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Gold prices are poised to rise to $3,750 per ounce by the fourth quarter, driven by rising safe-haven demand and a weakening U.S. dollar, according to a new report from Commonwealth Bank of Australia (CBA).

In a note from Vivek Dhar, director of mining and energy commodities research at CBA, the bank highlighted geopolitical tensions—particularly the risk of military escalation involving Iran—as a key upside risk for bullion. “The threat of military strikes against Iran cannot be ruled out, which raises the stakes if U.S.-Iran talks remain deadlocked,” Dhar said.

Gold’s traditional role as a safe haven may become even more pronounced, the report suggests, especially as it has recently outperformed both the U.S. dollar and U.S. Treasurys amid rising American tariffs.

CBA also expects the dollar to gradually weaken through the second half of 2025 and into 2026, further supporting the bullish gold outlook.

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China on the bid again today?

This article was written by Eamonn Sheridan at www.forexlive.com.

New Zealand has revised its fiscal outlook, projecting a smaller budget deficit and adjusting bond issuance plans as it navigates a still-challenging economic environment.

On Thursday, the government forecast a budget deficit of NZ$14.74 billion for the fiscal year ending June 30, 2025, a notable improvement from the NZ$17.32 billion shortfall projected in its December half-year update. The narrowing reflects improved revenue expectations and a slightly firmer economic backdrop.

At the same time, net debt is now forecast to peak at 46% of GDP in 2027/28, slightly later but marginally lower than the 46.5% peak in 2026/27 projected last December. The shift suggests a more measured fiscal consolidation path.

The New Zealand Debt Management Office (NZDMO) also trimmed its near-term bond issuance plans. For the 2025/26 fiscal year, gross bond issuance is expected to total NZ$38 billion, down from NZ$40 billion projected in the December update.

However, the government raised its total bond issuance forecast for the four-year period to June 2029 to NZ$132 billion, up from NZ$128 billion. The revision reflects longer-term funding needs amid a broader economic transition and continued infrastructure investment.

Despite the moderated borrowing profile in the near term, officials signaled a continued commitment to fiscal discipline and longer-term debt sustainability.

This article was written by Eamonn Sheridan at www.forexlive.com.

China and 10 ASEAN countries have concluded negotiations on CAFTA Version 3.0, a major upgrade of their free trade agreement.

• The deal introduces nine new chapters focused on areas like the digital economy, green economy, and supply chain connectivity, aiming to deepen regional integration and economic cooperation.
• Officials say CAFTA 3.0 will enhance trade stability, foster industrial and technological collaboration, and provide institutional support for efficient and secure supply chains.
• With bilateral trade nearing USD 1 trillion in 2024, both sides see this as a key step toward high-quality development and a strong signal in favour of open, rule-based multilateral trade.
• Formal signing of the agreement is expected by the end of 2025.

Link here for more.

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China + ASEAN Member States:

• Brunei Darussalam
• Cambodia
• Indonesia
• Laos
• Malaysia
• Myanmar
• Philippines
• Singapore
• Thailand
• Vietnam

These eleven countries form the CAFTA 3.0, an upgraded free trade agreement aiming to deepen economic integration between China and the ASEAN bloc.

This article was written by Eamonn Sheridan at www.forexlive.com.

WSJ (gated) reports that Trump told EU heads in private Putin isn’t ready to end war.

• On a call Monday, President Trump told European leaders that Russian President Vladimir Putin isn’t ready to end the war because he thinks he is winning, according to three people familiar with the conversation.

Key points in the Journal article:

• Trump told European leaders that Putin thinks he’s winning the war and isn’t ready for peace—a view they already held but hadn’t heard from Trump.

• Trump shifted from suggesting sanctions to proposing lower-level talks at the Vatican between Russia and Ukraine.

• Europeans sought to clarify Putin’s stance for Trump, underscoring their need to support Ukraine.

