Central banks of various countries plan to buy more gold, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on June 27

Global Market Review

1. European and American market trends

The three major U.S. stock index futures rose, Dow futures rose 0.30%, S&P 500 futures rose 0.27%, and Nasdaq futures rose 0.31%. The German DAX index rose 0.77%, the UK FTSE 100 index rose 0.56%, the French CAC40 index rose 1.30%, and the European Stoke 50 index rose 0.93%.

2. Market news interpretation

Central banks in various countries plan to buy more gold

⑴ According to Carsten Fritsch, xmmarkets.cnmodity analyst at xmmarkets.cnmerzbank, according to a survey released by the Official Currency and Financial Institutions Forum (OMFIF) a few days ago, one-third of the 75 central banks surveyed plan to buy gold within the next 1-2 years. ⑵In the next ten years, 40% of central banks intend to buy gold. Meanwhile, the dollar is losing its appeal, falling from No. 1 in popularity to No. 7 in a year. 70% of central banks say the U.S. political environment will prevent them from investing in the dollar. In addition to gold, the euro also benefits from it. ⑶ However, it is expected that the US dollar will remain as the main reserve currency in the next decade, with an average expected share of 52%. The euro is expected to share 22%. A few weeks ago, a European Central Bank study showed that the euro ranked third among the most important reserve currencies last year, behind gold. ⑷ A recent survey by the World Gold Council also shows that the central bank plans to buy more gold in the next 12 months. Therefore, the central bank still buys goldAn important factor supporting the price of gold.

U.S. stocks are approaching historical highs, but still face key tests

The S&P 500 index is approaching historical highs, but as the financial report season approaches, the basis of this round of upward trend is facing major tests. Wall Street expects the benchmark index to rise by just 2.8% year-on-year in the second quarter, or the smallest increase in two years, as tariff resistance remains worrying. Estimates xmmarkets.cnpiled by YardeniResearch show that only 6 of the 11 sectors are expected to achieve profit growth, the fewest since the first quarter of 2023. Market observers warn that the index's current valuation is too high and a surge in profits or a sharp cut in interest rates is needed to justify the current level. Technical analysts also believe that unless more sectors join the upside, the index may fall in the xmmarkets.cning months. "There is definitely a risk in the stock market rebound," said Sarah Hunt, chief market strategist at AlpineWoods Capital Investors. "One of the biggest questions right now is whether some sectors will deteriorate more than the acceleration of other sectors."

Harvard University announced an emergency plan for government restrictions on international students

According to the emergency plan released by Harvard Kennedy School on its official website a few days ago, if international students are unable to enter the United States due to visa or entry restrictions, the college will provide them with online courses, or go to the Munk School of Global Affairs and Public Policy, University of Toronto, Canada to continue their studies. According to the emergency plan, freshmen and returnees can choose online courses. The online courses are mainly managed by the Kennedy College faculty. The program also includes up to 3 offline centralized teaching sessions in different cities around the world during the academic year. The program at Munker College is for returning students who can xmmarkets.cnplete their degree programs by taking online and offline courses taught by Harvard and University of Toronto faculty. They will be enrolled as full-time students at Munk College, but their degrees are still awarded by Harvard Kennedy College.

The narrowing of the US-European yield spread has weakened the US dollar

⑴ On June 27, the interest rate spread of the US Treasury bonds and German Treasury bonds narrowed the largest since March, reaching 15 basis points. ⑵ This is one of the key factors in the acceleration of the US dollar decline against the euro. The Fed is gradually becoming more dovish – although the upcoming jobs data are crucial. ⑶ Powell remains patient and the risk of interest rate cuts in July remains. Powell noted that a weak non-farm jobs report could prompt the Fed to act faster than later. ⑷ The euro recorded an 8-game gain - the longest continuous increase since June 2020. Resistance is at 1.1750 (also the 78.6% Fibonacci retracement level of the 2021-2023 decline). Support is at 1.1568 (200-hour moving average) and 1.1450.

The Bank of England may cut interest rates by 75 basis points by the end of 2025

⑴RBC Wealth Management said in its mid-2025 outlook, as inflation in the UK may drop further, the Bank of England may cut interest rates by a total of 75 basis points by the end of 2025. ⑵ UK labor market data appear to be weakening, which increases the likelihood of the Bank of England's further rate cuts. However, sticky inflation and higher wage growth may delay interest rate cuts. LSEG data shows that the market is currently expected to cut interest rates by a total of 51 basis points by the end of 2025.

