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02.06.2025 09:45 AM
Throughout June, the Markets Will Be as Intense as During the Early Months of Trump's Presidency (there is a likelihood of a continued rise in the price of gold and a fall in USD/JPY)

The challenging month of May was experienced differently across global markets, but the main beneficiaries were stocks, which gained momentum from late April and extended their rally into May—something that cannot be said about the dollar or crude oil prices.

Indeed, Trump's maneuvering both in the external geopolitical arena and the internal economic landscape led investors—especially in the U.S.—to practically stop reacting properly to the release of economic data. However, this data reveals significant changes in the U.S. economy, which should eventually force the Federal Reserve to resume cutting interest rates. Yes, the Fed currently distances itself from this idea, citing the uncertain consequences of presidential actions, but it won't be able to ignore falling inflation and GDP for long and will have to act.

Markets remain under the immense pressure of Trump's push to restore the U.S. to "greatness," as he sees it. His model of economic recovery is unconventional and almost entirely forceful, directly impacting global trade and, consequently, production. He constantly maneuvers, trying to deceive some and intimidate others. He has had some success with smaller trading partners, but the main opponent—China—is holding firm, which led to a three-month delay in imposing draconian tariffs. In my opinion, I don't think they will be introduced at all because doing so would effectively eliminate direct trade between the countries. Additionally, gray imports from China would continue to flood into the U.S., undermining the local economy.

Stock markets gained support last month due to the apparent truce between Washington and Beijing and the growing understanding that the central bank won't ignore worsening national economic conditions and steadily declining inflation. This suggests a rate cut is inevitable and likely around the corner. Naturally, this will boost demand for stocks. However, the sustainability of that demand will largely depend on tariff developments.

The dollar's dynamics correlate closely with the 47th president's statements and the degree of threat he poses toward America's trading partners. Any negative developments will pressure the dollar while rising Treasury yields will only intensify its decline. This could turn into a vertical collapse after breaking the strong ICE index support level at 98 points, potentially falling toward 90 points in the future.

Overall, observing the broader picture, we can say that U.S. policy under President Trump will continue to unsettle the markets. A brief easing of pressure on trading partners could trigger localized speculative buying of stocks, cryptocurrencies, and commodities in hopes that things will finally settle down. However, subsequent flare-ups will negatively impact these asset classes and support the dollar and gold prices as safe-haven assets during this first summer month.

Forecast of the Day:

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GOLD

Gold prices are receiving support from new negative news regarding the standoff between the U.S. and China. Technically, the price has broken above the resistance line and the 3335.00 level, exiting the short-term downtrend it had been in since late April. A consolidation above this level opens the way for growth toward 3390.00. The entry point for buying could be around 3347.13.

USD/JPY

The pair dropped below the 143.50 support level due to negative dollar news related to inflation and the ongoing U.S.-China trade battles. This situation may lead the pair to decline first toward 142.35 and then to 141.95. The entry point for selling could be around 143.08.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
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