Oil price gains are limited, weak U.S. data supports gold prices, tariff uncertainty affects demand outlook

Basic news

On Thursday (June 5, Beijing time), spot gold trading around 3373.41; gold prices rose nearly 1% on Wednesday, and investors struggled to cope with the growing economic and political uncertainty, supported by weak US dollar and weak U.S. data. U.S. crude oil traded around $62.67 per barrel, and U.S. oil closed down on Wednesday after U.S. data showed unexpectedly sharp increase in gasoline and diesel stocks, OPEC+ plans to increase production, fuel supply expansion and trade tensions cast a shadow on the outlook for energy demand.

Focus on this day

European Central Bank President Lagarde held a press conference on monetary policy, and defense ministers from NATO countries gathered in Brussels to prepare for the NATO leaders summit held at the end of June.

Stock Market

U.S. stocks closed up and down on Wednesday, with the S&P 500 almost flat, the Nasdaq, the major technology stock market, rose slightly, the Dow Jones Industrial Average fell, and weak U.S. data reveals the losses caused to the economy by President Trump's trade policy.

The U.S. service industry shrank for the first time in nearly a year in May, while the investment prices paid by enterprises rose, a reminder that the economy is still facing the risks of slowing growth and rising inflation. The S&P 500's early gains basically disappeared as they approached the close, and the trading volume was relatively low. "The impact of tariffs may increase the prices paid by service xmserving.companies." The ADP National Employment Report showed that the increase in private jobs in the United States in May was the smallest in more than two years.Investors are awaiting Friday’s non-farm jobs data for more signs of how trade uncertainty affects the U.S. labor market.

Washington doubled tariffs on imported steel and aluminum to 50%, and Wednesday was also the deadline for Trump to ask trading partners to propose the best options to avoid other punitive tariffs xmserving.coming into force in early July.

The S&P 500 is still more than 2% below the record high set in February. Barclays joined the ranks of many brokerages and raised the S&P 500's year-end target price, pointing out that trade uncertainty has eased and that earnings growth is expected to tend to normal in 2026.

The Dow Jones Industrial Average fell 0.22% to 42427.74 points; the S&P 500 rose slightly 0.01% to 5970.81 points; and the Nasdaq rose 0.32% to 19460.49 points. HP rose 0.8%, and demand from its artificial intelligence (AI) server and hybrid cloud division helped the xmserving.company surpass expectations for the second quarter revenue and profit.

Wells Fargo, the fourth largest bank in the United States, closed down 0.4%, briefly hitting a three-month high earlier, after the Fed lifted its long-standing asset cap of $1.95 trillion.

Wells Fargo CEO Charlie Scharf told Reuters that he expects all of the bank's operations to grow, including wealth, business and investment banking, as well as credit cards, but not mortgages.

Golden market

Gold prices rose nearly 1% on Wednesday, backed by weaker dollar and weak U.S. data, investors struggled to cope with growing economic and political uncertainty. Spot gold climbed 0.8% to $3378.22 an ounce, after a 1% increase. U.S. gold futures closed up 0.7% to $3,399.20.

The dollar index fell 0.5%, making gold cheaper for buyers holding other currencies, while the index U.S. 10-year Treasury yield fell.

Independent metals trader TaiWong said the U.S. service industry, which accounts for two-thirds of the economy, contracted for the first time in a year, which allowed gold to rise 1% after it got rid of the weak ADP jobs report, although it has historically fluctuated heavily and would pave the way for a record high if the closing price returns above $3,400.

The American Institute of Supply Management (ISM) said its non-manufacturing purchasing managers index fell to 49.9 last month, the lowest since June 2024, while ADP data shows that the number of private jobs increased in the United States is the least in more than two years.

Everyone is following Friday’s U.S. nonfarm jobs report to find clues to the Fed’s next move.

Spot silver fell 0.1% to $34.45; platinum rose 1.5% to $1,089.99; palladium fell 1% to $1,000.55. Oil market

Oil prices closed down nearly 1% on Wednesday, after U.S. data showed gasoline andDiesel stocks have increased unexpectedly significantly, OPEC+ plans to increase production have led to a swelling fuel supply and trade tensions have cast a shadow on the outlook for energy demand.

Brent crude oil futures closed down 1.2% at $64.86 a barrel. U.S. crude oil closed down 0.9% at $62.85.

