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Gold falls after a two-month high due to oil and hawkish Fed outlook
Gold prices fell on Thursday, after rising more than 4% the previous session. A surprise U.S. Treasury "liquidity" move pushed down bond yields as well as the dollar. Meanwhile, rising oil prices and hawkish Fed signaling prompted profit taking. By 1140 GMT, spot gold had fallen 0.9% per ounce to $4479.12. Bullion was earlier at $4,525.79, after prices rose to a two-month high on Wednesday. U.S. Gold Futures slipped?0.2% to $4,535.70. Treasury Department announced on Wednesday that it will double its liquidity-support buyback operation for longer-dated bonds and notes, helping to ease the pressure in the bond markets. The U.S. Dollar?was hovering around three-month lows. Ricardo Evangelista, senior analyst at ActivTrades, said that the lower prices this morning were a temporary correction and not the start of a downward trend. He said that the outlook for the next few weeks will be largely determined by the Federal Reserve's policy and the developments in the Persian Gulf. The minutes of the Fed's last meeting revealed that inflation concerns have intensified, and several policymakers are prepared to increase interest rates. The price of oil hit a three-week high on Thursday, amid fears that the U.S. and Iran war impasse would continue to disrupt Middle East supply. This comes after President Donald Trump warned against economic consequences for any nation providing Iran with "any type" of lifeline. The total U.S. outstanding debt surpassed $40 trillion for the?first time, causing new warnings about a fiscal emergency. According to the CME FedWatch tool, traders are pricing in a 67% chance of a Fed Hold in September. Morgan Stanley believes gold will exceed $5,000 per ounce by 2027. It could even be sooner as the Fed is expected to remain?on hold. However, it said that U.S. inflation figures may drive volatility, while low COMEX'short positions' limit further gains from?short covering. Gold is often regarded as an inflation hedge. However, increasing interest rates tend to make the metal less appealing. Silver spot fell by 0.4%, to $66.63 an ounce. Platinum dropped by 0.5%, to $1815.57, and palladium was down 0.1%, to $1331.00.
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India's infrastructure production rose 5.4% year-on-year in July
According to the second release of a revised series, India's infrastructure production increased?5.4% on an annual basis in July. However, it slowed a little from the previous months, as the output of iron ore and electricity moderated. The new series, released by the government last month, replaces 2011-12 as the base-year and expands core sectors to nine from eight industries, including iron ore. According to data from the government, infrastructure output increased by a revised 6 percent in June compared with a year ago. KEY NUMBERS * Cement production increased 13.1% from a revised increase of 9.9% in June. * Steel production grew?2.9% in July, compared with a revised growth of 5.6%?in June. * Electricity production?rose by 9% in July compared with a revised increase of 11.4% in June. * The coal production increased 7.6% in July compared to an increase of 1.4% in the previous month. * Iron ore production increased 29.5% from a revised increase of 44.5% during June. * Crude oil production fell by 5.3% in July compared with a drop of 4.2% in the previous month. * Fertiliser output declined by?8% in July, after a contraction of 3.3% in June. * The natural gas production fell 3.7% in July, compared with a revised decline of 4.8% in June. * The output of refinery products rose by 2.7% in July, compared to a revised 4.0%?fall one month earlier. * The cumulative infrastructure output growth for April-July has increased from 1.5% to 4.3% in comparison with the same period last year.
