Gold slid on hopes of Ukraine war and Trump tariff war truce

·       Gold was also undercut by the Trump administration’s assurance of a strong dollar policy and a rumor that Trump may be thinking about some Gold monetization to reduce US debt

·       Wall Street Futures slip early Thursday on lingering uncertainty about US-China trade deal 2.0 and tariff finalization uncertainty

·       Dow heavyweight UnitedHealth may face probe over alleged Medicare scam

On Tuesday, May 13, 2025, Wall Street closed mixed on the US-China trade truce and the cooling inflation report. The S&P 500 surged around 0.7%, reclaiming positive territory for 2025, while the Nasdaq 100 jumped almost 1.6%, driven by a sharp rebound in chipmakers. Nvidia soared after announcing a major AI chip deal with Saudi Arabia, lifting peers like AMD and Broadcom more than 4%. The Dow Jones (DJ-30) lagged, falling around 0.6% as UnitedHealth shares plunged following the CEO’s departure and the suspension of forward guidance. Wall Street was further buoyed by a $600 billion investment initiative from the White House and a cumulative $1T investment commitment by Saudi Arabia (including private ones). Various big US MNCs, including Tesla, have also inked various business deals with Saudi Arabia.

On Tuesday, Wall Street was boosted by techs, energy, consumer discretionary, communication services, industrials, financials, and utilities, while dragged by healthcare, real estate, and consumer staples. Dow Jones (DJ-30) was boosted by NVIDIA, Caterpillar, Boeing, Goldman Sachs, IBM, Amazon, JPM, American Express, Apple, and Chevron, while dragged by United Health, Merck, J&J, Amgen, P&G, Travelers, Walmart, McDonald’s, Verizon, and Coca-Cola. Oil surged on Trump’s secondary oil sanctions on various Iranian oil carriers (shipping network) to China. On Monday, Gold Tumbled from around 3425 to 3200 amid an easing of US-China trade war tensions and an all-out US recession, but edged up on Tuesday on a softer inflation report.

On Wednesday, Gold slid after Trump expressed optimism about the Ukraine war deal and said he expects some "pretty good news" on the war in Ukraine soon. During a meeting with Qatar's Sheikh Tamim Bin Hamad Al Thani, Trump thanked the Arab country for its peace efforts, noting Doha was "very much involved in helping us in other regions, like Ukraine. I think we're having some pretty good news coming out of there today, and maybe tomorrow, and maybe Friday, frankly”.

The comments come ahead of expected talks in Istanbul on Thursday between Moscow and Kiev. It is still unclear if the talks will take place as Ukrainian President Zelensky insisted he will only talk to his Russian counterpart, Putin, and not lower-ranked officials, while Russia is yet to confirm whom it will send to Turkey. Trump claimed that Putin is more likely to show up if he does as well, but didn't confirm his attendance.

But later, another BN report suggested that Putin is to shun Zelensky's Istanbul offer, eyeing a Trump meeting. Russian President Vladimir Putin is not expected to accept Ukrainian President Zelensky's proposal for a one-on-one meeting in Istanbul, according to Russian government and diplomatic sources cited by The Moscow Times. While Moscow has proposed renewed peace talks with Ukraine, sources say Putin sees Zelensky as lacking the legitimacy for direct negotiations and would only consider such a meeting in the event of a "public capitulation." Instead, Kremlin insiders suggest Putin is weighing a visit to Turkey focused on engaging with US President Trump.

Late Wednesday, both the Trump administration and the Putin administration officially acknowledged that neither leader would attend any meeting in Istanbul. The Kremlin announced on Wednesday that Russian President Vladimir Putin chose the members of the delegation for negotiations with Ukraine in Istanbul, revealing that the list does not include either Putin or Foreign Minister Sergey Lavrov. According to the official statement, Putin's aide, Vladimir Medinsky, will lead the negotiating team.  Direct negotiations between Russian and Ukrainian officials, set to take place on Thursday in Istanbul, will be the first direct talks between the two countries since the first attempt to settle failed in 2022. Within less than a day of the first formal contact between Russian and Ukrainian delegations in three years, the Kremlin withheld confirmation of who would represent Moscow. Former officials describe the ambiguity as a tactic to unsettle Kiev and its allies.

