Gold falls from US$3,500, yield curve flattens: What’s next for commodities, Bitcoin and bonds?

Gold falls from US$3,500, yield curve flattens: What’s next for commodities, Bitcoin and bonds?

Treasury Secretary Scott Bessent’s comments on an expected de-escalation in the US-China tariff standoff, coupled with President Donald Trump’s confirmation that he will not seek to remove Federal Reserve Chair Jerome Powell, have injected a dose of stability into markets reeling from recent turbulence.

Meanwhile, equity markets, particularly in the US, Hong Kong, and Japan, have rallied on hopes of trade resolutions, with standout performances from companies like Tesla. In the foreign exchange markets, the US dollar has staged a rebound, while commodities like gold have pulled back from record highs, and the fixed-income market shows signs of a flattening yield curve.

These developments, set against the International Monetary Fund’s (IMF) warnings of slowing global growth due to US tariffs, paint a picture of an interconnected world navigating uncertainty with cautious hope. Below, I offer my perspective on these macroeconomic, equity, currency, commodity, and fixed-income trends, grounded in the latest data and market signals.

As articulated by Bessent, the prospect of de-escalating US-China trade tensions is a pivotal development that could reshape global markets. Bessent’s assertion that the current tariff standoff—marked by US tariffs on Chinese goods at 145 per cent and China’s retaliatory duties at 125 per cent—is “unsustainable” reflects a pragmatic recognition of the economic toll on both nations. His comments at a closed-door JPMorgan Chase investor summit sparked a 2.5 per cent surge in the S&P 500, signalling market relief at the possibility of reduced trade frictions.

However, skepticism from sources like Fox Business Network’s Charles Gasparino, who suggested Bessent’s optimism may be overstated, underscores the challenges ahead. As Bessent noted, negotiations with China are likely to be a “slog,” with no formal talks yet underway. The US-China trade war has already disrupted global supply chains, fuelled inflation, and contributed to the IMF’s downward revision of global growth to 2.8 per cent for 2024 and US growth to 1.8 per cent for 2025.

A de-escalation could alleviate some of these pressures, but the path forward is complex. China’s vow to “fight until the end” and its recent 84 per cent tariffs on US goods suggest a hardline stance, though Bessent argues China holds a “losing hand” due to its export-heavy reliance on the US market.

I am cautiously optimistic: while both sides have incentives to negotiate—China to protect its export-driven economy and the US to curb inflation and market volatility—the entrenched positions and domestic political pressures on both leaders could delay meaningful progress. As noted by Politico, the White House’s reported progress on trade deals with Japan and India offers a potential blueprint for bilateral resolutions that could ease global trade tensions if applied to China.

Trump’s decision to retain Federal Reserve Chair Jerome Powell is a stabilising force for markets, particularly after months of public criticism from the president. Trump’s earlier calls for Powell to cut interest rates aggressively, including a social media post demanding, “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS,” had raised fears of political interference in monetary policy.

His confirmation that he has “no intention of firing” Powell, reported by Reuters, has calmed investor concerns about central bank independence, a cornerstone of US economic stability. Powell’s tenure has been marked by a cautious approach to inflation, which recently fell to 2.4 per cent in March 2025, below expectations of 2.6 per cent. This data, combined with Trump’s softened rhetoric, suggests the Federal Reserve can continue its data-driven approach without the spectre of political upheaval.

However, the IMF’s warning that US tariffs could reignite inflationary pressures complicates the Fed’s path. My take is that Powell’s retention is a net positive for markets, as it preserves institutional continuity and reduces the risk of abrupt policy shifts. Yet, Trump’s ongoing pressure for lower rates could create friction, especially if tariff-induced inflation forces the Fed to maintain or raise rates, potentially clashing with the administration’s growth agenda.

