Risk-Off Sentiment Returns as Gold Surges $20

Market Overview

U.S. equities closed mixed on Friday after a volatile session driven by renewed tensions surrounding former President Trumps tariff policies and fresh reports of tech-related sanctions. Markets initially dipped but recovered after Trump hinted at “ongoing talks with China,” easing investor concerns and pushing the Dow into positive territory, while the S&P 500 and Nasdaq trimmed losses. However, persistent policy uncertainty continues to shake investor confidence. U.S. Treasury bonds are facing their first monthly loss of 2025, and despite a brief rebound, the dollar index recorded a fifth straight weekly decline—its longest losing streak in five years.

In commodities, spot gold opened sharply higher in Asian trading on Monday, climbing to an intraday high of $3,316.50 per ounce. The rally was fueled by escalating geopolitical tensions after Ukraine reportedly struck a Russian airbase. Still, news of upcoming peace talks between Russia and Ukraine in Istanbul injected a wait-and-see mood into the markets. Crude oil extended its decline for a second consecutive session amid rising inventory concerns and the anticipation of talks, hitting a three-week low. Nevertheless, oil prices remain up over 5% for the month of May.

Hot Topics to Watch

● Hedge Funds Pour Into Tech Stocks

According to Goldman Sachs, hedge funds have been net buyers of U.S. information technology stocks for a third straight week—this past week, buying occurred every single day. This comes after 10 out of the previous 12 weeks saw net selling in the sector. Notably, the notional net long purchases this week reached their highest level in over a decade, signaling a sharp shift toward positive sentiment.

● OPEC+ Approves Third Consecutive Output Hike

Over the weekend, OPEC+ reached an agreement to raise oil output by 411,000 barrels per day for the third straight month—matching the size of the last two hikes. While consensus was reached for Julys production increase, some member states expressed reservations. Notably, Russia was among those advocating for a pause in output hikes. In April, OPEC+ tripled its initial target by boosting May output by 411,000 barrels per day, sending oil prices plunging below $60—a four-year low. The group maintained the same output level in June. Interestingly, hedge funds had already been aggressively shorting crude ahead of this announcement.

Key Events to Watch

• 21:45 GMT+2 – U.S. May S&P Global Manufacturing PMI Final

• 22:00 GMT+2 – U.S. May ISM Manufacturing PMI, April Construction Spending MoM

• 01:00 GMT+2 (Overnight) – Fed Chair Jerome Powell delivers opening remarks at an event