Starting from the new all-time high of USD 5,602 on January 29, the gold price has now been in a correction phase for over three months, characterized so far by two sharp downward waves, two recovery waves, and most recently by another downward wave since mid-April.

According to the latest report on Thursday, Saudi Finance Minister Mohammed Al-Jadaan stated that the decline in oil revenues has provided the country with "an opportunity to review and reflect on past investment plans" , but this will not affect their ambition to promote non-oil economic growth at all . As background, international oil prices have fallen by more than 20% year-to-date, and Saudi Arabia is currently leading efforts to "tighten" OPEC+'s production cut discipline. The latest report indicates that OPEC+ may decide this weekend to continue increasing production at a rate of 411,000 barrels per day in July , as a penalty for member countries such as Kazakhstan and Iraq that have consistently exceeded production quotas. (Brent crude daily chart, source: TradingView) In a recent interview, Al-Jadaan told the media that despite widening budget and current account deficits and rising debt levels, Saudi Arabia still plans to maintain its current pace of government spending to support its ambitious development plans. However, he also noted that the country will take advantage of the oil price decline and global uncertainty to evaluate the numerous ongoing diversification initiatives. Al-Jadaan said, "We will not waste this crisis. While the world is perceived to be in crisis, the Saudi economy is performing exceptionally well. This is an opportunity to assess the current situation—if there is a chance to take bold action, we will act decisively. At the same time, the crisis provides an opportunity for review and reflection—are we rushing projects? Are there unintended consequences? Do we need delays? Do we need replanning? Do we need acceleration? " The Saudi finance minister emphasized that the current priority is to avoid falling into the "boom and bust cycle trap" that has long plagued the country. Saudi Arabia's goal is not simply to balance its budget but to ensure, through institutional design, that spending supports economic growth. He also revealed that the Public Investment Fund, responsible for developing the country's large projects, is undergoing "similar, very cautious adjustments." Data shows that Saudi Arabia's Q1 oil revenues fell by 18% year-on-year compared to 2024, while the fiscal deficit rose to $15.6 billion , the highest quarterly deficit since 2021. This also means that the Saudi Ministry of Finance will find it difficult to achieve its target of narrowing the budget deficit to 2.3% of GDP this year. The IMF previously predicted that Saudi Arabia's budget deficit would expand to more than 4% of GDP in 2025 and 2026, while estimating that the oil price required for the country to achieve fiscal balance would need to reach $92 per barrel. In response, Jadaan said, "As long as government spending can support non-oil economic growth, I won't be concerned about the fiscal deficit expanding to 3%, 4%, or even 'occasionally' 5% of GDP." It should be noted that Saudi Arabia's debt-to-GDP ratio stands at only 26%, placing it in a very healthy range globally. Jadaan also emphasized that there is no plausible scenario under which Saudi Arabia's debt level would reach the 40% ceiling set by the Ministry of Finance. The Saudi finance minister expects that, driven by non-oil activities, the country's GDP will grow by 4.6% this year, a significant increase from the 1.3% growth in 2024. Jadaan stated that what reassures the Saudi government is that many targets have been achieved or are on track to be met as planned. He said, "This gives us confidence, but we will not become complacent."

