Markets under pressure: gold, rates, and rising tensions

Summary

---

Podcast Summary: Moving Markets

Episode: "Markets under pressure: gold, rates, and rising tensions"

Date: June 11, 2026
Host: Bernadette Anderko (A)
Guests:

• Roman Canciani, Head of Product & Investment Content (B)
• Carsten Menke, Head of Next Generation Research (C)
• Dario Messi, Head of Fixed Income Research (D)

---

Overview

This episode provides a concise yet comprehensive briefing on the forces shaping current market volatility—geopolitical turmoil, high inflation, shifting central bank policy, and sharp moves in commodities and equities. The team examines global market reactions with special focus on Europe, Asia, and the US, and dives into the sell-off in precious metals. The episode wraps up with a preview of the European Central Bank's much-anticipated rate decision and its implications for bond investors.

---

Key Discussion Points & Insights

1. Global Markets Roundup

Guest: Roman Canciani
Timestamps: 00:48–06:06

European Markets (00:48–01:34)

• Modest declines continued, with the Stoxx 600 dipping slightly, marking four consecutive daily losses.
• Germany: Underperformed, falling ~1%, weighed by DIW economic institute warnings:
  • Rising energy prices tied to Middle East tensions threaten recession for Germany.
  • DIW revised down growth forecasts for 2026, deepening economic gloom.
• Quote:

  "Germany's stocks underperformed, falling around 1%—really weighed down by warnings from the DIW economic institute...could tip the German economy into a technical recession this year." — Roman Canciani (01:09)

Asian Markets (01:34–02:38)

• Significant foreign investor withdrawals: ~$27 billion in June.
• MSCI Asia Pacific Index: -4% for June, reversing earlier gains.
• Culprits:
  • Middle East-driven risk aversion.
  • Disappointing tech earnings (Broadcom), fundraising concerns (Meta).
  • Tech/AI correction stinging S. Korea, Taiwan.
  • India: RBI cut growth forecast, raised inflation outlook.
• Quote:

  "Asia has witnessed substantial foreign investor withdrawals this month, roughly US$27 billion, so far exceeding the entire outflow figure for the MSCI. Asia Pacific Index has dropped over 4% in June." — Roman Canciani (01:47)

US Inflation Story (02:38–03:34)

• May CPI: Headline inflation soared to 4.2% (3-year high), fuelled by energy prices.
• Core inflation rose 2.9%: "Broader price pressures aren't spiraling out of control yet."
• Fed likely to hold rates steady at upcoming meeting.
• Quote:

  "Energy volatility is certainly injecting uncertainty into the outlook. It creates a tricky situation for the Federal Reserve..." — Roman Canciani (03:17)

Bank of Canada (03:34–03:55)

• Held rates steady at 2.25% for the fifth consecutive meeting.
• Delicate balancing act: slow growth vs. persistent inflation.
• Quote:

  “They’re walking a tightrope, trying to balance sluggish economic growth against stubbornly high inflation.” — Roman Canciani (03:43)

US Equities & Key Company Moves (03:55–05:13)

• Dow: -2% (>950 pts drop). Nasdaq: -2%. S&P 500: -1.6%.
• Supermicro: -30% after a $7bn fundraising plan (AI component demand; market worried about dilution).
• Oracle: -11% in extended trading (higher-than-expected capex).
• Across-the-board sector declines >2%; Magnificent Seven (except Apple) all down.
• Quote:

  "Super microcomputer shares plummeted nearly 30% after announcing plans to raise US$7 billion...the market reacted negatively to the dilution..." — Roman Canciani (04:09)

Commodities and Currencies (05:13–06:06)

• Oil: Brent nearly $94 amid fresh US strikes against Iran—feeds risk-off mood.
• Equities globally dragged lower, though US equity futures rebounding.
• ECB widely expected to hike 25 bps; US PPI data later in the day.

---

2. Precious Metals Market Update

Guest: Carsten Menke
Timestamps: 06:16–09:33

The Sell-off Explained (06:22–07:13)

• Sentiment in precious metals “shifted materially” post-Iran war outbreak:
  • Pre-war: Narrative was about falling US rates, weaker dollar.
  • Post-war: Now facing rising US inflation, renewed Fed tightening concerns.
  • Strong US labor data stoked further selling.
• Quote:

  "Markets find themselves in a very difficult mix of rising US inflation—which is partly war-related, but also reflects a remarkably resilient U.S. economy." — Carsten Menke (06:41)

Investor Behavior and Market Flows (07:13–08:04)

• “Fearing the Fed” is now dominant driver.
• Outflows from physically-backed precious metal products have picked up, mirroring policy fears.
• Quote:

  "Holdings of physical-backed products...have been recording outflows since the start of the Iran war." — Carsten Menke (07:40)

Is Fed Fear the Only Reason? (08:04–08:35)

• Technicals compound the trend: breaks below support accelerate selling.
• Market behavior mirrors the last upcycle—flows dominate, but this time to the downside.

