Daily Fundamental Analysis: Gold Jumps On Weaker Dollar in Anticipation of Fed Rate Decision

Key Takeaways:

• Progress in trade talks between the U.S. And India
• Oil falls to lowest level since 2021 after OPEC+ announced increased production
• Gold rises again as the US dollar weakens

Gold price rises for the second day on Tuesday. Despite improving US-China relations, Trump’s trade policies and geopolitical tensions drive safe-haven demand as Ukraine launched drones at Moscow, disrupting airport operations. The weakening US Dollar, amid economic uncertainty from Trump’s tariffs, supports gold prices. However, traders remain cautious ahead of Tuesday’s FOMC meeting.

U.S. futures held steady ahead of the Fed’s first meeting since Trump’s April tariff announcement. A rate decision is due Wednesday, with futures showing minimal odds of a rate cut.

U.S. stocks declined overnight, ending the S&P 500’s nine-day streak. The S&P 500 fell 0.64% to 5,650, Nasdaq dropped 0.74% to 17,844, and Dow decreased 0.24% to 41,218. Yesterday ISM Services PMI rose to 51.6 in April, easing recession concerns.

U.S. crude oil futures fell 2% Monday to their lowest since 2021 after OPEC+ announced a production increase. U.S. crude settled around $57 levels while Brent fell to $60.  Since the beginning of the year, Oil is down 20%.

OPEC+, led by Saudi Arabia, will increase output by 411,000 barrels per day in June, matching May’s increase. This brings total additional supply to over 800,000 bpd across two months. The price decline reflects recession fears from Trump’s tariffs and OPEC+’s supply increase.

Asian markets rose Tuesday on U.S. trade developments and strengthening Asian currencies against the dollar. India proposed zero reciprocal tariffs on select imports, while Malaysia reported progress in U.S. tariff discussions. U.S. Treasury Secretary Bessent indicated deals were imminent, supporting President Trump’s earlier statements.

Berkshire Hathaway shares fell Monday following Warren Buffett’s announcement to step down after 60 years in the company. At Berkshire’s annual meeting, Buffett announced Greg Abel will become CEO. The board voted for Abel to assume the role January 1, 2026, with Buffett staying as chairman.

Berkshire Class A shares dropped 4.9% to $769,960 from their record high of $809,350.