Starting the New Week
We continue to observe volatile price movements in global markets. Last week, precious metals experienced a strong upward rally; however, the new week has opened with a slightly bearish tone, and initial pricing has reflected this sentiment.
?? Tariff Policy
In recent weeks of the trade wars, the U.S. reduced tariffs on Chinese goods from 145% to 30% over a 90-day period, while China lowered its tariffs on U.S. products from 125% to 10%, boosting market risk appetite. However, last Friday, tariff threats resurfaced, this time targeting the European Union. Former President Trump announced plans to impose a 50% tariff on EU goods effective June 1, 2025. This statement reignited risk perceptions in the markets. Following a meeting with European Commission President Ursula von der Leyen on May 25, 2025, the tariff implementation was postponed to July 9, 2025.
?? Macroeconomic Outlook
The inflation figure announced last week from the Eurozone stood at 2.2%. Accordingly, expectations persist for the European Central Bank (ECB) to continue its interest rate cut cycle. The impact of tariff packages may reflect as inflationary pressure on macroeconomic indicators in the coming period.
In the U.S., the Services PMI came in significantly above expectations at 52.3, which was interpreted as a key indicator suggesting the probability of a recession remains low for now.
This week, key economic data from the U.S. will continue to be in the spotlight. On Tuesday, the Conference Board Consumer Confidence Index will be released; on Wednesday, the FOMC Meeting Minutes; on Thursday, Q1 GDP data; and on Friday, the Core PCE Price Index will be published.
Especially the GDP and PCE figures could be decisive for the Fed’s interest rate policy, leading to heightened volatility in the markets.
?? Geopolitical Outlook
We are going through a highly critical period in terms of geopolitical developments. No concrete agreement was reached in the direct Russia-Ukraine ceasefire talks held in Istanbul on May 15, 2025. Additionally, reports of increased attacks on the frontlines have supported the rise in gold prices.
In the Middle East, Israel’s escalated attacks continue. Market participants are closely watching expectations regarding potential intervention by Iran.
Gold started the year 2025 at $2,625 per ounce and reached record levels, closing Q1 at $3,125. Technically, price levels above $3,230 continue to support a positive outlook, while expectations of interest rate cuts also keep demand for precious metals alive. However, with some clarity in tariff uncertainties, a technical pullback toward $3,285 may occur in gold prices.
?? Local Market Overview
In Turkey, the price of gram gold in the Grand Bazaar closed last week at 4,210 TRY. This week, prices have opened lower around 4,180 TRY. Expectations for a rate cut by the Central Bank of Turkey in June and the USD/TRY rate surpassing 39.00 have supported gram gold prices on a global scale.
Premiums on an ounce basis in Turkey have risen up to $20. On a kilogram basis, the difference with the London market has reached around $650. This week, the market’s focus will remain on U.S. PCE data, tariff developments, and geopolitical news flow.
According to the CME FedWatch Tool, the probability of a 25-basis-point rate cut by the Fed in July is currently priced at around 24%.
Disclaimer: The information, comments, and recommendations provided herein do not constitute investment advice. Investment advisory services are provided exclusively under personalized conditions, taking into account the specific risk and return preferences of individuals. The content, opinions, and recommendations presented here are general in nature and not intended to be directive. They may not be suitable for your financial situation, risk tolerance, or expectations. Therefore, investment decisions made solely on this basis may not yield suitable outcomes.