The US has seen a robust rebound in the equity markets, driven by optimism over trade negotiations and Bessent’s comments. The S&P 500’s 2.5 per cent climb, the Nasdaq 100’s 2.6 per cent rise, and the Dow’s 1,000-point gain reflect a market eager for positive signals amid recent volatility. The Cboe VIX Index, a measure of market fear, remains elevated at 31, indicating lingering uncertainty, but the rally suggests investors are betting on a softer US trade stance.

Tesla’s five per cent stock surge, fueled by renewed confidence in CEO Elon Musk’s focus on the company, is a standout. As a business leader and a vocal supporter of Trump’s policies, Musk’s influence has amplified Tesla’s market narrative, particularly as tariffs on Chinese electric vehicles could bolster domestic producers. In Hong Kong, the Hang Seng Index’s 0.8 per cent rise to 21,562, supported by China’s “national team” and retail investors, reflects resilience despite tariff pressures.

Japan’s Nikkei 225 and Topix indices, up over two per cent have been buoyed by Wall Street’s rebound and signals of easing US-China tensions and Japan’s private sector growth. In my opinion, these equity gains are fragile, hinging on the success of trade negotiations.

The IMF’s downgraded growth forecasts for the US, Mexico, China, and the Eurozone serve as a reminder that tariffs have already inflicted economic damage, and any misstep in diplomacy could reverse these gains. Investors should remain vigilant, as the market’s optimism may outpace the reality of protracted trade talks.

The foreign exchange market has seen a notable rebound in the US dollar, with the DXY index nearing 99.5, while the euro has slipped below 1.14. This dollar strength is likely driven by renewed confidence in US economic stability following Trump’s Powell decision and Bessent’s de-escalation comments. The dollar’s earlier 5.8 per cent decline in 2025, as reported by Reuters, reflected fears that tariffs would undermine US growth. Still, the rally suggests markets are reassessing the US as a relative safe haven.

The euro’s weakness, meanwhile, stems from the Eurozone’s exposure to US tariffs and internal divisions over retaliation strategies, with countries like France advocating for aggressive countermeasures and others, like Ireland, favouring restraint. The dollar’s rebound is temporary, as tariff-related uncertainties and global growth concerns could cap its upside. The euro’s decline may persist if the European Union fails to present a unified front, but a successful negotiation with the US could stabilise the currency.

In commodities, gold’s retreat from a record high of US$3,500, as reported by Reuters, reflects a shift away from safe-haven assets as trade tensions ease. Gold’s 1.5 per cent decline on April 22, 2025, aligns with the equity market’s rally and the dollar’s strength, though its earlier surge to US$3,167.50 amid tariff fears underscores its role as a hedge against uncertainty.

Canada’s industrial producer prices, up 0.5 per cent in March 2025, driven by non-ferrous metals and wood products, highlight commodity-specific dynamics, though falling energy prices, particularly diesel, signal demand concerns. Gold’s pullback is a healthy correction, but its long-term trajectory remains upward given persistent geopolitical risks and inflationary pressures from tariffs. Investors should monitor commodity trends closely, as they offer insights into global demand and trade dynamics.

The fixed-income market’s flattening yield curve, particularly around the stable 5-year sector, is a critical signal of market expectations. The 10-year Treasury yield’s slight easing to 4.3949 per cent, as reported by Reuters, reflects concerns about slower growth, though tariff-induced inflation fears drove earlier spikes to 4.06 per cent.

A flattening yield curve often precedes economic slowdowns, and the IMF’s growth warnings reinforce this narrative. The current yield curve reflects a market grappling with mixed signals: optimism about trade de-escalation versus fears of tariff-driven inflation and recession. Fixed-income investors should remain cautious, as the Fed’s next moves will hinge on inflation data and trade outcomes.

Cryptocurrencies, meanwhile, have mirrored equity market optimism, with Bitcoin hovering around US$92,800 after a 9.75 per cent rally, eyeing a US$95,000 target. Ethereum’s 11.19 per cent surge to US$1,780 and Ripple’s recovery suggest a broader risk-on sentiment.