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Norway's Equinor signs a three-year agreement with Poland's Orlen
The Norwegian company Equinor announced on Thursday that it had signed a contract for a period of three years to supply oil from western Europe's largest producing field Johan 'Sverdrup. Equinor announced that the contract will begin in September and allow for deliveries between 5 million metric tonnes and more than nine million tons. The deal is flexible, and allows for different Norwegian grades. However, Johan Sverdrup’s medium-heavy oil?is an excellent substitute for Russian Urals which historically Lithuanian or Polish refineries were designed to process. Since Russia's war against Ukraine began in?2022, European nations have slowly stopped using Russian energy. Orlen stopped purchasing?any Russian crude oil last year, when it ceased purchases for its Czech division. Orlen's chief executive, Ireneusz Fafara, said that the agreement was a response to global instability. It also demonstrated that energy sector resilience is built by a long-term partnership with partners who provide predictable supplies and operational stability. The contract stipulates that the greater quantity would be delivered in Lithuania, Poland, and the Czech Republic. This would make Equinor Orlen’s second largest supplier, after Saudi Aramco which supplies around 40% of crude oil processed by Orlen. According to estimates, the contract covers about 20% of Sverdrup’s output. Reporting by Louise Rasmussen and Nerijus Adomiaitis; writing by Marek Strazelecki; editing by Terje Sollvik and Barbara Lewis
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Copper prices fall as inventories rise; weaker dollar provides support
The copper price?fell on Thursday, as more stocks arrived at?warehouses. However, losses were minimal due to the weaker dollar following a move by the U.S. Government?to calm down bond markets. Benchmark 'three-month' copper on the London Metal Exchange fell 0.4% to $13,988 per metric ton at 1025 GMT after adding 0.5% the previous session. LME copper reached a six-month high on Monday due to concerns about low inventories. However, since then the price has eased as metal is now flowing into storage facilities. The Treasury's announcement of yesterday's copper buyback helped stop the decline that we saw as inventories began to return to LME, said Ole Hansen. He is the head of commodity strategy at Saxo Bank. The announcement is a very strong one and indicates the possibility of a weaker dollar in the future. The announcement also shows that there is a competition among investors to fund debt and also hard assets. Copper has been at forefront of this recently. The dollar index dropped to a 3-month low as the Treasury Department acted to calm down a bond-market selloff which had driven long-end yields up to their highest level since 2007. The weaker dollar means that commodities priced in U.S. dollars are cheaper for buyers of other currencies. The Shanghai Futures Exchange's most traded copper contract edged up 0.2% to 107200 yuan (15,943.13) per ton. Data showed that LME inventories increased by another?3,950 tonnes, bringing gains for the week to 17%. On-warrant stocks of copper, meaning that metals not already designated for?warehouse removal' on the LME The prices of most items have risen by over?50% in the last week but remain less than half the levels they were three months ago. Other metals include LME aluminium, which?lost 1.1% at $3,196 per ton, and nickel, which?shrank 1.3% to $15,890. Zinc gained 1.2%, to $3.751, while lead increased 0.1%, to $1,890, and tin rose by 0.3%, to $55,705.
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Sources say that Indian Oil is close to signing a LPG import agreement with Algerian Sonatrach in 2027.
Indian Oil Corp., the top refiner in India, has signed a contract with Sonatrach of Algeria to import LPG from 2027. India is diversifying its sources of LPG (mainly used for cooking) to reduce its dependence on the Middle East. The recent blockade of energy flows in the Strait of Hormuz forced the South Asian nation, which was forced to ration LPG supplies, to rely less on Middle Eastern suppliers. IOC will lift one large?gas container containing between 45,000 and 55,000 metric tonnes of LPG (a mixture of propane?and butane) every month. IOC had a contract with Sonatrach for a period of time until a few?years ago, but then switched to purchasing?from the Middle East. A second source confirmed that the LPG prices in Algeria are lower than Saudi Aramco's Contract Price. The deal between IOC and Sonatrach, however, is to lift the cargoes free-onboard. IOC and Sonatrach have not responded to emails seeking comments. According to preliminary LSEG trade flow, India is expecting to receive 110,000 tons of LPG in August. India has 'increased their?intake?of U.S. LPG in order to offset the loss Middle Eastern supplies while encouraging customers to switch to piped gas. Sources said last month that India will buy up to a quarter (25%) of its LPG imported from the United States by 2027. Sources said that the three state-owned?retailers – Indian Oil Corp., Hindustan Petroleum Corp. and Bharat Oil Corp. – are expected to launch a joint bid to import LPG imported from the U.S.
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Investors take profit after gold's recent rally.
