Fed Policy Uncertainty Supports Gold

Gold prices found support as financial markets pared back expectations of further interest rate hikes from the U.S. Federal Reserve. However, persistent inflation and public dissent from three hawkish Fed officials, who argued for tighter monetary policy, continue to fuel uncertainty about the future path of interest rates.

Japanese Intervention Roils Currency Markets

Significant volatility hit the currency markets following suspected intervention by Japanese authorities to strengthen the yen, which caused a sharp, though temporary, sell-off in the U.S. Dollar. The dollar's retreat was also influenced by hawkish remarks from the Bank of Japan, creating broad turbulence and affecting the pricing of dollar-denominated assets.

Mixed Global Economic Data Creates Uncertainty

Recent economic data painted a divergent picture of global growth, with reports showing a broad-based slowdown in China's manufacturing and services sectors. In contrast, North American economies displayed resilience, with Canada's GDP expanding and underlying private demand in the U.S. remaining strong, creating a mixed outlook for global commodity demand.

Industrial Demand Outlook Clouded by China's Slowdown

The outlook for industrial metals is facing headwinds from China's weakening economy, with data pointing to softer industrial output and construction activity. While some analysts point to potential production tightness in markets like aluminium, broader market commentary also raises the possibility of capital rotating from speculative tech assets back into the physical economy, including the materials and mining sectors.