The Relative Strength Index (RSI) for both Bitcoin (65) and Ethereum (54) indicates bullish momentum, but potential support levels at US$85,000 for Bitcoin and US$1,700 for Ethereum warrant caution. I think crypto’s rally is tied to broader market dynamics, particularly the dollar’s movements and trade optimism, but its volatility demands careful risk management.

In conclusion, the global economy stands at a crossroads, with Bessent’s de-escalation hopes and Trump’s Powell decision offering a reprieve from recent turmoil. Equity markets, currencies, commodities, and fixed-income trends reflect a delicate balance of optimism and caution. While markets have rallied on positive signals, the IMF’s growth warnings and the complexity of US-China negotiations suggest that volatility will persist.

My outlook is guarded optimism: progress on trade and monetary policy stability could pave the way for recovery, but investors must brace for bumps along the road. The interplay of these factors will shape the economic narrative for the remainder of 2025, and staying informed will be key to navigating this dynamic landscape.

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j

Unveiling the Potential of LSD-fi: Liquid Staking and Yield Generation Explored

Unveiling the Potential of LSD-fi: Liquid Staking and Yield Generation Explored

Introduction

Innovative platforms and strategies have emerged within the dynamic world of decentralized finance (DeFi), empowering cryptocurrency holders to maximize their earnings. One particularly captivating concept is LSD-fi, an abbreviation for Liquid Staking and Yield Generation. LSD-fi encompasses a diverse range of DeFi platforms and strategies that enable users to stake their tokens and earn liquid staking tokens (LSTs) while optimizing their potential for generating yield.

DeFi Liquid Staking Providers: Staking Tokens for Security and Rewards

At the core of the LSD-fi ecosystem, DeFi platforms serve as the fundamental infrastructure that facilitates user token staking. Token staking involves securely locking tokens in smart contracts and actively contributing to the consensus mechanism of the blockchain network. This active contribution plays a crucial role in ensuring network security by validating transactions and maintaining the integrity of the blockchain.

When users stake their tokens, they assume the roles of validators or delegators, depending on the specific staking mechanism employed by the blockchain. Validators propose and validate new blocks, while delegators choose validators to stake their tokens on their behalf. Both validators and delegators play vital roles in ensuring the smooth operation and security of the network.

As a reward for their active participation in staking, users receive LSTs. These tokens represent the assets staked by users and hold various applications within the DeFi ecosystem. It possesses intrinsic value and can be traded, sold, or held by users. They serve as a form of proof of stake (PoS), providing evidence of ownership and contribution within the network.

Participating in governance decisions is a significant advantage of holding LSTs. Many PoS-based blockchain networks allow token holders to engage in voting and decision-making processes that shape the network’s future development and governance. By possessing the tokens, users gain a voice and the opportunity to influence the direction and policies of the underlying blockchain project.

It grants users access to additional services within the DeFi ecosystem. Certain platforms exclusively offer extra functionalities, such as decentralized exchanges, lending protocols, or liquidity pools, to LST holders. These services broaden users’ opportunities to generate more yield or participate in specific DeFi activities.

Additionally, holding LSTs presents the potential for future value appreciation. As the adoption and utility of the underlying blockchain network grow, the demand may increase, leading to a rise in their market value. Users who retain can benefit from capital appreciation if the value of these tokens increases over time. This potential for value appreciation provides users with an added incentive to engage in staking activities and hold onto their LSTs.

Centralized Exchange Staking Providers: Broadening Accessibility with Centralized Exchanges

Centralized exchanges (CEXs) have played a pivotal role in making liquid staking more accessible to a broader audience. Renowned for their user-friendly interfaces and established reputation, these exchanges recognize the potential of staking and integrate staking services into their platforms.

By offering staking services, they simplify the staking process for users, eliminating the need for complex technical knowledge or navigating multiple decentralized platforms. The familiar interface and user experience attract experienced cryptocurrency traders and newcomers to the world of DeFi.