Gold prices fell on Thursday after a?4?% gain in the previous session. A surprise U.S. Treasury move to increase liquidity pushed bond yields down and the dollar, while higher oil prices and hawkish U.S. Fed signaling prompted profit taking. By 0946 GMT, spot gold had fallen 0.7% per ounce to $4487.93. Bullion prices were at $4,525.79 earlier, after they reached a two-month high on Wednesday. U.S. Gold Futures were little altered at $4,544.50. Treasury Department announced on Wednesday that it would double its liquidity-support purchase operations for longer-dated bonds and notes, helping to ease the pressure in the bond market. The U.S. Dollar was hovering around three-month lows. Ricardo Evangelista, senior?analyst at ActivTrades, said: "I'd describe the lower prices this morning as a short term?correction and not the start of a broader downtrend." He said that the outlook for the next few weeks will be largely determined by expectations about Federal Reserve policy, and the developments in the Persian Gulf. The minutes of the Fed's last meeting revealed that inflation fears had intensified, and several policymakers were prepared to increase interest rates. The oil prices rose to a three-week high on Thursday, amid fears that the Iran conflict impasse would continue to disrupt Middle East supplies. This was after Trump warned about economic consequences for any nation providing Iran with "any kind of lifeline." The total U.S. outstanding debt surpassed $40 trillion for the very first time. This prompted new warnings about fiscal crisis. According to the CME FedWatch tool, traders are currently pricing in a 67% probability of a Fed Hold in September. Morgan Stanley believes that gold will surpass $5,000 per ounce by 2027, and possibly sooner, because the Fed is expected to remain on hold. However, it said that U.S. inflation could cause volatility, while low COMEX-short positions limit the scope for short-covering gains. Gold is generally viewed as a hedge against inflation, but rising interest rates have a tendency to make it less attractive. Silver spot fell 0.4% per ounce to $66.68, platinum slid 1.5% to 1,797.77 and palladium dropped 0.2% to 1,323.86.
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Fuel shortages in Moscow have returned, and drivers are faced with long queues at the fuel stations.
This week, disgruntled Moscow motorists waited in long queues at 'gasoline stations to fill up their cars with limited fuel. It was the second wave of the 'crisis due to high seasonal demand and Ukrainian strikes against oil refineries. Witnesses and fuel suppliers report that fuel stations in Moscow have set new limits on the purchase of gasoline due to fuel shortages. In May, shortages began to grow and spread throughout most Russian regions in July. However, fuel stations in Moscow were able ease an earlier round of restrictions. Ukraine has targeted Russian oil refineries to reduce energy revenues and undermine Moscow's war efforts. The queues at the gas stations can be as long as a kilometer. Witnesses also reported long queues at filling stations, with some extending up to one kilometer (0.6 miles) in Moscow and the surrounding area. Many other stations also had closed their doors or only offered diesel. We have visited five petrol stations and still there is no fuel. Fuel was available last week. "Now, fuel is unavailable again," said a German resident of Moscow who refused to reveal his full name. Marat, a taxi driver, complained as well. "Everything's very bad." You'd need to drive the length of Moscow in order to find fuel. Even in this situation, you will not find any fuel. You'll have to wait two or three hours." Other motorists have downplayed the shortages. Artur, a resident of Moscow, stated, "I believe everything will return to normal in a few weeks." In order to boost the domestic supply, Russian authorities?banned gasoline and diesel exports,?assuaged fuel quality requirements, and?started importing petroleum products. On Wednesday, Russian Deputy Premier Alexander Novak confirmed that Russia had begun importing fuel. Normally, Russia is a net oil and fuel exporter. (Reporting and Editing by David Holmes).