The Trump administration is now trying to save the USD from further plunge-Gold slips.

On Wednesday, there was a report that the US is not seeking to weaken the dollar as part of trade deals. According to a person familiar with the situation, US officials negotiating trade deals around the world are not attempting to include currency policy pledges in the agreements. Foreign exchange markets are on edge due to concerns. President Donald Trump's administration wants a weaker dollar and may use trade negotiations to achieve that goal. On Wednesday, the South Korean won rose nearly 2% against the dollar, while the Japanese yen also gained. Earlier this month, Taiwan's currency experienced its biggest increase in decades.

The source indicates that U.S. officials are not pushing for currency policy pledges in trade deals to weaken the dollar, despite market concerns fueled by speculation about the Trump administration's intentions. Foreign exchange markets are reacting, with the South Korean won up nearly 2%, the Japanese yen gaining, and Taiwan's currency seeing significant increases. These movements reflect heightened sensitivity to potential U.S. policy shifts, though the source clarifies no such dollar-weakening strategy is currently in play within trade negotiations.

On May 13, 2025, U.S. President Trump embarked on the first major international trip of his second term, visiting Saudi Arabia and Qatar as part of a four-day Middle East tour that also included the United Arab Emirates (UAE). The trip, which followed a brief visit to Rome for Pope Francis’s funeral in April, was primarily focused on securing economic deals, strengthening bilateral ties with Gulf nations, and addressing regional security concerns. The itinerary underscored Trump’s preference for engaging with oil-rich Gulf states over traditional U.S. allies like Canada, Mexico, or the United Kingdom, a pattern consistent with his first term, when he also chose Saudi Arabia as his initial foreign destination in 2017. The visit was marked by lavish welcomes, significant business agreements, and notable policy announcements, particularly regarding Syria and regional geopolitics.

Earlier, the US Envoy Witkoff said:

·       Rubio and I will travel to Istanbul on Friday. I'm unsure if Putin will attend

·       WH-Putin not interested in a one-on-one meeting with Zelensky in Istanbul

China's Commerce Ministry:

·       China pauses unreliable entity list measure on 17 US entities

·       China pauses export control measures against 28 US entities for 90 days from May 14th

Fox Reporter on X: Trade-tariff deals with Japan and South Korea are said to be “close,” according to Wall Street sources close to the White House. Timing unclear; India deals as well, though it has been throttled by the tensions with Pakistan.

Trump may soon withdraw Fentanyl tariff of 20% Fentanyl tariff on Chinese goods.

The US Treasury Secretary Bessent said on May 14, 2025: USTR Greer and I are engaged with China to stop Fentanyl.

On Wednesday, May 14, 2025, China lifted export restrictions on rare earths and military-use technologies for 28 U.S. entities, just two days after a major U.S.-China tariff war ceasefire. The Geneva Agreement, reached on May 12, includes a 90-day pause and a 115-percentage-point reduction in reciprocal tariffs, signaling the first major de-escalation in the ongoing trade war. China's Ministry of Commerce confirmed the suspension, effective Wednesday, allowing exporters to apply for licenses to resume shipments during the 90-day window. In a further sign of thawing relations, China also announced a temporary lift on trade and investment bans for 17 U.S. companies, calling the latest developments a potential reset in bilateral ties.

On May 14, 2025, China announced the suspension of export restrictions on rare earths and military-use technologies for 28 U.S. entities, effective immediately, as part of a 90-day trade détente following a U.S.-China agreement reached in Geneva on May 12, 2025. This deal included a significant reduction in tariffs, with the U.S. lowering tariffs on Chinese imports from 145% to 30% and China reducing tariffs on U.S. goods from 125% to 10%.