The convenience provided by staking through CEXs is a significant advantage. Users can stake their tokens directly from their exchange wallets, eliminating the need to transfer tokens to external wallets or interact with smart contracts. This streamlined process reduces the risks of managing private keys or unfamiliar interfaces.

It also offers additional benefits to stakers, such as enhanced security measures and customer support. These exchanges have well-established security protocols to safeguard user funds and prevent potential hacks or security breaches. Additionally, their dedicated customer support teams are readily available to assist users with issues or concerns related to staking activities.

Another notable advantage of staking is the increased liquidity and tradability it provides. By staking tokens on these exchanges, users receive staking rewards in the form of LSTs. They can often be traded directly on the exchange, enabling users to manage their staked assets while still earning rewards. This liquidity empowers users to seize opportunities, such as buying or selling other cryptocurrencies or taking advantage of market fluctuations, without the need to unstake their tokens and wait for the unstaking period to complete.

Likewise, the integration of staking services allows users to diversify their investment strategies. Users can allocate their tokens to the exchange’s different staking options, spreading their risk across various projects or protocols. This diversification helps mitigate the impact of potential adverse outcomes on a single staking endeavor and allows users to optimize their yield generation.

Collateralized Debt Position (CDP) Staking: Unlocking Liquidity with CDP Staking

In DeFi, specific protocols have introduced an innovative mechanism known as CDP staking. This mechanism allows users to utilize their LSDs as collateral, unlocking the potential to generate stablecoins. By leveraging their LSD holdings, users can mint stablecoins, cryptocurrencies with a stable value pegged to an underlying asset or currency.

CDP staking involves users locking their LSDs as collateral within the DeFi protocol. This trustless and transparent mechanism ensures that the locked LSDs guarantee the stability of the generated stablecoins. The locked assets act as a guarantee, assuring the protocol that the staked assets fully back the stablecoins minted.

Generating stablecoins through CDP staking offers users several advantages. Firstly, stablecoins provide stability in the otherwise volatile cryptocurrency market. Their value is typically pegged to a stable asset, such as a fiat currency or a basket of assets, ensuring a relatively constant value. This stability enables users to utilize stablecoins for various purposes, including conducting transactions, hedging against market fluctuations, or accessing other DeFi protocols and investment opportunities.

Also, the availability of stablecoins enhances the overall liquidity of users’ portfolios. Users can employ these stablecoins as a medium of exchange or collateral in other DeFi protocols, opening up possibilities for borrowing, lending, or participating in liquidity pools. This expanded liquidity allows users to seize opportunities and explore different avenues within the DeFi landscape without compromising their staked assets.

CDP staking serves as an effective tool for users to access the value of their staked assets intelligently. By minting stablecoins and retaining their staked assets as collateral, users strike a balance between liquidity and participation in the staking ecosystem. This feature allows users to capitalize on market opportunities, manage their financial needs, and explore diverse DeFi applications while maintaining exposure to the potential benefits and rewards of staking.

Index LSD Staking Strategies: Amplifying Returns with Index LSD Staking

Index LSD staking strategies form an integral part of the LSD-fi ecosystem, too, empowering users to amplify their earnings by staking tokens and earning specific LSDs tied to a particular project or protocol.

This kind of staking allows users to increase their LSD holdings, potentially amplifying the returns on their staked assets. Such staking involves diversifying staked tokens across multiple projects or protocols rather than focusing solely on a single endeavor. This diversification strategy serves two important purposes: optimizing yield generation and reducing risks associated with individual projects.

Users increase their exposure to broader opportunities within the LSD-fi ecosystem by staking tokens across multiple projects. Each project or protocol within the index represents a unique avenue for potential growth and earnings. This diversification allows users to benefit from the success of multiple projects simultaneously, increasing the likelihood of capturing lucrative returns.