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Monte dei Paschi CEO to unveil strategy to fend off Intesa's EUR36 billion bid
Three people familiar with the matter have confirmed that Monte dei Paschi di Siena CEO Luigi Lovaglio is preparing to present a strategy to the Italian board of directors on Thursday to counter the EUR36 billion bid from Intesa Sanpaolo, the bank's bigger rival. Analysts suggest that MPS can use an asset it acquired by taking over Mediobanca in 2025, a 13% share of Italy's largest insurer Generali. It could also draw from its cash reserves to boost returns to its shareholders and counter Intesa's EUR3 billion?in cash offer. Analysts have stated that the Generali stake, worth EUR8.5 billion, could be traded or sold for another asset. MPS CEO Luigi Lovaglio refused to give any details on an analyst call held on August 7. Lovaglio had previously been ruled out of selling the Generali stake by people familiar with his plans. MPS explored a possible deal with Banco BPM in order to stop?Intesa from taking over. However, the two banks announced on July 31 that they had ended their discussions after Credit Agricole France, BPM's largest investor, expressed its disapproval. One of the sources stated that the board began its meeting at 0700 GMT in order to discuss options. BREAK-UP Intesa will retain Mediobanca and the Generali stake as well as roughly half of MPS’s branch network. The other half has been sold to address antitrust concerns. Lovaglio criticised the plan and said it would destroy value. Prime Minister Giorgia meloni expressed her hope that MPS might not be "dismembered", even though she insisted that the government was playing no active role. Intesa’s unsolicited offer of cash and shares in June was the latest in a wave of consolidation that has reshaped Italian Banking over the last 21 months. Italian banks spent years restructuring to reach record profits when interest rates began to rise in 2022. MPS was the poster child of the overhaul. After being rescued by the government in 2017 and then?reprivatised between 2023 and 2024, Generali bought Mediobanca for EUR16 billion in a hostile bid and took control of Generali's prized stake. MPS's largest shareholders are Delfin - the investment vehicle for the Del Vecchio business family, an eyewear dynasty - and Francesco Gaetano Caltagirone, a construction magnate. Both are major Generali investors. Intesa made its bid as UniCredit was busy taking over Commerzbank in Germany. UniCredit also acquired a Generali stake in recent months, which it referred to as a financial asset. (Reporting and editing by Elaine Hardcastle, Giulio Pioloavaccari, Andrea Mandala)
Transport emissions of Inditex, Zara's owner, will increase in 2024
Inditex, Zara's owner, increased its emissions from transport by 10% between 2024 and 2024. This is because Zara used more flights in order to move clothing from its production centres in Asia to the logistics hub in Spain to get it into stores.
This increase is a result of increased air freight usage. Attacks on container ships at the Red Sea forced vessels to divert from the Suez Canal to a longer route around Africa in order to transport goods from Asia. As a result, shipping emissions have increased.
Inditex's annual report, published on Friday by Inditex, stated that emissions from upstream transport and distribution were 2,614,230 tons of CO2eq in its 2024 financial period ending January 31. This is an increase of 10% from the 2,378,464 tones in 2023.
Inditex didn't give any reason in the report for the rise. The company didn't immediately respond to a comment request. In November, it was reported that Inditex had increased its use air freight to transport products from its factories in India and Bangladesh - two important manufacturing hubs - to its Zaragoza logistic hub in Spain in order to avoid shipping delays which could hinder its ability to quickly get trendy clothes into the stores.
Inditex previously stated that it was working to reduce transportation emissions by using measures such as alternative fuels, optimising routes and container occupancy rates. The retailer owns Bershka and Massimo Dutti brands. It reported on Wednesday a 10.5% increase in 2024 sales, currency adjusted, of 38.6 billion euro ($42.06billion).
The company's greenhouse gas emissions in 2024 were the same as in 2023. This was due to a decrease in emissions related to its product sourcing category, which is its largest emissions category.
Inditex said that the reduction in emissions from "purchased products and services" was 6%. They went from 7,102.152 tonnes to 6,696,995 tons of CO2 equivalent. This is due to Inditex buying more textiles with a low environmental impact. Inditex reported that 33% of the fibres and raw material used by Inditex in 2024 will come from post-consumer waste, up from just 18% in 2013.
The retailer has not made any progress in reducing indirect emissions, including the category of purchased goods and services.
Inditex aims to reduce its "scope 3", or supply-chain emissions, by 51% in 2030, and by 90% by 2040 compared with 2018 levels.
Inditex's scope three emissions in 2024 will be 13,427.762 tonnes CO2 equivalent. This is a small increase from the level of 2013,421,935, as reported by the annual report.
The report published milestones that showed by 2030, it would need to reduce that number to 4,916,311 tons, and by 2040, to 1,003,329 tones to meet the targets approved by the Science Based Targets Initiative. This global nonprofit assesses and reviews companies' climate goals.
(source: Reuters)