The Chinese and US governments issued a joint statement on Monday, agreeing to temporarily modify and eliminate additional tariffs imposed on each other's goods. Within 90 days, the reciprocal tariff rates between the two countries will be reduced to 10%. This statement significantly boosted confidence in global capital markets, with Asian and European stock markets, as well as US stock index futures, all rising on Monday. Meanwhile, as tariff disputes ease, market expectations are that the global economy is likely to continue growing amid the resumption of normal trade between China and the US. This has also driven stronger oil demand, thereby benefiting oil prices. As of press time, Brent crude oil futures prices rose by 2.74%, and WTI crude oil futures prices rose by 2.72%. However, the sustainability of the rebound in crude oil prices remains to be verified. Gao Jian, a crude oil researcher at Qisheng Futures, previously told the media that it is uncertain whether the tariff issue can be fundamentally resolved and whether tensions can be eased. Unless there are more tangible and favorable developments in macro, fundamental, or geopolitical aspects, the scope for further rebounds in oil prices will be limited. Toshitaka Tazawa, an analyst at Fujitomi Securities, had also previously warned that optimism over constructive talks between China and the US has supported market sentiment, but OPEC's production increase plans may limit gains. Game Theory OPEC plans to accelerate production increases from May to June to supply more crude oil to the global market. Meanwhile, the US and Iran will continue negotiations on the nuclear program, which will also reinforce market perceptions that global oil supplies will remain stable. On the other hand, US President Trump also seeks to continue lowering oil prices to fulfill his campaign promise of reducing energy costs. These macro factors collectively exert pressure on oil prices, leading analysts to believe that oil prices will remain low until 2026. Goldman Sachs earlier projected that for the remainder of 2025, the average price of Brent crude oil will remain at $60 per barrel, with WTI crude oil averaging $56 per barrel. In 2026, Brent crude oil will further decline to $56 per barrel, and WTI will fall to $52 per barrel. Starting from Monday this week, Trump will also make his first visit to the Middle East, conducting state visits to Saudi Arabia, the UAE, and Qatar. Some commentators have pointed out that low oil prices are, to some extent, a gesture of goodwill from the Middle East towards Trump. For example, Saudi Arabia hopes to attract more US investment to support its Vision 2030 plan. Trump also hopes to receive more capital inflows from Gulf countries. However, Karen Young, a senior fellow at the Center on Global Energy Policy at Columbia University, stated that Gulf countries have higher import values than export values. If they cannot increase export revenues, they will have to sell domestic assets to cover fiscal and current account deficits. This means that low oil prices are not a sustainable policy for the Gulf countries. Tim Callen, a visiting scholar at the Arab Gulf States Institute in Washington, added that if oil prices continue to fall, it is less likely that the Gulf countries will fulfill their investment commitments to the United States. This, in turn, forces Trump to consider the possibility of rising oil prices. Given that attracting large-scale investment funds from the Middle East to the United States could be seen as a victory for the White House's economic agenda, Trump's trip to the Middle East will be crucial for the future direction of global oil prices.

Deutsche Bank recently warned that the US dollar exchange rate will enter a structural downward trend in the coming years, which will push the dollar against the euro to its lowest level in more than a decade. Recently, the US has arbitrarily wielded the "tariff stick," raising concerns among investors about the loss of global trust in US assets, and the dollar has also faced an unusual wave of selling. Deutsche Bank pointed out that trade conflicts have already harmed the dollar, and its safe-haven attributes are being eroded, facing a crisis of confidence. Deutsche Bank strategists George Saravelos and Tim Baker stated that the negative impact of US tariff policies, combined with Germany's fiscal stimulus and the reassessment of the US role on the global stage, will lead investors to sell US assets and drag the dollar lower. Earlier this week, the US dollar index fell to a three-year low, briefly breaking below the 98 mark. The reason was the increased uncertainty in US policies, which raised doubts about the dollar's status as the world's reserve currency. Deutsche Bank strategists wrote in the report, "The prerequisites for a significant downward trend in the dollar are in place, and given the historic developments over the past few months, we now expect the dollar to enter a prolonged decline cycle." Deutsche Bank now expects the euro to rise to 1.30 against the dollar by the end of 2027, a level not seen since 2014 and well above the survey's median forecast of 1.15. The bank also expects the dollar to fall to 115 against the yen, the lowest level since 2022. Just a month ago, Deutsche Bank's forecast targets for the euro and yen were 1.15 and 125, respectively. The euro will benefit from "safe-haven inflows" and foreign exchange reserve managers looking to increase investments in Europe. The euro rose nearly 5% this month and briefly touched 1.15 dollars this week. Deutsche Bank expects that by the end of 2027, the dollar will decline against other currencies, with the pound rising to 1.45 dollars against the dollar, the highest level since 2016. The dollar is expected to fall to 1.25 against the Canadian dollar, the lowest level since mid-2022. Saravelos and Baker stated that Trump's trade policies are reducing foreign investors' willingness to fund the US "twin deficits" (fiscal deficit + current account deficit). This has led to the gradual exit of large holdings of US assets over the past few years and prompted other countries to increase fiscal spending to support domestic economic growth and consumption. They believe this means that decades of American exceptionalism "have already begun to erode." As the market continues to move away from the dollar, extreme uncertainty and rapidly changing policy norms will keep the risk of "market chaos and rule breakdown" high. Dollar confidence is waning. Deutsche Bank's view aligns with that of Kamakshya Trivedi, Goldman Sachs' global head of foreign exchange, rates, and emerging markets strategy, who recently stated that the dollar has entered a sustained long-term decline phase, and foreign investors are currently reassessing the risk-return of dollar-denominated assets as US Treasuries and US stocks fall together. Meanwhile, Goldman Sachs' chief economist Jan Hatzius also said on Thursday that the dollar still has room to fall further, and the pressure on global investors to adjust their portfolios' dollar assets will increase downward pressure on the dollar. Barry Eichengreen, an economist at the University of California, Berkeley, claimed, "Global trust in the dollar was built over half a century or more, but it could disappear in the blink of an eye."