer turns out to be yes, then the global stock markets have put in major bottoms. If the answer is no, then a more dour scenario of prolonged stock market weakness and even global economic recession becomes more likely.

China’s economy is starting to feel the effects of the trade war with the U.S. China’s new export orders plummeted in April to the lowest levels since the pandemic, with overall manufacturing activity the weakest in more than a year. Dow Jones Newswires reports, “The sharp pullback shows Trump’s eye-watering tariffs on Chinese imports are starting to squeeze the engine room of China’s economy, piling pressure on Beijing to boost its stimulus efforts to shore up growth.”

The key outside markets today and see the U.S. dollar index slightly higher. Nymex crude oil futures prices are weaker and trading around $59.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.17%.

A busy slate of U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the first estimate of first-quarter GDP, the employment cost index, the Chicago ISM business survey, pending home sales, personal income and outlays and the weekly DOE liquid energy stocks report.

Gold price down but up from overnight lows after weak U.S. data_1

Technically, June gold futures bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $3,509.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,200.00. First resistance is seen at this week’s high of $3,363.80 and then at last Friday’s high of $3,384.10. First support is seen at $3,300.00 and then at last week’s low of $3,270.80. Wyckoff's Market Rating: 7.0.

Gold price down but up from overnight lows after weak U.S. data_2

May silver futures bulls have the firm overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $35.00. The next downside price objective for the bears is closing prices below solid support at $32.00. First resistance is seen at last week’s high of $33.69 and then at $34.00. Next support is seen at this week’s low of $32.585 and then at $32.00. Wyckoff's Market Rating: 7.0.

Source: kitco

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Adam

Economic

The Australian dollar has been showing strong movement this week but is calm on Wednesday. In the European session, AUD/USD is trading at 0.6391, up 0.14% on the day.

Australian core CPI falls to 2.9%

Australia released the CPI report for the first quarter. The Australian dollar didn't show much reaction, but the data could point to another rate cut from the Reserve Bank of Australia.

Headline CPI remained unchanged at 2.4% y/y, just above the market estimate of 2.3%. The significant news was that RBA Trimmed Mean CPI, the key core inflation indicator, dropped to 2.9% y/y from a revised 3.3% gain in Q4 2024. This is the first time in three years that core CPI is back within the RBA's target band of between 1-3%.

The drop in core inflation is good news for the government, with the national election on Saturday. Australian Treasurer Jim Chalmers jumped on the news, stating that the market expects four or five rate additional rate cuts this year, which would save households with mortgages "hundreds of dollars".

The Reserve Bank is expected to lower rates at its next meeting on May 20, which would mark only the second rate cut this year. After cutting rates in February, the central bank has stayed on the sidelines as US President Trump's tariffs have escalated trade tensions and sent the financial markets on a roller-coaster ride.

US employment, GDP expected to decelerate

In the US, the markets are bracing for some weak data later today. ADP employment is expected to slip to 108 thousand, compared to 155 thousand in the previous release. ADP is not considered a reliable gauge for Friday's nonfarm payrolls, but a weak reading will only increase the anxiety of the nervous markets.

US first-estimate GDP for Q1 is expected to slide to just 0.4% q/q, after a 2.4% gain in Q3. If there is a surprise reading from GDP, we could see a strong reaction from the US dollar after the release.

AUD/USD Technical

AUD/USD is testing resistance at 0.6403. Above, there is resistance at 0.6431

0.6357 and 0.6329 are the next support levels

Australian core CPI falls within the RBA target, Aussie shrugs_1

AUDUSD 1-Day Chart, April 30, 2025

Source: marketpulse

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

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Fiona Harper

Cryptocurrency

Market sentiment for Bitcoin (BTC) appears increasingly bearish as U.S. markets exhibit weakness, fueled by recent remarks from Trump critiquing Biden for economic instability. This has set the stage for potential declines in cryptocurrency values as summer nears, sparking interest in how digital assets might perform leading up to mid-2025.

What Lies Ahead for Cryptocurrencies?

As the crypto market approaches the summer months, a typical trend of declining prices is expected, consistent with historical patterns of “sell and go on vacation.” However, the possibility of an anomalous market performance this year remains, especially if macroeconomic factors shift favorably.

