Gold surged during the 12-day war with Iran last year and then gave up its gains when a ceasefire was announced. But, two weeks into the latest conflict, its price remains largely unmoved.

Silver prices steadied into the end of the week, with the metal recovering modestly after the sharp swings seen earlier in March.

Silver is no longer just a “precious metal”, it has become the primary financial barometer for global instability.

Despite recent outflows, expert says decade-long gold surge still has legs.

A month ago, Caixin reported that as Trump's erratic tariff policies last month triggered a wave of selling of US assets, a new wave of "de-dollarization" was gaining momentum in Asia. Now, an increasing number of market participants are clearly unable to ignore the "rise" of this trend... On May 26, ASEAN committed in its newly released "Strategic Plan for the ASEAN Economic Community 2026-2030" to promoting the use of local currencies in trade and investment, and proposed measures such as expanding the use of local currencies for settlement and strengthening regional payment connectivity to mitigate the impact of exchange rate fluctuations. Lin Li, Head of Asia Global Markets Research at Mitsubishi UFJ Financial Group (MUFG), told the media that as Asian economies seek to reduce their reliance on the US dollar, particularly by using their own currencies as a medium of exchange to reduce foreign exchange risks, the trend of de-dollarization is strengthening. Although de-dollarization itself is not a new phenomenon, recent developments may have undergone a qualitative change. Investors and officials are beginning to recognize that, even if the US dollar has not been openly weaponized in trade negotiations, it can and has been used as a "bargaining chip." Mitul Kotecha, Head of Asia FX and Emerging Markets Macro Strategy at Barclays, said that this has prompted a reevaluation of investment portfolios that were previously heavily overweight in the US dollar. "Countries are focusing on the fact that the US dollar has been and can be used as a weapon in trade, direct sanctions, and other areas... I think this is the real change over the past few months," he said. Two Forces Accelerating the Evolution A recent report by Bank of America pointed out that the trend of ASEAN moving away from the US dollar is intensifying, driven by two main forces: ① Individuals and businesses are gradually starting to convert their US dollar savings back into local currencies; ② Large investors are beginning to hedge foreign investments more actively. Abhay Gupta, Asia Fixed Income and FX Strategist at Bank of America, said, "The de-dollarization process in ASEAN may accelerate, primarily through the conversion of foreign exchange deposits accumulated since 2022." In addition to ASEAN, BRICS countries, including India and China, are also actively developing and promoting their own payment systems to bypass traditional Western payment systems like SWIFT and reduce reliance on the US dollar. China has also been promoting the use of the yuan for bilateral trade settlement. Barclays' Kotecha pointed out that de-dollarization is a "continuous, slow process," but the gradual decline of the US dollar's status can be witnessed in both central bank reserve shares and trade settlement shares. He specifically mentioned the substantial overseas assets held by countries such as Singapore, South Korea, and China, which have significant potential for repatriating foreign exchange earnings. Andy Ji, Asia FX and Rates Analyst at ITC Markets, shares this sentiment. He points out that economies most reliant on trade will experience a more pronounced decline in demand for the US dollar. He specifically mentioned the economies within the 10+3 cooperation mechanism, which includes China, Japan, South Korea, and the 10 ASEAN member states. As of November last year, over 80% of trade in this region was still denominated in US dollars. Nomura Securities has observed a new trend: Asian investors are strengthening their hedging against US dollar exposure. Nomura notes that as Asian investors increasingly hedge against US dollar risks, a trend of de-dollarization is also emerging. Foreign exchange hedging refers to investors protecting themselves from significant currency value fluctuations by locking in exchange rates to avoid losses in the event of unexpected weakening or strengthening of the US dollar. Craig Chan, Global Head of FX Strategy at Nomura Securities, stated, "Some of the currencies that have recently performed strongly include the Japanese yen, South Korean won, and New Taiwan dollar." He observed that a considerable portion of foreign exchange hedging transactions come from institutional investors such as life insurance companies, pension funds, and hedge funds. According to Nomura Securities, the hedging ratio of Japanese life insurance companies was originally around 44%. In April and May, this figure rose to around 48%. Nomura Securities estimates that the hedging ratio of life insurance companies in Taiwan, China, is around 70%. When investors hedge against US dollar risks, they sell US dollars and buy local or other currencies, which increases demand for the US dollar and causes non-US currencies to appreciate against the US dollar. Is a structural shift underway? Clearly, the rise of this de-dollarization trend has once again raised a "perennial" question: Is this merely a phase of temporary reduction in US dollar holdings, or a more drastic structural shift? In fact, although similar shifts are more pronounced in Asia, the world is actually reducing its reliance on the US dollar—the share of the US dollar in global foreign exchange reserves has declined from over 70% in 2000 to 57.8% in 2024. Recently, due to uncertainties surrounding a series of decisions by the Trump administration, the US dollar has experienced a significant decline this year, particularly in April. Since the beginning of this year, the US dollar index has fallen by more than 8%, marking the worst performance in the first five months of the year in history, according to Dow Jones Market Data. However, some industry observers also state that despite many countries reducing their reliance on the US dollar, it remains challenging to replace the US dollar as the primary reserve currency. Cedric Chehab, chief economist at BMI, said that, for now, this may still be merely cyclical. He pointed out that it could only transform into a structural trend if the US implements sanctions more aggressively, prompting central banks to be wary of holding excessive US dollars, or if governments mandate pension funds to increase their holdings of domestic assets. Of course, the first threat mentioned by Chehab may have already occurred to some extent. What undoubtedly concerns many foreign entities the most is undoubtedly "Clause 899" in Trump's latest tax reform bill. If approved by Congress, this clause would allow the US to impose additional taxes on companies and investors from countries it deems to be implementing punitive tax policies. George Saravelos, global head of FX research at Deutsche Bank, said that this would mark the formal incorporation of the weaponization of US capital markets into law. Francesco Pesole, FX strategist at ING, pointed out that "Trump's erratic trade policy decisions and the significant depreciation of the US dollar may be encouraging a faster shift towards other currencies." Peter Kinsella, global head of FX strategy at Union Bancaire Privée, reminded people to distinguish between the weakening of the US dollar and de-dollarization. "The US dollar has gone through multiple cycles of depreciation, yet its hegemony as a reserve currency remains unchanged," he added. Even with reduced exposure, the US dollar's core position in trade invoicing remains solid—over half of global trade was still settled in US dollars in April this year. However, Kinsella also mentioned that, "the long-term declining trend in the US dollar's status as a reserve asset will continue, and I firmly believe that gold will be the biggest beneficiary." According to a report released by the European Central Bank on Wednesday, gold accounted for 20% of global official reserves in 2024, making it the second-largest reserve asset globally, second only to the US dollar at 46%.

