China’s big move into gold is turning heads as the gold price disconnects from the franc’s movement, as these pairs usually go hand in hand as a safe haven buying activity. According to WGC, the PBoC announced a 12t gold addition in February, extending its buying spree to 16 months and lifting the total to 2,257t. Meanwhile, the West has been selling off on the notion of higher bond yields. But as the US might lower rates to cool the debt market, more Westerners could have already joined the gold rush, as seen in its sky-high valuation since early March. It’s a simple story of supply and demand, but it’s got the world watching as the scarcity of aurum holds its value as it has for centuries.


The S&P 500 declined on Monday as higher Treasury yields pushed the dollar higher, although there is an expansion in manufacturing activity. Notable stock movements included Microsoft rising on plans to offer Teams as a standalone product, Alphabet gaining after addressing AI disruption in its ad business, and Micron on higher demand forecast by Bank of America. However, Tesla increased Model Y prices, citing lower demand, while Xiaomi shares skyrocketed after unveiling its new electric vehicle lineup.


Gold prices remained steady, even though U.S. Treasury yields gained, following a record high on Monday. Spot gold closed at $2,251.24 per ounce after reaching an all-time peak of $2,265.61, a significant pullback as higher U.S. 10-year Treasury yields decreased the attractiveness of zero-yield gold, although traders are indicating a 62% likelihood of rate cuts by the Fed in June, reducing the opportunity cost of holding gold.


Crude oil prices gained around 1% on Monday, with WTI reaching a five-month high. The price extended its rally, supported by signs of demand expansion in the U.S. and China, as well as a widening conflict in the Middle East that saw Israeli strikes on the Iran consulate in Syria and a refugee camp. Higher compliance with production cuts from OPEC+ members, along with continuous geopolitical risks, could potentially drive oil prices towards $90 in the near term.


The U.S. dollar strengthened on unexpected growth in U.S. manufacturing data and Treasury yields, which gained about 2.5%, with 10-year yields at 4.321%. The yen grew slightly against the dollar as Japan's finance minister warned about potential currency intervention to stabilise the yen's movements. Expectations for a June interest rate cut was cut back, according to futures markets, while bitcoin prices pulled back to below $70k after failing to sustain momentum.