Risks & What to Watch (08:35–08:58)

• Key risk: "Flush out" from physically-backed products—largest indicator to monitor.
• Outflows thus far “rather moderate”, but the risk remains.

Julius Baer's View on Gold/Silver (08:58–09:33)

• No fundamental view change: constructive on gold, neutral on silver.
• Lowered 3- and 12-mo. price targets:
  • Gold: $4,250 / $4,500 per ounce
  • Silver: $67.50 / $65 per ounce
• Maintain long gold/silver ratio position.
• Quote:

  “For me, holdings of physically-backed products are the single most important indicator to watch at the moment.” — Carsten Menke (08:50)
  “For now, we're keeping our views unchanged...we've lowered our price targets...” — Carsten Menke (09:05)

---

3. ECB Rate Decision Preview & Fixed Income Outlook

Guest: Dario Messi
Timestamps: 09:42–12:50

ECB June Rate Hike: A Done Deal (09:54–10:56)

• June 25bps rate hike universally expected.
• Inflation driven by energy price shock leaves ECB little room for “look through” approach.
• Quote:

  “A June hike is the most appropriate thing to do now, given that inflation dynamics did not go into the right direction since the energy price shock happened.” — Dario Messi (10:26)

What Comes Next? (10:56–12:16)

• Julius Baer sees this as a "one and only" hike—citing weak Eurozone growth.
• Market expects up to three hikes, but negative surprises in data and lack of investment momentum make that unlikely.
• Key to watch: ECB language, staff projections, inflation durability assumptions.
• Quote:

  "We expect today the one and only hike. So not more hikes after that...growth momentum is already weakening..." — Dario Messi (11:09)

Bond Positioning in Light of ECB (12:16–12:47)

• Despite the hike, expect yields to fall as growth weakens.
• Prefer “quality Euro bonds” with a “duration overweight.”
• Quote:

  "We like to have some duration overweight more broadly, but feel even more comfortable with that position with quality Euro bonds." — Dario Messi (12:38)

---

Notable Quotes

• On US inflation and the Fed:

  "Energy volatility is certainly injecting uncertainty into the outlook. It creates a tricky situation for the Federal Reserve..." — Roman Canciani (03:17)

• On investor flight from Asia:

  "Asia has witnessed substantial foreign investor withdrawals this month, roughly US$27 billion, so far exceeding the entire outflow figure for the MSCI." — Roman Canciani (01:47)

• On the psychology driving precious metals:

  "If you want to put it very simply, the precious metal markets are fearing the Fed at the moment." — Carsten Menke (07:18)

• On the ECB's approach:

  "A June hike is the most appropriate thing to do now, given that inflation dynamics did not go into the right direction since the energy price shock happened." — Dario Messi (10:26)

---

Important Timestamps

• Global market developments: 00:48–06:06
• Precious metals update and outlook: 06:16–09:33
• ECB rate preview & fixed income positioning: 09:42–12:50

---

Tone

The episode maintains a measured, professional, and concise tone—delivering clear, actionable analysis with a focus on facts and underlying drivers, while candidly sharing tactical shifts in house view where warranted.

---

Useful For:
Anyone seeking a distilled, sophisticated briefing on current global financial market challenges—including investors navigating inflation, monetary policy, and commodity volatility.

---

Transcript

[A]

Good morning everyone and welcome to Julius Baer's Moving Markets podcast on Thursday 11 June, with me, Bernadette Anderko. We'll begin the show as always with our market update, reviewing the key developments from the past 24 hours. And I'm very pleased to be joined by our head of product and investment content, Roman Canciani, for that. After that, I'm looking forward to welcoming our head of next generation research, Carsten Menke, who's going to give us an update on his views on precious metals given their sell off this week. And we'll round off today's show with a preview of our expectations of today's European Central bank meeting with our head of fixed income research, Dario Messi. So let's start with that roundup of latest developments in global financial markets. Good morning to you, Roman.

[B]

Good morning, Bernadette.

[A]

So yesterday, Roman, we saw fairly broad based declines across the board, fueled by escalating political tensions and sticky inflation. But why don't we start at home? How did European markets fare amidst all this turbulence?

[B]

Well, actually it wasn't that bad in Europe, but still pretty muted. The Stoxx 600 edged slightly downwards, marking its fourth consecutive daily loss. Germany's stocks underperformed, falling around 1%. Really weighed down by warnings from the DIW economic institute. They're suggesting that rising energy prices, directly linked of course to the situation in the Middle east, could tip the the German economy into a technical recession this year. They've also revised down their growth forecast for 2026, adding to the gloom.

