Gold and Oil Hold Steady Ahead of U.S.-China Trade Talks:
Commodity markets saw stability in gold and oil prices amid anticipation
of a new round of trade talks between the United States and China.
This development has raised hopes of easing tensions between the world’s two largest
economies in an increasingly volatile economic and geopolitical environment.

Content
Gold

Oil

Relative Stability in Volatility

Summary

Gold: Stable After Decline… All Eyes on U.S. Bond Auction

Gold prices stabilized after losing around 2% over the previous two sessions,
With the precious metal trading above $3,306 per ounce.
The recent decline was driven by stronger-than-expected U.S. jobs data,
which eased some concerns about a potential slowdown in the U.S. economy.

Senior trade negotiators from the U.S. and China will hold new talks in London on Monday.
The talks will focus on China’s dominance in rare earth metals production,
which could influence investor sentiment toward safe-haven assets.

Investors are also closely watching a highly anticipated U.S. long-term Treasury bond auction on Thursday,
amid growing concerns over U.S. debt levels.
Weak results from the auction could bolster gold prices, which have already gained more than 25% this year.

On the institutional demand front, the People’s Bank of China extended its gold-buying
spree for a seventh consecutive month in May, reinforcing the metal’s bullish momentum.

At 8:28 a.m. in Singapore, spot gold edged down 0.1% to $3,306.48 per ounce.
Silver remained steady, while palladium and platinum saw slight declines.
Meanwhile, the Bloomberg Dollar Spot Index held steady.

Oil: Cautious Optimism Amid Supply Concerns

Oil prices also stabilized after a weekly gain,
with Brent crude trading above $66 per barrel and West Texas Intermediate (WTI) nearing the $65 level.
These prices were supported by hopes of progress in the upcoming U.S.-China trade negotiations in London.

Despite the optimism, the market still faces pressure.
Crude prices have dropped 11% in London since the start of the year,
driven by concerns that prolonged trade tensions could slow global growth and weaken energy demand.
Additionally, the OPEC+ alliance has increased production faster than expected,
raising fears of a potential supply glut in the year’s second half.

Relative Stability in Volatility… Supported by Seasonal Demand

Since mid-May, oil price volatility has eased, with futures moving within a narrow $4 range.
A key volatility index has approached its lowest level since early April.
Meanwhile, the prompt spread in Brent futures (the difference between the nearest two contracts)
has widened in a backwardation pattern, typically a bullish signal.

Gao Mingyou, Chief Energy Analyst at SDIC Essence Futures in Beijing, stated:
“If the London talks continue to send positive signals,
it may ease the negative economic impact of the trade war.
Price factors are improved overall sentiment, rising seasonal demand, and ongoing geopolitical risks.”

Summary

As markets await the outcomes of the U.S.-China trade talks and the U.S. bond auction,
Gold and oil remain cautiously optimistic.
This reflects a delicate balance between economic indicators, geopolitical tensions, and supply-demand dynamics.

Gold and Oil Hold Steady Ahead of U.S.-China Trade Talks

Gold and Oil Hold Steady Ahead of U.S.-China Trade Talks

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