The suspension of rare earth export curbs allows exporters to apply for licenses during these 90 days, easing tensions in the trade war that had escalated with tit-for-tat measures, including China's earlier restrictions on seven rare earth elements critical for semiconductors, electric vehicles, and defense technologies. This move is seen as a step toward stabilizing global supply chains, given China's dominance in rare earth production, supplying about 90% of the global market and half of the U.S. critical mineral imports in 2024.

Trump-Saudi Arabia (May 13-14, 2025)

Bilateral Meeting with Crown Prince Mohammed bin Salman: Trump and MBS held a high-profile meeting at the Royal Palace, where they signed more than a dozen agreements to enhance cooperation in defense, justice, energy, and cultural exchanges. These included a $142 billion defense partnership, with Saudi Arabia committing to purchase missiles, radar systems, and transport aircraft from the U.S.

Saudi-U.S. Investment Forum: Trump spoke at an investment forum in Riyadh, attended by prominent U.S. business leaders such as BlackRock CEO Larry Fink, Palantir CEO Alex Karp, and CEOs from Citigroup, IBM, Qualcomm, and Alphabet. The forum highlighted Saudi Arabia’s pledge to invest $600 billion in the U.S. over four years, with Trump pushing for this to be rounded up to $1 trillion, a figure he had negotiated with MBS before the trip. The deals emphasized sectors like artificial intelligence (AI), technology, and pharmaceuticals, with Nvidia announcing a partnership with Saudi Arabia’s sovereign wealth fund to build “AI factories” in the kingdom.

Gulf Cooperation Council (GCC) Summit: On May 14, Trump addressed a summit of GCC leaders (Saudi Arabia, UAE, Bahrain, Qatar, Kuwait, and Oman) in Riyadh. He used the platform to critique his predecessor, Joe Biden, claim the 2020 election was “rigged,” and lambast the White House press corps, drawing attention to his combative tone. The summit focused on regional security and economic integration, with Trump advocating for deeper U.S.-Gulf partnerships.

Meeting with Syrian President Ahmad al-Sharaa: In a historic encounter, Trump met informally with Syrian President Ahmad al-Sharaa, the first U.S.-Syria presidential meeting in 25 years. Trump described al-Sharaa as an “attractive, tough guy” with a “tremendous opportunity to do something historic” by normalizing relations with Israel. This meeting followed Trump’s announcement to lift sanctions on Syria, a significant policy shift, orchestrated by MBS of Saudi Arabia.

Major Policy Announcement: Lifting Sanctions on Syria

During his speech at the investment forum, Trump announced that the U.S. would lift sanctions imposed on Syria under the previous Assad regime, stating, “We will remove sanctions against Syria to give them a chance at greatness,” following the country’s devastating civil war. He reiterated this at the GCC summit, adding, “Good luck, Syria. Show us something special.” The decision, which aimed to normalize relations with Syria’s new government, was met with a standing ovation in Riyadh and sparked celebrations in Syrian cities like Damascus and Homs, where crowds waved Syrian and Saudi flags. The move was seen as a win for Syria’s interim government and aligned with Qatar’s push to lift sanctions under the Caesar Act, though Doha sought U.S. approval before providing financial support to Syria.

Highlights of Trump’s Comments in Saudi Arabia

Trump’s remarks in Saudi Arabia were a mix of economic boosterism, regional vision, and provocative geopolitics.

On Saudi Arabia and Economic Deals: “A great day in Saudi Arabia!!! A tremendous number of jobs will be created as a result of this trip.” Trump praised Saudi Arabia as a model for a “reimagined Middle East” driven by economic prosperity, touting the $142 billion arms deal and $600 billion investment pledge. “The Saudis, the Emiratis, and Qataris are going to fall all over themselves over who can outdo themselves to welcome the president,” he said.

On Syria: “I felt very strongly that this [lifting sanctions] would give them a chance at peace.” He urged al-Sharaa to seize the opportunity for historic change, particularly by aligning with Israel. Trump said he does not believe in permanent enemies.

