Overnight, COMEX gold showed strength but weakened after the morning open, with market sentiment turning cautious amid fluctuating bullish and bearish factors.
On the macro front, the preliminary U.S. composite PMI for May registered 51.7, unchanged from April, indicating a continued mild expansion in overall business activity. However, a significant divergence emerged structurally. The manufacturing PMI unexpectedly rose to 55.3, hitting a 48-month high and demonstrating strong resilience in the sector. In contrast, the services PMI stood at just 50.9, teetering on the edge of stagnation and signaling a weakening of consumer momentum in domestic demand. This divergence between manufacturing and services reflects underlying economic contradictions amid tariff policy impacts, further fueling market concerns about a potential stagflation path.
Geopolitically, the U.S.-Iran negotiation landscape has become volatile. U.S. Secretary of State Rubio expressed caution regarding reaching an agreement, using measured language. However, reports from the Middle East indicate significant progress, with Iran stating it is responding to the negotiation text sent by the U.S., suggesting a narrowing of differences. Mediated by Pakistan, the agreement text is reportedly undergoing "final polishing." This mix of cool and warm news keeps market trading logic in flux, with uncertainty persisting.
In terms of events, the most closely watched development tonight (Beijing time) is Kevin Warsh's formal swearing-in as the 17th Chair of the Federal Reserve at the White House, with Trump personally presiding over the high-profile ceremony. The market is highly attentive to his first official speech. Previously, Warsh, under the banner of "reshaping the Fed," has advocated for maintaining the Fed's independence and advancing balance sheet reduction, leaning slightly hawkish. Against the backdrop of persistent inflationary pressures, if his initial remarks tilt hawkish, it could further suppress market expectations for rate cuts, negatively impacting gold. Conversely, if his tone is more dovish, gold may find short-term stabilization. The market is likely to proceed cautiously, awaiting Warsh's "debut."
In summary, with structural divergence in macro data, unclear policy stance from the new Fed Chair, and fluctuating progress in U.S.-Iran negotiations, these three variables are all in a phase of ambiguous signals. This makes it difficult for the market to form a clear directional consensus, and gold prices may maintain a volatile pattern in the short term. Strategically, it is advisable for investors to continue lowering expectations for gold prices in the first half of the year, maintaining a strategy of buying on dips. However, positions should not be overly heavy. Adjustments can be considered after Warsh's stance becomes clear and the outcome of U.S.-Iran negotiations is more certain.
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