The U.S. Energy Information Administration (EIA) said U.S. gasoline inventories rose by 5.2 million barrels last week. Analysts interviewed by Reuters were expected to increase by 600,000 barrels. Distillate stocks increased by 4.2 million barrels xmserving.compared with an expected increase of 1 million barrels. Crude oil inventories fell by 4.3 million barrels. Analysts surveyed by Reuters expect a 1 million barrel reduction.

UBS analyst Giovanni Staunovo said, "I think the report is negative because refined oil inventories have increased significantly. OPEC+ oil-producing countries plan to increase production by 411,000 barrels per day in July, which also puts pressure on investors."

On Tuesday, oil prices rose about 2% to two-week highs, driven by concerns about supply disruptions and expectations that OPEC member Iran will reject the U.S. proposal for a nuclear deal that is crucial to ease sanctions.

On Tuesday, the Organization for Economic Cooperation and Development (OECD) lowered its global economic growth expectations as the consequences of Trump's trade policy have a greater impact on the U.S. economy, which in turn will affect oil demand.

Similarly, some production operations in Canada that were closed due to wildfires have been restarted on Wednesday. Wildfires in Canada have caused the country to reduce production by about 344,000 barrels per day, according to Reuters' calculations on Tuesday.

Foreign exchange market

The dollar fell across the board on Wednesday, after weaker than expected U.S. private employment data highlighted the continued slowing trend of the labor market, and the U.S. service industry shrank for the first time in about a year in May.

ADP National Employment Report showed on Wednesday that the number of private jobs in the United States increased by only 37,000 in May, far lower than expected. The increase in April was revised to 60,000, and the previous value was 62,000. Economists surveyed by Reuters had previously expected 110,000 private jobs to increase in May.

After the data was released, US President Trump once again called on Federal Reserve Chairman Powell to lower interest rates. MonexUSA trading director Juan Perez said: This is a significant gap between expectations and reality. He said: "The labor force is not hurt, the recovery after the COVID-19 pandemic is good enough, and people are enjoying good opportunities. This statement is changing, which is definitely very unfavorable to the US dollar."

Also data shows that the U.S. service industry shrank for the first time in nearly a year, and the investment prices paid by enterprises have risen, reminding people that the economy is still facing the danger of experiencing a period of very slow growth and high inflation.

The US dollar fell 0.7% against the yen to 142.89 yen. The euro rose 0.4% against the dollar to 1.1 ahead of the ECB's interest rate decision on Thursday.$414.

Investors are awaiting Friday's monthly U.S. employment data to judge the state of the labor market and continue to focus on trade negotiations. The Trump administration has set Wednesday the deadline for countries to submit their best trade plans, the same day that tariffs on U.S. imports of steel and aluminum are doubled.

The US dollar index fell 0.3% to 98.838, not far from the low of 97.923 at the end of April. The pound rose 0.2% against the US dollar at $1.35,515. The country and its metal exports are protected from the U.S. tariffs raised as the UK has signed a trade agreement.

Traders are also paying attention to the trends in the Japanese market, with sources told Reuters that the Bank of Japan is considering slowing down its pace of reducing bond purchases from the next fiscal year. The Canadian dollar rose about 0.4% against the dollar after the Bank of Canada kept its key indicator interest rate unchanged at 2.75%, saying it was necessary to investigate the impact of U.S. trade policy.

International News

The US Court of Appeals prevents the Trump administration from disbanding the Ministry of Education and demands the restoration of layoffs

On the 4th local time, the US First Circuit Court of Appeals rejected the Trump administration's appeal, upholding the federal judge's ruling, demanding that the government suspend the execution of the executive order to dissolve the Ministry of Education and restore the positions of employees who were previously fired in the massive layoffs. Previously, the Trump administration has implemented a series of measures to promote the closure of the Ministry of Education, including large-scale layoffs. In March this year, Trump signed an executive order requiring Education Secretary Linda McMahon to take all necessary measures to promote the closure of the Ministry of Education and return the right to education management to the states. The latest ruling means that the Trump administration will not be able to advance the Ministry of Education’s restructuring plan in the short term.

Mexico hopes to get the same treatment given to the United Kingdom by the United States in terms of steel tariffs

Mexico Economy Minister Marcelo Ebrard said in an interview with RadioFormula that Mexico hopes to reach the same agreement with the Trump administration on steel tariffs as the United Kingdom. “We will ask the United States to give Mexico the same treatment as the United Kingdom,” Ebrard said. He will travel to Washington on Thursday and hold trade talks with the United States the next day. Ebrard said U.S. xmserving.commerce Secretary Lutnik told him they would find a solution to the problem, and that Mexico has fulfilled all xmserving.commitments with the U.S. in steel tariff negotiations, including strengthening supervision of factories that purchase steel from other countries.