[A]

OK, that paints a pretty concerning picture for Europe's largest economy. But speaking of global concerns, we've also seen significant outflows from Asian equity markets. Can you elaborate on that, please?

[B]

Absolutely. Asia has witnessed substantial foreign investor withdrawals this month, roughly US$27 billion, so far exceeding the entire outflow figure for the MSCI. Asia Pacific Index has dropped over 4% in June, reversing earlier gains. Several factors are at play here. Firstly, the tensions in the Middle east are spooking investors, of course. And secondly, we've seen disappointment with earnings reports from companies like Broadcom, coupled with concerns surrounding fundraising plans at Meta. This triggered a pullback in AI related tech stocks impacting countries like South Korea and Taiwan, which are heavily involved in the semiconductor and AI supply chain chain. Even India hasn't escaped with the RBI lowering its growth forecast while simultaneously projecting higher inflation.

[A]

Ok, so moving across to the us the inflation story continues to evolve. We saw the latest CPI numbers released yesterday. What was the takeaway there.

[B]

US consumer prices definitely accelerated in May, hitting a three year high with a 4.2% annual rate. Energy costs are the primary driver behind this surge, putting a real squeeze on household budgets. However, beneath the surface, the picture is a bit more nuanced. Core inflation, stripping out food and energy, came in at a more moderate 2.9%. This suggests that broader price pressures aren't spiraling out of control yet. But energy volatility is certainly injecting uncertainty into the outlook. It creates a tricky situation for the Federal Reserve as they consider the next steps. Analysts overall believe they will keep interest rates on hold at their next meeting next week.

[A]

And that brings us nicely onto monetary policy. The bank of Canada made a decision yesterday. What was their stance?

[B]

The bank of Canada held its key interest rates steady at 2.25% for the fifth consecutive meeting. They're walking a tightrope, trying to balance sluggish economic growth against stubbornly high inflation fueled by energy prices.

[A]

All right, let's zoom in on specific company news. I saw supermicrocomputer experiencing a significant share drop. What caused that?

[B]

Yes, and it contributed to a decidedly negative day for US equities overall. The Dow Jones Industrial Average fell almost 2%, shedding over 950 points, while the NASA Composite tumbled 2% and the S&P 500 was down 1.6%. Super microcomputer shares plummeted nearly 30% after announcing plans to raise US$7 billion to finance component purchases for fulfilling AI orders. Essentially, the market reacted negatively to the dilution associated with this fundraising effort, despite the positive signal of strong demand for their products. We also saw Oracle slip by over 11% in extended trading after reporting quarterly capital expenses that exceeded estimate. Losses spanned multiple sectors with industrials, materials, information technology and consumer discretionary all declining by more than 2%. Also, the highly watched Magnificent Seven tech giants, with the exception of Apple, entered the day lower, led by declines in Tesla and Nvidia.

[A]

Okay then. Finally, Roman, let's touch upon commodities and currencies. Oil prices have been understandably sensitive to the unfolding events in the Middle east, but where do things stand?

[B]

Currently, oil prices have continued their ascent this morning with Brent crude climbing to almost US$94 per barrel. Fresh US strikes against Iran are fuelling pessimism and this is contributing to the overall risk off sentiment and dragging down global equities. Although, and this is the good news this morning, US Equity market futures are currently trading firmly in the green. Looking ahead, we have the release of US PPI data later today along with the ECB's rate decision. The ECB is widely expected to hike rates by 25 basis points today in response to persistent inflation. But I'm looking forward to hearing what Dario has to say about this in just a minute. That's it from me.

[A]

Super. Thank you very much for the comprehensive roundup of the news today.

[B]

Roman, thank you very much. Merdet. It's always a pleasure.

[A]

And now, as promised, we turn to Karsten Manke. Good morning to you, Karsten.

[B]

Hello.

[C]

Good morning.

[A]

So what's going on in the precious metals markets? Prices have been trending lower, but the selling pressure definitely seems to have intensified since last Friday's US Labour market report.

[C]

Well, absolutely correct, Bernadette. And I think the focus of the precious metal markets has clearly shifted. Before the Iran war, it was all about falling US Interest rates and a weakening US dollar. Now it is just the opposite. The markets find themselves in a very difficult mix of rising US inflation, which is of course partly war related, but also reflects a remarkably resilient U.S. economy. And the latest evidence of this was provided by last Friday's labor market report, which showed solid employment growth and then started the sell off in precious metals, which is continuing this week.

[A]

So I assume then that this is about the US Federal Reserve potentially raising interest rates.

