Gold Plunges Weekly as Geopolitical De-escalation Triggers Sharp Oil Selloff

Market Overview

U.S. equities delivered an exceptionally strong performance last week, with technology stocks once again acting as the markets stabilizing force. Both the S&P 500 and Nasdaq extended their winning streak to five consecutive weeks, simultaneously setting fresh all-time highs and marking the longest weekly rally in a year.

However, late-session sentiment weakened after former President Donald Trump publicly expressed dissatisfaction with a newly proposed framework involving Iran, triggering a sharp pullback in the Dow Jones Industrial Average.

In early Monday Asian trading, geopolitical risk premium unwound rapidly after the U.S. announced the launch of the “Freedom Initiative” to guide vessels stranded in the Strait of Hormuz to safe passage. As a result, oil prices dropped sharply, with WTI crude briefly falling below the $100 per barrel threshold.

■ Tech Earnings & AI Computing Power

Apple shares rose more than 3% on the back of strong earnings results. The semiconductor sector experienced a dramatic intraday reversal, with SanDisk plunging 4% at the open before rebounding to close over 8% higher.

Software stocks posted explosive gains, as Atlassian and Twilio surged approximately 30% and 20%, respectively. Oracle climbed 6.5% after joining a Pentagon-backed AI initiative.

In contrast, Spirit Airlines collapsed as much as 70% intraday on reports of a potential operational shutdown, ultimately closing down 25%.

■ Energy & Precious Metals

Geopolitical developments remained the primary driver of price action. Headlines related to Iran triggered a more than 5% intraday drop in WTI crude, while Brent crude fell over 2% during early Asian trading, reflecting a rapid unwinding of accumulated war risk premium.

Spot gold declined more than 1% intraday before recovering on renewed safe-haven demand. Nevertheless, on a weekly basis, gold still posted a loss exceeding 2.5%, while silver dropped more than 6%.

■ Fixed Income & FX Markets

U.S. Treasury yields experienced a sharp intraday drop following reports of a potential Iran negotiation framework.

The U.S. Dollar Index exhibited heightened volatility, briefly falling below the 98 level to a two-week low before staging a V-shaped rebound.

The Japanese yen recorded its largest weekly gain in over two months. Meanwhile, offshore RMB gave back earlier gains after breaking above the 6.83 level, as the dollar rebounded.

■ Cryptocurrencies

Bitcoin showed notable resilience, briefly approaching the $79,000 level and rebounding more than 3% from its intraday low. This suggests that amid rising global geopolitical uncertainty, “digital gold” continues to outperform physical gold in terms of safe-haven appeal.

Key Developments to Watch● Three Fed Officials Dissented at April FOMC Meeting

On Friday, Minneapolis Fed President Neel Kashkari, Dallas Fed President Lorie Logan, and Cleveland Fed President Beth Hammack each issued statements explaining their dissenting votes at the April FOMC meeting.

While all three officials agreed with the decision to hold rates steady, they expressed concerns regarding the wording of the policy statement, with broadly similar reasoning behind their dissents.

● U.S. April ISM Manufacturing PMI Remains in Expansion

The U.S. ISM Manufacturing PMI for April came in at 52.7, slightly below the expected 53.2 but unchanged from the previous reading.

The Prices Paid Index rose for a fourth consecutive month to 84.6, marking a four-year high (vs. forecast of 80 and prior 78.3).

The Employment Index declined to 46.4, missing expectations of 48.8 and falling to a four-month low.

Key Data to Monitor (GMT+8)

20:30 (US)

• Initial Jobless Claims (week ending April 25)

• Core PCE Price Index (YoY, March)

• Personal Spending (MoM, March)

• Employment Cost Index (QoQ, Q1)

• Real GDP (Annualized QoQ, Q1 Preliminary)

• Real Personal Consumption Expenditures (QoQ, Q1 Preliminary)

• Core PCE Price Index (Annualized QoQ, Q1 Preliminary)

• Core PCE Price Index (MoM, March)

16:00 (EU)

• Eurozone Manufacturing PMI (Final, April)

• Eurozone Sentix Investor Confidence Index (May)

22:00 (US)

• Factory Orders (MoM, March)