What's the Projection for Bitcoin and Dogecoin?

There are insights that potential strategic talks with China, combined with significant upcoming Federal Reserve announcements, could drive a short-term rally in cryptocurrencies. Bitcoin, in particular, may peak based on recent chart analyses predicting a run towards $131,000. This forecast stems from Fibonacci extensions, indicating minimal resistance until BTC surpasses the $100,000 mark.

If Bitcoin reaches the anticipated level before the summer, a domino effect could elevate the entire crypto market. Notably, a significant increase in open positions, reported with a $2.2 billion rise over a span of 20 days, reflects growing interest and market activity.

Bitcoin's (BTC) open interest experienced volatility, initially falling from $11.9 billion to $7.5 billion, but later recovering by 29% to approximately $9.7 billion. This resurgence fuels speculation of a robust pre-summer upswing in the crypto space, with analysts noting that heightened futures activity might signal mounting upward pressure.

● Fibonacci extensions forecast Bitcoin could target $131,000.

● Open interest in BTC increased by $2.2 billion in 20 days.

● DOGE is forming an Accumulation Cylinder, suggesting potential price rise.

● Bitcoin dominance could trigger comprehensive market movements.

Focusing on Dogecoin (DOGE), investors are optimistic as recent patterns suggest an impending price surge past $3 per token. A chart indicating DOGE's Accumulation Cylinder implies a notable rise could be on the horizon, even though the catalyst remains uncertain. Adding weight to these predictions, BTC dominance peaking is seen as a perfect recipe for market movement.

As the crypto community braces for these developments, all eyes remain on key economic and geopolitical events that may either propel or hinder this anticipated surge in digital currency values leading into the summer of 2025.

Source: CryptoSlate

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Adam

Economic

German consumer inflation came in at 2.2% in April on an annual basis, easing slightly from March levels but coming in above expectations, preliminary data showed Wednesday.

Economists polled by Reuters had estimated a 2.1% reading. The country’s consumer price index, harmonized for comparability across the euro zone, had come in at 2.3% in March on an annual basis.

So-called core inflation, which excludes food and energy prices, accelerated to 2.9% in April from 2.6% in March. The closely-watched services print also jumped to 3.9%, after a 3.5% reading in the previous month.

Energy prices meanwhile dropped sharply, falling by 5.4% according to the statistics office.

While the inflation rate closing in on the European Central Bank’s 2% mark is good news for consumers at first glance, there are some less positive points about the data on closer look, Sebastian Becker, economist at Deutsche Bank, said in a note Wednesday.

The slight decrease of the headline figures only took place due to lower energy and food costs, he said. “In comparison, the core inflation rate, which is more important for the ECB ... rose notably again.” And services inflation appears “considerably more stubborn than expected,” Becker added.

Economic growth

Earlier on Wednesday, preliminary data showed that Germany’s economy expanded by 0.2% in the first quarter from the previous three-month period.

The figure, released by the German federal statistics office, is adjusted for price, calendar and seasonal variations.

The gross domestic product reading was in line with estimates from economists polled by Reuters. Germany’s gross domestic had contracted by 0.2% in the fourth quarter.

The statistics office attributed the quarterly increase to the fact “that both household final consumption expenditure and capital formation were higher than in the previous quarter.”

While acknowledging Wednesday’s figures were positive, “the quarterly increase is still far too small to end the country’s long-lasting stagnation,” Carsten Brzeski, global head of macro at ING, said in a note.

Europe’s largest economy has long been sluggish, with its GDP flip-flopping between growth and contraction in each quarter throughout 2023 and 2024. The country has so far avoided technical recession, which is defined by two consecutive quarters of contraction.

Key sectors of the economy, such as autos, have been suffering from stronger competition from China. Other industries including housebuilding and infrastructure have also been going through trying times that have been linked to higher costs, muted investment and bureaucratic hurdles.

Separately, U.S President Donald Trump’s tariff policies have thrust uncertainty onto export reliant Germany which counts the U.S. as its most important trading partner.

As part of the European Union, Germany is facing 20% blanket tariffs on goods exported to the U.S., although these levies have been temporarily reduced to 10% to allow time for negotiations. U.S. duties on steel, aluminum and autos also affect the country.