Adding on to my above points, I want to say that diversification mitigates the risks associated with individual projects. In the volatile and rapidly evolving landscape of DeFi, not all projects or protocols may achieve the same level of success or provide consistent returns. By staking tokens across multiple projects, users spread their risk exposure and reduce the impact of potential underperformance or failures of any single project. This risk mitigation strategy helps safeguard users’ investments and provides a more balanced and resilient approach to earning returns.

The strategies often rely on predefined indices curated by experts or governed by decentralized autonomous organizations (DAOs). These indices typically comprise projects or protocols that meet specific criteria or adhere to a common theme, such as a particular industry sector or technological focus. The selection and composition of the index are designed to optimize yield generation by including projects with strong growth potential and promising prospects.

By participating, users align their investments with the collective intelligence and expertise behind the curated index. This approach leverages the knowledge and research of index creators to identify and include projects with favorable prospects. Users can benefit from the expertise of index curators and tap into the potential of diverse projects, increasing their chances of earning attractive yields.

Money Markets and Borrowing with LSD Tokens: Accessing Liquidity and Investment Opportunities

Money markets are also known to be a key component. These money markets operate as lending protocols within the LSD-fi ecosystem, allowing users to use their LSD tokens as collateral to borrow other tokens. This feature offers users increased liquidity while allowing them to earn rewards from their staked tokens.

By leveraging their LSD holdings as collateral, users can unlock additional funds that can be used for various purposes within the DeFi space. For example, users can use these borrowed funds for further investments, exploring new projects or opportunities aligning with their investment strategies. The borrowed funds can be employed to participate in yield-generating activities, such as liquidity mining or yield farming, which can further enhance users’ overall earnings within the LSD-fi landscape.

Moreover, accessing additional funds through borrowing against staked LSD tokens gives users flexibility and agility in capitalizing on emerging opportunities within the dynamic DeFi space. The rapidly evolving nature of DeFi presents users with numerous possibilities, ranging from participating in new token launches to engaging in innovative yield strategies. Users can seize these opportunities and potentially generate higher returns by having access to borrowed funds.

Using borrowed funds from money markets can allow users to maintain their staked assets, ensuring they continue earning rewards and participating in the staking ecosystem. This means that users can benefit from the potential appreciation of their staked tokens and the rewards earned from staking while still having access to the value represented by their LSD holdings.

Closing

LSD-fi presents an exciting realm DeFi. Through DeFi platforms, users can stake their tokens, earn LSTs, and explore various strategies to generate yield. Whether through decentralized platforms, centralized exchanges, CDP staking, index strategies, or participation in money markets, users can unlock the untapped potential of their staked assets.

Token staking allows users to contribute to network security while earning rewards through LSTs actively. These tokens hold intrinsic value and offer users opportunities for trading, selling, and participating in governance decisions. Holding LSTs grants users access to additional services and potential value appreciation as the underlying blockchain network grows.

CEXs simplify the staking process, offering convenience, enhanced security, and increased liquidity and tradability of LSTs. CDP staking allows users to utilize their LSDs as collateral, unlocking liquidity by generating stablecoins. Index strategies enable users to diversify their staked assets, optimizing yield generation and reducing risks. Money markets and borrowing protocols provide opportunities for lending, borrowing, and earning interest on staked assets.

I think as the world of DeFi continues to evolve, the potential of LSD-fi remains to be fully explored. For example, new components like fusing it with NFTs could bring in new liquidity. NFTs represent unique digital assets and can be used as collateral or traded within decentralized lending and borrowing protocols. This opens up possibilities for leveraging the value of NFTs to access loans or earn interest. This will be for another time.

Overall, I hope users can understand that there are many opportunities. Take advantage of these innovative strategies and platforms to maximize their earnings, participate in the growth of decentralized networks, and embrace the exciting possibilities of DeFi.

The following is a guest post from web3 investor Anndy Lian.

 

Source: https://cryptoslate.com/unveiling-the-potential-of-lsd-fi-liquid-staking-and-yield-generation-explored/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j