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan Jibun Bank PMI Manufacturing (preliminary) for May 2025 49.0

• prior 48.7
• if confirmed in the final at 49.0 it’d be the 11th consecutive month of contraction for the sector

Some points from the manufacturing PMI:

• factory output fell at a quicker pace than in April
• decreases in new orders and new export business, but at a slower rate than in April
• input costs for factories rose at the slowest rate in 14 months
• output price inflation was down to the lowest in nearly four years

Services 50.8

• prior 52.4
• slower increases in new business, export business and employment

Composite 49.8 in May

• prior 51.2

Earlier today were very encouraging data from Japan:

• Japan machinery orders surge, +13% m/m (expected -1.6%)

This article was written by Eamonn Sheridan at www.forexlive.com.

Singapore Q1 GDP +3.9% y/y vs Reuters poll +3.6%

• expected 3.6%, prior 3.8%

Singapore Q1 GDP -0.6% q/q at seasonally adjusted rate

• expected -1.0%, prior -0.8%

Singapore MTI maintains 2025 GDP growth forecast at 0.0% to +2.0%

Singapore MTI says despite recent positive developments, global economic outlook remains clouded by uncertainty, with risks tilted to downside

• says Singapore’s external demand outlook for rest of year improved slightly compared to April
• says growth of outward-oriented sectors expected to slow over course of year
• says slowdown in manufacturing sector, weaker global trade, expected to weigh on trade-related services sectors in 2025
• says growth in finance, insurance sector could be weighed down by episodes of weaker trading activity in 2025

This article was written by Eamonn Sheridan at www.forexlive.com.

KCNA info converyed via Reuters:

• Accident occured during launch of North Korean warship
• Leader Kim Jong Un was overseeing launch ceremony when accident occured
• Kim says accident was unacceptable, a result of negligence and irresponsibility
• Ordered restoration of the vessel before the June party meeting
• North Korea says it will convene ruling party Central Committee meeting in late June

This article was written by Eamonn Sheridan at www.forexlive.com.

March 2025 machine orders data from Japan sky rocket higher.

+13.4% m/m

• expected -1.6%, prior 4.3%

+8.4% y/y

• expected -2.2%, prior 1.5%

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These data are a leading indicator of capital spending in the coming six to nine months. It’s a volatile data set.

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan finance minister Kato:

• Told G7 meeting that US tariffs are creating uncertainties
• Discussed overcapacity with G7
• Told G7 unsustainable macro-economic imbalance of some countries behind trade imbalance
• Told G7 each country must take steps to boost domestic demand, cut fiscal deficit
• Talk with Bessent lasted 30 minutes
• Met with U.S. Treasury Secretary Bessent today
• Told Bessent that US tariffs are regrettable
• Agreed with Bessent that FX rates should be set by markets
• Reaffirmed excessive volatility in currency moves has adverse impacts on economic and financial stability
• No talk on FX levels

This article was written by Eamonn Sheridan at www.forexlive.com.

Trump

• Giving very serious consideration to bringing Fannie Mae and Freddie Mac public.
• Will be making a decision in near future

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Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) are U.S. government-sponsored enterprises (GSEs) that play a central role in the housing finance system. They don’t lend money directly to homebuyers but instead buy mortgages from banks and other lenders, providing those institutions with fresh capital to issue more home loans. By packaging these mortgages into securities and guaranteeing them against default, Fannie and Freddie help make housing credit more widely available and affordable.

They were placed under government conservatorship during the 2008 financial crisis to prevent their collapse, and they remain under federal control today.

This article was written by Eamonn Sheridan at www.forexlive.com.

Australian preliminary PMI from S&P Global for May 2025:

Manufacturing 51.7

• prior 51.7

Services 50.5

• prior 51.0

Composite 50.6

• prior 51.0

Two of three slip back a little but all three remain in expansion. If there has been a ‘tariff hit’ its not hefty.

This article was written by Eamonn Sheridan at www.forexlive.com.

The Wall Street Journal with the report:

• Walmart plans to cut around 1,500 jobs in a restructuring aimed at trimming its expenses and speeding up decision-making.
• Walmart and other retailers have been cutting costs, putting pressure on suppliers, shifting production to other countries and increasing prices to offset the cost of tariffs.
• Last week, Walmart said that it would raise some prices because of tariffs, prompting President Trump to criticize the company.

The Journal is gated, link here for more if you can access it.

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Trump’s blast from last week. Government overseeing private enterprise has been used without success in many communist countries.

This article was written by Eamonn Sheridan at www.forexlive.com.