The German government last week cut its economic outlook to predict stagnation in 2025, with outgoing economy minister Robert Habeck saying Trump’s trade policies and their impact on the country were the main factor behind the revision.

Fiscal upheaval

One bright spot could emerge on the horizon. Germany earlier this year made changes to its long-standing debt brake fiscal rule, enabling higher defense spending, and creating a 500 billion euro ($570 billion) fund dedicated to infrastructure and climate investments.

This move has widely been regarded as a positive shift for the German economy, although much still depends on how the changes are implemented.

“Today’s GDP report paints a picture of what could have happened if it hadn’t been for US President Donald Trump’s tariff blast – an economy that bottoms out and goes through a weak cyclical rebound, but could gain momentum with the announced fiscal stimulus,” ING’s Brzeski said.

While this recovery could still happen, the process now will likely take longer, the analyst said. He stressed that tariffs, uncertainty and other shifts in trade and geopolitics are weighing on the short-term economic outlook, while the planned fiscal measures can boost long-term growth.

Source: cnbc

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Thomas

Economic

“I have to start off by saying, that’s Biden. That’s not Trump,” Trump said Wednesday during a Cabinet meeting.

Inflation-adjusted gross domestic product decreased an annualized 0.3% in the first quarter, well below average growth of about 3%, according to initial government data published Wednesday.

“Let’s give us a pass on the first month, we were sort of getting a little bit used to things,” Trump added.

The decrease was led by companies pushing to stockpile imported merchandise ahead of implementation of Trump’s tariffs, with net exports subtracting nearly 5 percentage points from GDP. Cuts to federal funding also impacted the figure.

White House officials have pointed to promising data within the report – including advancing consumer spending and surging business equipment purchases – to argue the economy remains strong.

“It takes a little while to get those facilities built, but they’re coming in with big big numbers,” Trump said.

Trump also said he saw encouraging signs his tariffs were starting to have an impact, even while maintaining they “haven’t kicked in yet.” Trump paused higher duties on dozens of trading partners except China, which he hit with a 145% levy. A flat 10% remains in place for almost all other trading partners for a 90-day period, which several nations are using to negotiate deals with the US.

Investors have worried that Trump will be unable to broker a deal with Beijing amid the standoff and that sky-high duties will cause a supply shock. The president argued a recent decrease in cargo flows was an indication Beijing would soon need to engage.

“At a certain point, I hope we’re going to make a deal with China,” Trump said, adding that he was “not happy” with the sharp decline in trade between the two nations.

“I want China to do well,” he continued. “I want every country to do well, but they have to treat us fairly also.”

Still, downbeat numbers from ADP Research showing that hiring had moderated in April and broader concerns that the tariffs could lead to goods shortages and inflation drove stocks to a broad selloff on Wednesday.

In a social media post earlier in the day, Trump urged investors to remain patient and blamed Biden for market woes, while denying his tariff regime played a role.

“This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other,” Trump wrote.

The benchmark S&P 500 Index rose under Biden’s watch, but is down about 7% since Trump’s inauguration.

Source: Bloomberg Europe

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Adam

Bond

Long-term government bonds underperformed Wednesday as mixed economic data muddled the path for the Federal Reserve while the Treasury Department’s unchanged guidance on debt issuance disappointed some investors who had expected more support for longer-maturity bonds.

Yields on 30-year bonds rose 3 basis points to 4.68%, while those on two-year rates declined 2 basis points to 3.62%, following weaker-than-expected GDP data, stronger-than-forecast consumption and higher-than-estimated prices. The Treasury maintained its guidance on keeping the issuance of longer-dated securities unchanged for at least “several quarters” while flagging it could potentially enhance its buyback program.

“The overall takeaway to me is stagflation concerns are validated even before many tariffs come into effect,” Zachary Griffiths, head of US investment grade and macro strategy at CreditSights. “I think you’re seeing that in the market reaction with the curve bear steepening now.”

The 10-year yield jumped as much as five basis points to 4.23% after the data and Treasury’s quarterly refunding announcement, then pared the move.

The Treasury in a statement said it plans to sell $125 billion of securities at next week’s so-called quarterly refunding auctions, which span 3-, 10- and 30-year maturities. It also reiterated guidance that’s been in place since January 2024, according to which it expects to keep auction sizes steady for the next several quarters.