Russia has not discussed a xmmarkets.cnprehensive ban on gasoline exports

⑴ On June 27, Russian Deputy Prime Minister Alexander Novak said that the government has not discussed a possible xmmarkets.cnprehensive ban on gasoline exports. ⑵ On Thursday, three industry sources said the Russian Federal Antitrust Agency proposed a xmmarkets.cnplete ban on gasoline exports to deal with high fuel prices. ⑶ At present, only some gasoline exports are restricted, and oil xmmarkets.cnpanies still have licenses to sell fuel from Russia to abroad. ⑷Nowak said the restrictions will last until August 31 and there are plans to extend them until October.

Heat waves threaten European crops and power systems

Western Europe will face heat waves that are 10℃ higher than usual in the next few days, threatening crop harvesting and impacting the power system. The temperature in Seville, southern Spain, is expected to reach 42 degrees Celsius this weekend. Temperatures along the Mediterranean coast of France will reach 40 degrees Celsius. The highest temperature in London, UK could reach 35 degrees on Monday. French Electric warned this week that high temperatures could cut output from its Garonne and Rhone nuclear power plants in the basin, and that rising water temperatures would affect the cooling system. The hot weather poses a threat to European corn crops, and industry organization Coceral lowered its output expectations for the 2025-26 season that will begin next month. The market focus shifted from the Middle East to tariff issues

⑴ On June 27, oil prices remained stable as tensions in the Middle East eased. A ceasefire between Israel and Iran is still underway. Meanwhile, nuclear talks between the United States and Iran will resume next week, according to President Trump’s xmmarkets.cnments. However, ING experts Ewa Manthey and Warren Patterson pointed out that there are doubts about the success of these negotiations. ⑵ Assuming the ceasefire agreement continues to be effective, the market may turn its attention to other drivers. U.S. xmmarkets.cnmerce Secretary Howard Lutnik expects the United States to reach a trade deal with ten major trading partners soon. This is constructive for the market before the July 9 reciprocity tariff deadline. ⑶ Another focus is OPEC+’s decision on August production levels. The organization will make a decision on July 6. We believe the organization will continue to actively lift production cuts and announce an additional 411,000 barrels per day supply in August. These increase in supply should ensure that the oil market has a large surplus by the end of the year. This assumes that we do not see another escalation in the Middle East, which will result in supply losses. ⑷ Although tensions between Israel and Iran have eased, the ICE gasoline cracking spread is relatively well supported. The latest inventory data from InsightsGlobal shows that Europe's AmesInventories of refined products in the Terdam-Rotterdam-Antwerp (ARA) region fell by 208,000 tons from last week to 5.51 million tons. The decline was driven by distillates, with gasoline stocks falling 211,000 tons to 1.85 million tons, while jet fuel stocks fell 39,000 tons to 870,000 tons. Inventory of other refined products increased slightly.

German long-term yields rose sharply due to fiscal expenditure plans

⑴ On June 27, Germany's 30-year government bond yields are expected to achieve the largest weekly increase in nearly four months this week, as the market expects the German government to increase borrowings. ⑵ German MPs passed a multi-billion-euro investment plan on Thursday, part of a new government's plan to restore growth to Europe's largest economy. The market expects Germany to increase its bond supply to fund such programs, which will drive long-term bond yields to rise. ⑶ Germany's 30-year government bond yield rose 10 basis points this week, and is expected to achieve its largest weekly increase since March 3. Friday's daily yield rose slightly to 3.094% after hitting a high of 3.111% on Thursday. ⑷ The 10-year yield rose 1 basis point to 2.575%, while the 2-year yield—more sensitive to ECB policy interest rate expectations—had rises 2 basis points to 1.84%, regaining most of the losses in the previous trading day. ⑸ The ECB lowered deposit rates this month, but said it has suspended interest rate cuts after reducing borrowing costs eight times in more than a year. ECB Deputy Governor Luis de Guindos said Friday that the ECB is expected to meet its 2% inflation target, with investors not caring about stronger-than-expected inflation data released earlier by France and Spain. ⑹ Italy's 10-year government bond yield rose 1 basis point to 3.498%. ⑺On the last day of June, Germany will release a series of economic data, including the highly-watched consumer price index. ⑻ Meanwhile, weak U.S. jobs data and speculation about the Fed's faster rate cut—reported that President Trump may soon appoint a replacement for Fed Chairman Powell—strikes U.S. Treasury yields fell on Thursday. On Friday, U.S. Treasury yields rose, with 10-year Treasury yields rising 2 basis points to 4.273%.

Italian producer inflation slowed to a 5-month low

⑴ In May 2025, Italian industrial producer prices rose 1.7% year-on-year, slowing down from the 2.6% increase last month. ⑵ This is the lowest level since December 2024, with price growth in the domestic market slowing to 2.8% from 3.8% in April, and price growth in foreign markets slowing to 0.3% from 1%. ⑶ In the euro zone, prices slowed from 0.8% to 0.5%, while non-euro zone prices fell from 1.0% to 0.0%. ⑷From month-on-month, producer prices fell by 0.7% in May, narrowing from the decline of 2.2% in April.