U.S. Congress Budget Office: Trump's tariffs will reduce the deficit and will drag down the economy

On June 4 local time, an analysis report released by the U.S. Congress Budget Office showed that US President Trump's tariff policy will reduce the deficit by $2.8 trillion within 10 years, but at the same time it will lead to economic contraction, rising inflation rate and reduce the overall purchasing power of American households. According to reports, the U.S. Congressional Budget Office outlines how the Trump administration's plan to impose widespread tariffs on countries around the world will affect the U.S. in a letter to Democratic Congressional leadership, according to reports.family. One of the forecasts shows that U.S. households will reduce their purchases from countries with tariffs. In addition, the Congressional Budget Office estimates that tariff policies will lead to an average annual inflation rate in the United States by 0.4 percentage points in 2025 and 2026.

Federal Beige Book: xmserving.commodity spending affected by tariffs increased

Federal Beige Book said that half of the regions reported a slight to moderate decline in economic activity, 3 regions said no change, and 3 regions reported a slight increase. All regions have pointed out that economic and policy uncertainty is at a high level, leading businesses and families to hesitate and take cautious approach in their decision-making. Manufacturing activity declined slightly. Consumer spending reports were mixed, with most regions saying spending slightly decreased or unchanged; however, some regions reported that they expected increased spending on goods affected by tariffs. Residential real estate sales have changed little, with reports on new home construction in most regions showing that construction activities have remained flat or slowed down. Bank loan demand and capital expenditure plans report vary. Port activity is active, but transport and warehousing activities in other regions are reported mixed.

Saudi hopes OPEC+ will further increase production "super-largely"

According to people familiar with the matter, Saudi Arabia hopes OPEC+ will continue to accelerate oil production growth in the next few months, as Saudi Arabia pays more attention to regaining lost market share. Saudi OPEC+ is increasingly dominant, and hopes the organization will increase production by at least 411,000 barrels per day in August and possible September, people familiar with the matter said. Saudi Arabia is eager to lift production cuts as soon as possible to take advantage of peak demand in the northern hemisphere summer, a person familiar with the matter said. OPEC+ has agreed to boost production by 411,000 barrels per day in May, June and July, despite some disagreements in their recent meetings on the strategy. A Russian-led faction hopes to suspend production increases, but in the end Saudi views prevail.

The Bank of Canada held its second consecutive meeting and held its back on the move. Officials stressed that it might be necessary to cut interest rates in the future.

The Bank of Canada held interest rates unchanged for the second consecutive meeting, but officials said that if the economy weakens while inflation remains controllable due to the impact of U.S. tariffs, it may be necessary to reduce borrowing costs. Central bank officials led by Governor Tiff Macklem kept the policy interest rate unchanged at 2.75% on Wednesday, in line with expectations of the market and most economists surveyed. Policymakers said they remained silent as they learn more about the trade conflict with Trump. They called the trade conflict "the biggest downside for the Canadian economy" as it slashed exports and exacerbated uncertainty facing consumers and businesses. Meanwhile, officials said the economy performed better than expected in the first quarter, noting that indicators measuring core inflation have seen a surge in recent years.

U.S. President Trump: Powell must cut interest rates now

After the release of the US ADP employment data in May, U.S. President Trump said that Powell must cut interest rates now. He also said, "It's incredible that Europe hasRate cuts have been nine times. Earlier, the number of ADP employment in the United States increased by 37,000 in May, with an expected increase of 110,000, and the previous value increased by 62,000. The recruitment rate in the United States in May reached the lowest level since March 2023.

Domestic News

China xmserving.commodity Price Index in May rose by 0.3% month-on-month

China Federation of Logistics and Procurement announced the China xmserving.commodity Price Index in May today (5th). Judging from the performance of the index, China xmserving.commodity Price Index in May The xmserving.commodity price index rebounded slightly month-on-month, indicating that as global market tensions eased, the confidence of xmserving.commodity markets recovered to a certain extent, and market vitality increased. China's xmserving.commodity price index was 110.3 points in May, up 0.3% month-on-month. Among the 50 xmserving.commodities that the China Federation of Logistics and Procurement focused on monitoring, 17 xmserving.commodities with prices rose month-on-month in May.

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