On the Abraham Accords: Trump expressed his “fervent hope and wish” that Saudi Arabia would join the Abraham Accords, which normalized relations between Israel, the UAE, and Bahrain during his first term. He noted that Saudi Arabia’s participation was unlikely without progress toward a Palestinian state, a condition reiterated by MBS.

On Iran and the Persian Gulf: Trump urged Iran to take a “new and better path” in nuclear negotiations, warning of “massive maximum pressure” if Tehran did not comply. He also floated the idea of renaming the Persian Gulf to the “Arabian Gulf” or “Gulf of Arabia,” a proposal that delighted Arab states but risked escalating tensions with Iran amid delicate nuclear talks.

On U.S. Role in the Gulf: In a post on X/Truth, Trump claimed, “What Saudi Arabia, the UAE, and Qatar are offering the United States is a gesture of appreciation for the United States’ role in protecting them. We keep these countries safe, and without America, they would not have continued to exist on the map.” This reflected his transactional view of U.S.-Gulf relations.

Cultural Moment: During his speech, Trump boasted about renaming the Gulf of Mexico as the “Gulf of America” and received a standing ovation when Lee Greenwood’s “God Bless the USA” played, with Saudi dignitaries filming him on their phones—a notable scene in a country that guards Islam’s holiest sites.

Trump-Qatar (May 14, 2025)

Bilateral Meeting with Emir Sheikh Tamim: Trump and the emir held talks focusing on military cooperation, regional security, and economic deals. They signed a joint declaration of cooperation between the U.S. and Qatar, alongside defense agreements, including a statement of intent on defense cooperation and contracts for MQ-9B drones and FS-LIDS systems, signed by U.S. Defense Secretary Pete Hegseth.

Qatar Airways-Boeing Deal: Trump announced a significant purchase by Qatar Airways of 160 Boeing jets, which he claimed was the “largest order in Boeing’s history.” The deal, signed during a ceremony in Doha, was a centerpiece of the visit, highlighting U.S.-Qatari economic ties.

State Dinner: Trump attended a glittering state banquet at Lusail Palace, joined by Qatari royalty and U.S. business leaders. The event capped a day of deal-signing and reinforced Qatar’s role as a key U.S. ally, home to the largest U.S. military base in the Middle East.

Highlights of Trump’s Comments in Qatar

Trump’s remarks in Qatar were more subdued than in Saudi Arabia, focusing on economic achievements and regional stability.

On the Boeing Deal: “This is the largest order in Boeing’s history—160 airplanes-- A tremendous win for American jobs and Qatar’s future.”

On U.S.-Qatar Relations: “Qatar is a great friend, a tremendous ally. We’re doing big things together, from defense to business.”

On Israel and the Middle East Trip: Responding to questions about bypassing Israel, Trump said, “This is good for Israel, having a relationship like I have with these countries, Middle Eastern countries, essentially all of them. I think it’s very good for Israel.” This addressed speculation about tensions with Israeli Prime Minister Netanyahu, given Israel’s absence from the itinerary.

On the Qatari Jet Offer: Trump defended Qatar’s offer to donate a $400 million Boeing 747 to replace Air Force One, dismissing ethical and security concerns raised by Democrats. In a Fox News interview aboard Air Force One en route to Riyadh, he called the current presidential plane “small” and “much less impressive” than those used by Middle Eastern leaders, arguing the gift was a “no-brainer” for the U.S. House Speaker Mike Johnson supported the move, stating it was a gift to the U.S., not Trump personally, though he urged security checks. Senate Majority Leader John Thune noted the issue would face “plenty of scrutiny.”

Economic Focus and Trump Organization Ties- Conflict of interest

The trip was heavily centered on business deals, reflecting Trump’s transactional approach to foreign policy. Saudi Arabia’s $600 billion investment pledge, Qatar’s Boeing purchase, and anticipated UAE commitments of $1.4 trillion over a decade underscored the economic stakes. However, the Trump Organization’s expanding footprint in the region raised concerns about conflicts of interest. The company announced deals in Saudi Arabia (Trump Tower in Riyadh and a $530 million tower in Jeddah), Qatar (Trump International Golf Club & Villas near Doha), and the UAE (Trump International Hotel & Tower in Dubai), often in partnership with government-linked developers like Dar Global and Qatari Diar.

