Financial markets witnessed significant shifts this past week, as key economic indicators and diplomatic dialogues influenced the performance of major currencies and commodities. The U.S. dollar experienced a notable rebound, while gold prices softened despite geopolitical uncertainties, and crude oil achieved multi-week highs driven by supply dynamics and renewed trade optimism.
The U.S. Dollar’s Resurgence
The U.S. dollar reversed its recent slide, propelled by a robust employment report that exceeded market expectations. In May, the economy added 139,000 new jobs, surpassing the anticipated 125,000. This positive data bolstered the dollar, with the WSJ Dollar Index climbing 0.4% to 95.59. Consequently, the euro and the British pound faced downward pressure, closing at $1.1388 and $1.3528 against the dollar, respectively.
Analysts from Wealth Club pointed out that the combination of a stable unemployment rate at 4.2% and rising wages has diminished expectations for imminent interest rate reductions by the Federal Reserve. This outlook generally lends support to the dollar.
Gold’s Retreat Amidst Outflows
Despite a backdrop of ongoing tariff tensions and an uncertain geopolitical climate, gold prices saw a decline. The precious metal fell 0.8% to 3,322.70 dollars per ounce. This dip was primarily attributed to substantial outflows from exchange-traded funds (ETFs), which largely offset any demand for gold as a safe-haven asset.
According to the World Gold Council, the month was “virtually flat,” reflecting a balancing act between the demand generated by tariff-related anxieties and the impact of institutional investment withdrawals. However, the metal still managed to record a 1% weekly gain, partly supported by diplomatic signals between United States President Donald Trump and Chinese President Xi Jinping, whose discussions aimed at reigniting trade negotiations offered a glimmer of optimism.
Crude Oil Reaches Weekly Highs
The oil market experienced a strong upward trend, marking its second consecutive week of gains. West Texas Intermediate (WTI) crude futures closed at 64.58 dollars, a substantial 6.2% increase, while Brent crude settled at 66.47 dollars, up 5.9%.
This surge was influenced by two key factors. Firstly, a reported decrease in the number of active oil rigs in the U.S., which fell by 9 to 442, according to Baker Hughes. This reduction in drilling activity fueled perceptions of potentially lower future supply. Secondly, ongoing dialogue between the U.S. and China generated optimism for a potential breakthrough in trade relations. Furthermore, seasonal demand continues to provide a supportive foundation for current prices.
| Asset | Movement | Closing Price (Approx.) | Key Factor(s) |
|---|---|---|---|
| U.S. Dollar | Up 0.4% (WSJ Dollar Index) | WSJ Index: 95.59 | Strong job growth, reduced Fed cut expectations |
| Euro | Down | $1.1388 | Stronger U.S. Dollar |
| British Pound | Down | $1.3528 | Stronger U.S. Dollar |
| Gold | Down 0.8% (weekly gain 1%) | $3,322.70/ounce | ETF outflows, trade talks |
| WTI Crude Oil | Up 6.2% | $64.58/barrel | Lower U.S. rig count, trade optimism |
| Brent Crude Oil | Up 5.9% | $66.47/barrel | Lower U.S. rig count, trade optimism |
David Thompson earned his MBA from the Wharton School and spent five years managing multi-million-dollar portfolios at a leading asset management firm. He now applies that hands-on investment expertise to his writing, offering practical strategies on portfolio diversification, risk management, and long-term wealth building.