While the guidance was in line with most investors’ expectations, some market watchers had anticipated that Treasury officials could take a more aggressive stance to soothe the markets’ supply concerns. Citigroup’s strategists, for example, last week said that the curve may steepen if buybacks are not increased.

“Although guidance was unchanged, the long-end reaction suggests more was expected from Treasury,” Wells Fargo’s strategists Angelo Manolatos and William Gibbons wrote in a note. “Some market participants likely expected increased liquidity support buybacks and/or a discussion about a shorter weighted average maturity.”

The underperformance of long bonds widened the yield gap between five- and 30-year yields 4 basis points to 92 basis points. The curve has steepened about 30 basis points in April. The so-called curve steepening has been a popular theme in the bond market as traders expect that the slowing economy would eventually lead the Fed to cut borrowing costs, while inflation and bond supply would keep long-end yields elevated.

Wednesday’s data showed the US economy contracted at the start of the year for the first time since 2022 amid a monumental pre-tariffs import surge and softer consumer spending. The GDP report also highlighted that a closely watched measure of underlying inflation accelerated to a 3.5% pace in the first quarter — the most in a year.

“The upside in consumption is the main market driver here followed by the stronger price index,” said Jordan Rochester, head of macro strategy for EMEA at Mizuho International Plc. “GDP today says that is not the current problem to worry about. Instead it’s higher prices and huge import accumulation.”

April was a highly volatile month in the $29 trillion Treasury market as investors gamed out the impact of President Donald Trump’s tariffs on inflation and economic output. This month’s trading range for the US 10-year government bond was the widest since the collapse of SVB in early 2023.

A key Bloomberg gauge of the Treasury markets was up 0.6% in April, the fourth monthly advance and the longest winning streak since last September.

In recent days, the market has rallied amid signs that the US economy is stumbling. That fueled bets on further interest-rate cuts from the Federal Reserve, with swaps now implying 96 basis points of easing this year, which means four quarter-point cuts are almost fully priced. That compares to just three at the end of March. At least one big option trader, however, has dialed up an $18 million bet on the potential that the Fed will avoid cutting interest rates at all this year.

The focus turns later this week to the US jobs report on Friday, which is expected to show the economy created 135,000 new positions in April compared to 228,000 in March.

What Bloomberg strategists say...

“The quarterly refunding announcement duly saw unchanged coupon auction sizes and unchanged guidance for steady issuance over the next several quarters. TIPS re-openings were adjusted slightly higher. There was some discussion of enhancing the buyback program, though that seems unlikely to move the needle much given the gaping budget deficit. Given the opacity of the debt ceiling issue, the Treasury declined to issue any guidance on the x-date. All in, this was all largely as expected and should have a minimal impact.”

source : Bloomberg

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Adam

Economic

China–U.S. Trade War

Companies slowed hiring sharply in April as they braced against potential impacts from President Donald Trump’s tariffs against U.S. trading partners, ADP reported Wednesday.

Private sector payrolls rose by just 62,000 for the month, the smallest gain since July 2024, amid heightened uncertainty over the degree of the tariffs and the impact they would have on hiring plans and broader economic conditions.

The total marked a deceleration from the downwardly revised gain of 147,000 in March and missed the Dow Jones consensus estimate for an increase of 120,000.

“Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data,” said ADP’s chief economist, Nela Richardson. “It can be difficult to make hiring decisions in such an environment.”

Wage gains also took a step backward, rising 4.5% from a year ago for those staying in their jobs, down 0.1 percentage point from March. However, job changers saw an increase to 6.9%, up 0.2 percentage point.

From a sector standpoint, leisure and hospitality posted the biggest gain, adding 27,000 jobs. Others that showed increases included trade, transportation and utilities (21,000), financial activities (20,000), and construction (16,000). Education and health services lost 23,000 positions while information services fell by 8,000.

The ADP estimate serves as a precursor to Friday’s nonfarm payrolls data from the Bureau of Labor Statistics, and the two reports can differ substantially. Economists surveyed by Dow Jones are looking for job growth of 133,000 in the BLS report, which unlike ADP includes government hiring. The unemployment rate is expected to be unchanged at 4.2%.