Critics, including watchdog groups, argued that these deals blurred the lines between U.S. foreign policy and Trump’s family business, potentially violating constitutional ethics standards. The White House maintained that Trump has no active role in the Trump Organization, which is managed by his sons, Eric and Donald Jr.

Geopolitical Implications

The trip occurred amid pressing regional issues, including the Israel-Gaza conflict, Iran’s nuclear program, and stalled Saudi-Israel normalization talks. Trump’s decision to bypass Israel sparked speculation of strained relations with Netanyahu, particularly as Israel faced a deadline for a Gaza ceasefire before a planned offensive. His push for Saudi Arabia to join the Abraham Accords was tempered by Saudi insistence on Palestinian statehood progress, a condition unlikely to be met given the ongoing Gaza war. The proposal to rename the Persian Gulf risked inflaming tensions with Iran, though Saudi Arabia and the UAE supported U.S.-Iran nuclear talks. The lifting of Syrian sanctions was a bold move, aligning with Gulf interests but raising questions about U.S. strategy in post-Assad Syria.

Summary

President Trump’s trip to Saudi Arabia and Qatar on May 13–14, 2025, was a high-stakes endeavor that delivered significant economic agreements, including a $142 billion Saudi arms deal, a $600 billion investment pledge, and a record-breaking Qatar Airways Boeing order. His announcement to lift sanctions on Syria marked a pivotal policy shift, while his comments on the Abraham Accords, Iran, and the Persian Gulf underscored his ambition to reshape Middle East dynamics.

However, the trip’s focus on business, coupled with the Trump Organization’s regional ventures, fueled concerns about ethical conflicts. The lavish welcomes and Trump’s provocative rhetoric—praising Saudi Arabia as a model, defending Qatar’s jet offer, and touting U.S. protection of Gulf states—reinforced his deal-making persona. As Trump proceeded to the UAE, the trip solidified his administration’s prioritization of Gulf partnerships, though its long-term strategic impact remains uncertain amid complex regional challenges.

Highlights of Trump’s comments on May 14, 2025

·       I discussed Russia and Ukraine with the Qatari Emir and Iran, too

·       Iran's situation will work out

·       The Boeing order is the largest in history

·       Boeing's agreement is for over $200 bln

·       Qatar Airways ordered over 160 Boeing jets

·       Qatar is working with the US on negotiating an Iran deal

·       If we can avoid a harsh road with Iran, that's great

·       When US Treasury Secretary Bessent goes on TV, everything goes up. Bessent understands the market

·       I think we're in great shape

·       Trump to Qatar: I hope you can help me with the Iran situation. We want to do the right thing.

Conclusions: 

China is in a better position of strength to win this long war of attrition on trade; the US has to reset completely to compete with mighty China. Unlike China/XI, US President Trump is under huge pressure from both Wall Street and Main Street for his constant flip-flops on tariff policies. Trump also has to ensure tariff policy stability rather than constant back & forth, as US retailers and MSMEs need to place advance orders for the coming festival season sales by May to big exporters like China.

Trump may soon scale back his Fentanyl levy of 20% on China, as China will not and never pay any Trump tariffs; it will be paid by US importers and eventually borne by US consumers or even producers. Trump may also extend his 90-day reciprocal tariffs pause on China and all other countries to at least December 2025 for ‘significant progress’ on preliminary trade deals and to remove any tariff-related uncertainty during the holiday/X-Mas shopping season.

Trump’s unusually high tariffs (embargo) of 145% on Chinese goods were also leading to a potential imminent supply shock for the US economy; there are no easy alternatives to replace Chinese goods in terms of scale, efficiency, and costs for at least the next few years. The US economy was facing a high potential severe supply shock, which could result in a significantly higher cost of living. If the US companies/importers can’t raise prices amid Trump's threat and increasing autocratic behavior, their financial health will deteriorate. Various influential Republican leaders were also openly criticizing Trump’s bellicose tariffs and other policies, which may affect the mid-term US election next year (November 26). Trump is set to lose his trifecta by Jan’27. Some Republican leaders and also most of the Democrats are now trying to take back Tariffs power from Trump to the US Congress for policy stability.

