Gold shorted after two-day rally

Today’s headlines

What’s happening: Gold prices fell this morning, snapping a two-session rebound.

What happened: Renewed tensions between the US and Iran drove crude oil prices higher and reignited inflation concerns.

Both nations later agreed to stop the attacks ahead of peace negotiations this week.

Why it matters: The US and Iran had reached a 14-point interim peace deal on June 17 and had agreed to halt attacks and reopen the Strait of Hormuz.

A cargo vessel was struck by an unidentified projectile in the Strait of Hormuz last week, raising security concerns over the control of traffic in the waterway. Both Iran and the US blamed the other for a breach of the ceasefire.

Despite the latest incident, crude oil shipments from the Persian Gulf through the key waterway surged to their fastest level since the start of the conflict. Iran and the US agreed to pause strikes ahead of negotiations, scheduled to resume in Doha, Qatar on Tuesday.

Concerns over the fragility of the peace talks weighed on overall market sentiment, stoking inflation concerns.

Meanwhile, data released by the US last week showed PCE inflation at 3.4% year-over-year in May, in-line with market estimates. This prompted investors to scale back their speculations on rate hikes by the Federal Reserve this year.

Weakness in the US dollar lent some support to gold prices as a lower greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged lower to 101.35 this morning.

Spot price for gold fell 0.5% to $4,074.30 an ounce this morning, after recording gains in the previous two sessions.

In other metals trading, spot silver declined 1.6% to $58.3295 an ounce, platinum lost 0.1% to reach $1,616.05 and palladium fell 0.7% to $1,204.40.

What to watch: Investors will continue monitoring developments in the US-Iran talks.

Data on US jobs report and the ISM manufacturing PMI, due to be released this week, will remain in focus. The US economy, which added 172,000 jobs in May, is expected to add 114,000 jobs in June, while the unemployment rate is expected to remain at 4.3%.

The markets today

European stocks in focus today ahead of a basket of major economic reports

Context: Equity markets in Europe closed lower on Friday, reversing the previous session’s gains.

Details: Data released on Friday showed Eurozone median inflation expectations for the next 12 months fell to 3.5% in May from 4.0% in each of the prior two months. This represented the lowest reading in three months.

France’s registered unemployment climbed by 15,500 to 3.116 million in May, compared to a decline of 9,000 in the previous month.

European markets came under pressure on Friday amid a decline in banking, auto and AI stocks. Reports of OpenAI considering delaying its IPO (initial public offering) to 2027 raised doubts on the market’s appetite for AI stocks, exerting pressure on the shares of European semiconductor heavyweights. Infineon’s stock declined almost 5% on Monday, while shares of STMicroelectronics was down almost 4% and ASML fell around 3%.

Banking stocks recorded losses despite speculations of the European Central Bank keeping its benchmark interest rates unchanged in 2026 following a further decline in crude oil prices.

Shares of Deutsche Bank declined around 3%, while BNP Paribas’ stock fell nearly 2%. Shares of Volkswagen also shed around 4% on Friday following reports of the company planning to layoff up to 100,000 jobs and shut down four factories.

The STOXX Europe 600 Index fell 0.68% to settle at 635.88, while the FTSE 100 lost 0.21% to reach 10,508.02 on Friday. Germany’s DAX 40 declined 1.29% to close at 24,671.22, while France’s CAC 40 lost 0.55% to 8,384.87.

What to watch: Investors will continue monitoring developments related to the US-Iran peace talks.

Data on economic sentiment (1300 UAE Time), consumer confidence (1300 UAE Time) and
industrial sentiment (1300 UAE Time) from the Eurozone will be released today. The Eurozone’s economic sentiment indicator, which edged higher to 93.5 in May, is expected to rise further to 94.3 in June.

Analysts expect Eurozone’s consumer confidence to improve for the second straight month to -17.7 in June from -19 in the previous month, while the industrial confidence indicator is expected to improve to -7.8 in June from -8.0 in May.

Other Markets: US trading indices closed lower on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.09%, 0.05% and 1.09%, respectively.

The news shaping the markets

Ukraine launched drone strikes on two Russia’s oil refineries, continuing to increase air attacks on Moscow’s energy infrastructure. The news sent the USD/RUB pair higher in forex trading this morning.

China’s industrial profits jumped 18.8% year-over-year to ¥3.14 trillion in the January-May period, accelerating from 18.2% during the first four months of the year. However, industrial profit growth of 21.1% year-over-year marked an easing from April’s 24.7%, which lent support to the USD/CNY forex pair.

Mexico’s trade surplus rose to $2.26 billion in May from $1.23 billion in the year-ago period. The latest reading coming in short of market estimates of $4.6 billion sent the USD/MXN pair higher in forex trading this morning.

Brazil’s unemployment rate eased to 5.6% in the rolling quarter ending in May compared to 5.8% in the prior period. The latest reading coming in-line with market estimates exerted pressure on the USD/BRL forex pair.

Japan’s retail sales jumped 5.3% year-over-year in May, accelerating from 2.8% in the previous month. This being the strongest retail sales growth since November 2023 sent the USD/JPY pair slightly lower in forex trading this morning.

What else to watch today

Eurozone’s loans to companies (1200 UAE Time), loans to households (1200 UAE Time), M3 money supply (1200 UAE Time), consumer inflation expectations (1300 UAE Time), selling price expectations (1300 UAE Time) and services sentiment (1300 UAE Time), UK’s mortgage approvals (1230 UAE Time), mortgage lending (1230 UAE Time), M4 money supply (1230 UAE Time), net lending to individuals (1230 UAE Time) and Bank of England’s consumer credit (1230 UAE Time), Spain’s business confidence (1400 UAE Time), India’s industrial production (1430 UAE Time) and manufacturing production (1430 UAE Time), Brazil’s IGP-M inflation (1500 UAE Time) and bank lending (1530 UAE Time), US Dallas Fed manufacturing index (1630 UAE Time) as well as Argentina’s economic activity (2300 UAE Time).