Gold Price Dips Amid Trade Optimism; JPMorgan Predicts $4000+ Target
Key Takeaways
- Spot gold fell 0.9% to $3,399.56/ounce due to trade talk and Fed comments.
- JPMorgan suggests gold as a geopolitical hedge, targeting prices above $4000 in 12 months.
- Barrick Mining reported higher earnings, driven by a gold rally and copper market expansion.
- Emerging market central banks are using dollar reserves to buy gold.
- Saylor's Bitcoin fundraising model faces competition from Twenty One Capital's convertible bonds.
Top Stories
Spot gold fell 0.9% amid trade talk, Fed comments.
On May 7, 2025, spot gold in Singapore fell 0.9% to $3,399.56 an ounce due to positive developments in U.S.-China trade talks and Federal Reserve Chair Jerome Powell's indication that the US central bank is not in a rush to adjust interest rates.
JPMorgan: Gold as geopolitical hedge, $4000+ target.
On May 7, 2025, it was reported that JPMorgan suggests using gold as a geopolitical hedge and anticipates a gold price target north of $4000 in 12 months.
Barrick Mining reports higher earnings, expands into copper.
On May 7, 2025, Barrick Mining Corp., a Toronto-based top gold producer, reported higher-than-expected earnings, with production at the top of its guidance range. The company's per-share profit of 35 cents in the first quarter exceeded the Bloomberg consensus by 6 cents, driven by a gold rally and expansion into the copper market.
Dollarization exceeds expectations; central banks buy gold.
On May 7, 2025, Mark Bristow noted that dollarization has progressed further than expected, with emerging market central banks using dollar reserves to buy gold to balance their reserves.
Saylor's Bitcoin fundraising model faces competition.
On May 7, 2025, it was reported that Michael Saylor's fundraising method for his company, Strategy, is facing competition in the Bitcoin market. Twenty One Capital Inc. is preparing to issue its own convertible bonds after merging with Cantor Equity Partners Inc., starting with over 42,000 Bitcoin, valued at approximately $4 billion.
Commodity Corner
China wheat production threatened by hot, dry weather.
Published on May 7, 2025, a government alert indicated that hot and dry weather is threatening wheat production in Henan, China, a major growing region, potentially disrupting output.
China rate cuts impact copper, iron ore prices.
On May 7, 2025, copper prices fell and iron ore price gains decreased after China implemented rate cuts to protect its economy from US tariffs under President Donald Trump's trade policy.
Crude oil prices rise on US-China trade talk.
On May 6 and 7, 2025, reports indicated that crude oil prices increased due to positive signals from US-China trade talks, suggesting a potential de-escalation of trade tensions and tighter supply bets.
Crude oil stockpiles decrease as prices rebound.
On May 7, 2025, OilPrice.com reported that crude oil stockpiles have decreased as oil prices have rebounded.
Oil price decline prompts demand surge, slight recovery.
On May 7, 2025, OilPrice.com reported that an oil price decline led to a surge in demand and a slight price recovery.
Global oil prices plunge to 2021 lows.
On May 7, 2025, it was reported that global oil prices have plunged to their lowest since early 2021, leading to questions about cheaper petrol for Australian motorists after Russia’s invasion of Ukraine.
OPEC+ increases oil production more than expected.
On May 7, 2025, Commonwealth Bank analyst Vivek Dhar reported that OPEC+ decided to increase production in May and June more than expected, tied to punishing OPEC+ members like Iraq and Kazakhstan for exceeding their allocated quota.
US-China trade war threatens commodity demand.
On May 7, 2025, it was reported that demand for commodities is threatened by a trade war between the US and China, sparked by Donald Trump’s new tariff regime, with predictions of lower global growth due to economic slowdowns in the US and China.
Valero refinery fire pressures Bay Area gasoline prices.
On May 7, 2025, a fire at Valero's Benicia refinery left only one gasoline refinery operating in the San Francisco Bay Area, putting pressure on gasoline prices ahead of peak driving season.
Australian petrol price falls vary by city.
On May 7, 2025, it was reported that petrol price falls will vary across Australia, with Perth already seeing lows of 156c per litre and Adelaide retail costs expected to fall towards 160c a litre in May.
Economic Outlook
Trump won't lower China tariffs for trade talks.
On May 7, 2025, Bloomberg reported that President Donald Trump stated he would not lower tariffs on China to initiate trade negotiations.
Fed holds rates; Powell warns tariffs could raise inflation.
On May 6, 2025, Federal Reserve Chair Jerome Powell stated that it remains appropriate to keep interest rates on hold, maintaining the benchmark federal funds rate in a range of 4.25% to 4.5%. On May 7, 2025, Powell also noted that tariffs could potentially lead to increased inflation and unemployment, following a two-day meeting in Washington.
Andersons Inc. shares fall on tariff uncertainty.
On May 7, 2025, shares of crop handler Andersons Inc. fell to their lowest point in over two years due to uncertainty created by tariffs and US port fees impacting trade and negatively affecting first-quarter results.