Bottom line

Trump may soon withdraw his 20% Fentanyl levy on China, and the US will continue 10% universal tariffs on all and sectoral higher tariffs of 20% -25% on metals, automobiles, and pharmaceuticals, along with selected exemptions. But even at around 15%-20% weighted average tariffs, it’s still substantially higher than the 2.5% prior, which will inevitably cause a higher cost of living for Americans, subdued discretionary consumer spending, tepid private capex, higher unemployment, and lower economic growth. In other words, the US economy may be heading for a stagflation-like scenario in the coming days unless there is a corresponding increase in real income along with productivity.

Market Impact

On Wednesday, May 14, 2025, Wall Street closed mixed as the Fed may not oblige for a rate cut in June amid tariff discussion-related uncertainty, especially with China. The S&P 500 added 0.1% after erasing its losses for the year, while the Dow-30 edged down 89 points and the Nasdaq 100 surged 0.7%, boosted by gains in major chipmakers. Nvidia surged following reports of AI chip shipments to Saudi Arabia, and AMD soared after unveiling a $6 billion share buyback plan. The broader AI rally fueled a 17% surge in Super Micro Computer, helping lift overall market sentiment.

Optimism was further supported by a temporary U.S.-China tariff reduction, raising hopes for a broader trade agreement despite ongoing uncertainties. Meanwhile, President Trump’s Middle East visit led to several new business deals, including a Boeing-Qatar Airways agreement and AI initiatives in the Gulf. Trump emphasized that almost $10T investment was committed in his first 100 days of 2nd term, which is a record amid his tariff threat. Although mega-cap stocks showed strength, sector performance was mixed, and Fed officials signaled a cautious outlook amid mixed inflation data.

On Wednesday, Wall Street was boosted by communication services, techs, and consumer discretionary, while dragged by healthcare, materials, real estate, energy, utilities, industrials, consumer staples, and financials. Dow Jones (DJ-30) was boosted by NVIDIA, Walt Disney, Goldman Sachs, JPM, Walmart, Microsoft, Boeing, Salesforce, Coca-Cola, and Visa, while dragged by Merck, Amgen, 3M, J&J, Sherwin, United Health, Nike, Travelers, Caterpillar, and Cisco.

Early Thursday, Wall Street Futures slipped amid lingering uncertainty over tariff negotiations and a report that UnitedHealth may face a probe over corruption allegations regarding Medicare. Gold slid on the US-China trade war pause, fading hopes of an all-out Trumpcession, commitment of a strong dollar policy by the Trump administration, and progress of the Ukraine war ceasefire

Weekly-Technical trading levels: DJ-30, NQ-100, and Gold

Looking ahead, whatever the fundamental narrative, technically Dow Future (CMP: 41400) now has to sustain over 41800 for a further rally towards 42000/42500-43000/43500, and even 44600-45200 in the coming days; otherwise sustaining below 41700, DJ-30 may again fall to 41000/40600-4010039900 and 39700/38600-38000/37700-37300/37000 in the coming days.

Similarly, NQ-100 Future (20200) has to sustain over 20800 for a further rally to 21100/21400-21700/22000 and 22400-22600 in the coming days; otherwise, sustaining below 20750/20600-20500/20400, NQ-100 may again fall to 20000/19600-19400/19200 and 19100/18800-18600/18000-17600/16400 and 16200-15800 in the coming days.

Also, technically Gold (CMP: 3240) has to sustain over 3300 for any recovery to 3325/3375* and 3400/3425-3450/3505*, and even 3525/3555 in the coming days; otherwise sustaining below 3290-3275, Gold may again fall to 3255/3225-3200/3165* and further to 3130/3115*-3075/3015-2990/2975-2960*/2900* and 2800/2750 in the coming days.