Rising energy prices drive inflation in France and Spain

⑴The rise in energy prices leads to the inflation rate in France and Spain slightly climbing for the first time this year.Lift. ⑵ According to EU reconciliation data, French consumer prices rose 0.8% year-on-year, while Spain rose 2.2% year-on-year, both higher than the respective 0.6% and 2.0% gains in May, and slightly higher than economists' expectations. ⑶ These data initially show the impact of tensions in the Middle East on prices in major euro zone economies, after which inflation rates in the two countries have been falling or flat. ⑷ French National Bureau of Statistics and Economic Research pointed out that energy prices rebounded, especially oil products prices rose. The Spanish National Statistics Office said that the rise in inflation in Spain was mainly due to rising fuel prices. ⑸ Oil prices soared after Israel attacked Iran, but as hostilities eased, oil prices have fallen. ⑹ European Central Bank President Lagarde said the reduction in oil and gas in the Strait of Hormuz could push up a series of prices and could trigger secondary effects. ⑺The ECB had previously cut interest rates due to cooling inflation, and investors expected the central bank to cut interest rates again later this year.

3. Trends of major currency pairs in the New York Stock Exchange before the New York Stock Exchange

Euro/USD: As of 20:23 Beijing time, the euro/USD rose, and is now at 1.1712, an increase of 0.09%. Before New York, the (Euro-USD) price rose at the recent intraday level, ready to attack the current resistance level of 1.1745, supported by the major bullish trend in the short term, and after reaching an exaggerated oversold level xmmarkets.cnpared to the price action, a positive divergence (RSI) began to form, starting to send positive signals from them, strengthening the bullish track.

GBP/USD: As of 20:23 Beijing time, GBP/USD rose, now at 1.3734, an increase of 0.05%. Before the New York Stock Exchange, (GBPUSD) price rose on the last trading day after the apparent overbought conditions of (RSI) were unloaded in previous trading, with the main bullish trend dominating in the short term and trading along a slash. In addition, positive pressure from trading above the EMA50 continues to exist, strengthening the stability of the bullish track.

Spot gold: As of 20:23 Beijing time, spot gold fell, now at 3277.17, a drop of 1.51%. Before the New York Stock Exchange, the (gold) price continued to fall in the last intraday trading, breaking our early target at the main support level of $3300 until now as a signal to confirm a technical breakthrough, with the dominance of the short-term bearish correction trend and its trading with the baseline, as negative signals of (RSI) continue to appear, despite reaching oversold levels, which may indicate that the price has temporarily slowed down the decline.

Spot silver: As of 20:23 Beijing time, spot silver fell and is now at 35.989, a drop of 1.71%. Before the New York Stock Market, the (silver) price experienced volatility in the last intraday trading, gained positive momentum that helped stabilize the bull trend and successfully got rid of the obvious overbought conditions on the (RSI), especially with the emergence of positive overlap signals, which opened the way for more upside, with the continued manifestation of its dynamic support as its trading above the EMA50 and under the leadership of the major long trends, a declined wedge pattern.

Crude oil market: As of 20:23 Beijing time, U.S. oil rose, now at 65.680, an increase of 0.67%. Before the New York Stock Exchange, (crude oil) continued to fluctuate in a limited sideways consolidation range trading in the last intraday trading, indicating a potential negative technical pattern, xmmarkets.cnpleting a sharp bearish correction trend (bearish flag), which paved the way for a decline to resume after previous volatility.

4. Institutional view

RBC: The Bank of England may cut interest rates by 75 basis points by the end of the year

RBC Wealth Management said in its mid-2025 outlook report that the Bank of England may cut interest rates by 75 basis points by the end of 2025 due to further decline in inflation in the UK. UK labor market data appear to be weakening, which raises the likelihood of a more rate cut by the Bank of England. However, the continued rise in inflation and accelerated wage growth may delay interest rate cuts, which are also the risks.

Dutch International: The US dollar risk balance tends to fall further

Dutch International analyst FrancescoPesole pointed out in the report that the risk balance shows that the US dollar may continue to decline. He said that the upcoming U.S. core personal consumption expenditure price index, speeches from Federal Reserve officials and U.S. tariff trends may trigger a new round of decline in the U.S. dollar. "Any reading below the 0.1% quarter-on-month level will hit the dollar," Pesole said. The market is closely watching the rate cut signals released by Fed officials Kashkali, Williams and Hamack in subsequent speeches.

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