On Friday, Eastern Time, the US May non-farm payrolls data came in better than expected, easing market concerns about an economic slowdown and triggering a sharp rally in US stocks. All three major indices rose more than 1%, with the S&P 500 closing above 6,000 for the first time since February, though still more than 2% below its all-time high set in February. At the close, the Dow Jones Industrial Average rose 1.05% to 42,762.87; the S&P 500 rose 1.03% to 6,000.36; and the Nasdaq Composite rose 1.20% to 19,529.95. (Minute-by-minute charts of the three major indices, source: TradingView) All three major indices posted gains for the week, with the S&P 500 up 1.5%, the Dow up 1.2%, and the Nasdaq up 2.2%. Thanks to the recent rebound, all three major indices have turned positive for the year. Data released by the US Bureau of Labor Statistics on Friday showed that non-farm payrolls increased by 139,000 in May, a slowdown from the previous month's figure but higher than market expectations. The unemployment rate remained unchanged at 4.2%. The jobs report was released as other data suggested that US job growth may be slowing amid uncertainty over trade policy. The latest non-farm payrolls data provided a basis for the US Fed to maintain interest rates unchanged this summer. As a result, traders lowered their expectations for interest rate cuts in the coming months. "The non-farm payrolls data came in better than expected, suggesting that the labour market remains healthy despite a slowing growth trend," said Anthony Saglimbene, chief market strategist at Ameriprise. "There is still uncertainty about the inflationary impact of tariffs, which are expected to start showing up in economic data this summer. The market is now waiting to see the real impact of these factors on growth and earnings in the coming quarters. We're essentially back to where we were in February," Saglimbene said. Circle, the "first stablecoin stock," extended its rally, closing up more than 29% on its second day of trading, with cumulative gains of over 247% in two trading days. Performance of Popular Stocks Major tech stocks rose across the board, with Apple up 1.64%, Microsoft up 0.58%, Nvidia up 1.24%, Google up 3.25%, Amazon up 2.72%, Meta up 1.91%, and Tesla up 3.67%. Among popular Chinese ADRs, gains and losses were mixed. The Nasdaq Golden Dragon China Index fell 0.06%, with Alibaba down 0.48%, JD.com up 0.09%, Pinduoduo up 1.28%, NIO up 0.28%, XPeng Motors down 2.40%, Li Auto up 0.85%, Bilibili up 1.46%, Baidu down 0.05%, NetEase down 1.25%, and Tencent Music up 1.01%. Company News [Tesla Produces 8 Millionth EV at Giga Berlin] On June 6, Tesla announced that its 8 millionth electric vehicle (EV) rolled off the production line at Giga Berlin, with the vehicle being a Model Y. [Lululemon Plunges 20%, Lowers Full-Year Profit Forecast] Athletic apparel brand Lululemon (LULU) closed down 19.80% on Friday, marking its worst single-day performance since March 2020. Lululemon had previously lowered its full-year outlook, projecting Q2 net revenue to be between $2.54 billion and $2.56 billion, falling short of analysts' consensus estimate of $2.57 billion. [Virgin Galactic Announces Potential Resumption of Commercial Spaceflight Services] Virgin Galactic's shares surged over 16% intraday but closed up 2.88%. The company announced that its commercial spaceflight services are expected to resume, signaling a new phase in the restart of its space tourism business. [Fitch Upgrades Uber's Rating to BBB+] Fitch Ratings upgraded Uber's (UBER) long-term issuer default rating (IDR) to "BBB+" and assigned a commercial paper rating of "F1." [Deutsche Bank: Exploring Stablecoin or Tokenized Deposits] In a recent report on Friday, Sabih Behzad, Head of Digital Assets and Currency Transformation at Deutsche Bank, stated that the bank is exploring stablecoins and various forms of tokenized deposits. It is understood that the options being evaluated by Germany's largest bank include issuing its own token or joining industry consortium initiatives, while also exploring the development of its own tokenized deposit solutions for payment purposes. [Switzerland Unveils Banking Reform Proposal; UBS Faces $26 Billion in Additional Capital Requirements] According to the banking reform proposal put forward by the Swiss government, UBS Group will face up to $26 billion in new capital requirements over the next decade. Following months of uncertainty that weighed on the share price of the Zurich-based bank, the Swiss Federal Council announced on Friday that it will require UBS's parent company to fully capitalize its foreign subsidiaries. The Swiss government estimates that this will force UBS to increase capital for its main Swiss operations by up to $23 billion, with the remaining capital to be raised through other measures.