[C]

Yes. So if you want to put it very simply, the precious metal markets are fearing the Fed at the moment. They are fearing that the Fed might raise interest rates in recognition of an economy that is characterized by higher inflation and higher growth. As a result, there is renewed selling by investors both in the physical precious metal markets and also in in the futures markets. Holdings of physical backed products, which are our preferred gauge of investment demand, have been recording outflows since the start of the Iran war. Historically, inflows and outflows were closely associated with US Monetary policy. So periods of rising interest rates and a stronger US dollar saw outflows and vice versa.

[A]

But is that sufficient then to explain the selling pressure which we're seeing no.

[C]

Fears of? Rising interest rates are a fundamental factor that is increasingly driving flows in the markets. And we attribute much of the selling pressure to a turning in the technical trend as prices broke below key support levels. So the situation seems very similar to what the markets experienced during their record run. Flows are dominating fundamentals, but now they are pushing prices down instead of up.

[A]

Okay, so from what you're saying then, it seems like the markets are at quite a crucial point. So what's the biggest risk?

[C]

I think the biggest risk is a flush out of the physically backed Products, as mentioned before, there have been outflows during the past few weeks, but they have been rather moderate. For me, holdings of physically backed products are the single most important indicator to watch at the moment.

[A]

All right then. Lastly, Carsten, what's your view on the market? Have you changed it due to the sell off?

[C]

No, for now we're keeping our views unchanged. So remain constructive on gold and remain neutral on silver. But we've lowered our price targets to $4,250 and $4,500 per ounce of gold in three and 12 months time. And for silver, we're looking at $67.50 per ounce and $65 per ounce again in three and 12 months time. the same time, we're sticking to our long position in the gold silver ratio.

[A]

Brilliant. Thank you very much for joining us today, Carsten, great to get your update.

[C]

Thanks for having me.

[A]

And now, as I promised at the start, we're going to have our preview of the European Central bank meeting outcome, which we'll get later today. And to talk about that, welcome to the podcast. Dario.

[D]

Hello. Good morning, Bernadette.

[A]

So, yes, European Central bank, in fact lots of central banks are up again. We're starting with the ECB today. What do you expect?

[D]

Yeah, first of all, we expect the rate hike and that's not just us, as Roman just alluded to. That's basically everyone expecting this rate hike, including also the market members of the Governing Council were quite clear on this over the last couple of weeks. A June hike is the most appropriate thing to do now given that inflation dynamics did not go into the right direction since the energy price shock happened. Basically, yeah. I mean, we talked about this in the past, Bernadette. Even if the ECB would have had a more kind of a look through approach in the past for such a supply driven inflation narratives, they can't afford to do that just now after the inflationary period that we went through over the last year. So basically a precautionary hike is almost a certainty today.

[A]

All right then, so sounds like a done deal for today. What are you watching for then? Or what do you expect beyond today's policy action?

[D]

Yeah, that's actually the crucial question. So what's beyond? To cut it short, we expect today the one and only hike. So not more hikes after that. That's certainly less than what the market expects. So where we have expectations to go for more like a total up to three hikes over the next month. The main reason is the growth momentum that is already weakening again in this eurozone and this for us kind of calls for a more cautious approach in terms of how many hikes you really want to get through. If you look at data data surprises are once again negative in the Eurozone. And importantly, we also don't see this kind of crowding in investment from the private sector on the back of this German fiscal push that we are seeing. So only one hike that we expect and what I'm watching today more closely to validate this EU is certainly the language and also their update on the staff projections and also the scenarios there. So what's the council assuming for now specifically in terms of how lasting the inflation push shock will be on that

[A]

basis, is there any direct impact on how you would recommend bond investors to position themselves?

[D]

Well, ironically, I mean, even as there will be almost certainly a hike today in combination with the growth momentum that is weakening just alluded to, and the market's pricing, we believe that yields in Euro have even more reasons to fall at some point. So in other words, we like to have some duration overweight more broadly, but feel even more comfortable with that position with quality Euro bonds.

[A]

Super very clear message from you today, Dario. Thank you very much for joining us.

[D]

Thank you for inviting me, Bernadette.

[A]

And so that's the end of today's show. I'd like to say thanks again to my speakers this morning and thank you all for tuning in. If you enjoyed today's episode and you haven't yet subscribed, please don't forget to do so. And please consider leaving us a review on your preferred podcast platform. Do join us again tomorrow when Luzia Cuculovic will be your host and she'll be here to talk with more of our experts about what's moving markets. Meanwhile, good luck today and goodbye for now.

[E]

The information and opinions expressed in this podcast constitute marketing material and are not the result of independent financial or investment research. Please refer to www.juliusbear.com legal forward/podcasts for further other important legal information.