Morning Note: Tencent's Report in Focus; Gold Affected by Trade Optimism; Oil Stable

Tencent Set to Report Q1 Results

Tencent Holdings Ltd. (TCEHY) is set to release its first-quarter 2025 results today. The consensus estimate for earnings stands at $0.88 per share, unchanged over the past 90 days, reflecting a year-over-year growth of 18.92%. Revenue is projected to reach $24.26 billion, representing an 8.89% increase from the same period last year. Tencent has consistently outperformed earnings expectations over the past four quarters, delivering an average earnings surprise of 11.65%.

The company's performance in the first quarter is expected to have been driven by sustained momentum across its core segments, including gaming, advertising, fintech, and AI infrastructure. In the domestic gaming sector, strong engagement from long-standing titles such as Honor of Kings, Peacekeeper Elite, and Valorant, along with contributions from new releases like DnF Mobile and Delta Force, likely continued to support growth following a robust fourth quarter in 2024.

(Tencent Holding Ltd Share Price, Source: Trading View)
From a technical analysis perspective, Tencent's share price has been moving in a bullish trend, as indicated by the formation of higher highs and higher lows within an ascending channel. Recently, the price rebounded from the support zone of 53.00 – 54.50 and the lower boundary of the channel, pushing the price upward with bullish momentum. This valid structure may drive the price upward to retest the resistance zone at 71.50 – 73.00.

Gold Slips as U.S.-China Tensions Ease

Gold prices declined during Wednesday’s Asian trading session, retreating from gains the previous day, as improving U.S.-China trade relations dampened their perceived safe-haven demand. The two nations agreed to a 90-day mutual tariff reduction, alleviating market fears about the prolonged economic impact of the trade dispute. However, the U.S. inflation data showed the annual rate easing to 2.3% in April, its lowest level since February 2021 and below the expected 2.4%. The softer inflation reading bolsters the appeal of non-yielding assets like gold, increasing the likelihood of interest rate cuts by the Federal Reserve.

(Gold Price 12H Chart, Source: Trading View)
From a technical analysis perspective, the gold price is currently moving within a range between the support zone of 3,195 – 3,215 and the swap zone of 3,280 – 3,300. A break below the support zone would indicate that bearish pressure has regained control, potentially pushing the price lower. Conversely, if the price breaks above the swap zone, it suggests that bullish momentum remains intact, potentially driving the price higher.

Oil Holds Gains on U.S.-China Tariff Deal

Oil prices hovered near two-week highs, buoyed by a temporary tariff reduction agreement between the U.S. and China, which eased trade tensions and improved the global demand outlook. Additional support came from a reported decline in U.S. fuel inventories, signalling strong consumption. According to recent data, gasoline stocks fell by 1.4 million barrels, while distillate inventories dropped by 3.7 million barrels, reinforcing confidence in sustained fuel demand.

Meanwhile, the market is closely monitoring U.S. President Donald Trump's visit to the Gulf region. He began the trip with an appearance at an investment forum in Riyadh, where he announced lifting long-standing sanctions on Syria and secured a $600 billion investment commitment from Saudi Arabia. A key focus of the visit is to prevent oil price spikes during the upcoming summer travel season. The U.S. may capitalise on lower prices by increasing purchases of Middle Eastern crude for its Strategic Petroleum Reserve.

(Crude Oil Futures Daily Chart, Source: Trading View)
From a technical analysis perspective, crude oil futures have rebounded from the support zone of 55.30 – 56.10, formed a significant double-bottom candlestick. Currently, it is retesting the resistance zone of 63.00 – 63.80. If it breaks above this resistance, it may potentially surge higher and retest the order block at 66.00 – 66.60. Conversely, if bearish pressure prevents it from breaking out the resistance zone, it may be drop lower.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.