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Gold prices rise on weaker dollar and US-China trade tensions
Gold prices rose on Wednesday, as a weaker US dollar and simmering tensions between the United States of America and China boosted demand for the metal. As of 0836 GMT, spot gold was up by 0.1%, at $3,355.46 per ounce. U.S. Gold Futures climbed 0.1% to $3,379.80. Gold is now more appealing to other currency holders due to the dollar index which measures currency in relation to six major currencies. Nitesh Sha, commodities analyst at WisdomTree, said: "I believe we are seeing similar concerns about trade talks. There is not much progress, and this is adding to the uncertainty over where tariffs may land. This is driving gold prices now." Donald Trump said that Chinese President Xi Jinping was tough and "extremely difficult to make a bargain with" on Wednesday, days after the U.S. president accused China of breaking an agreement to reduce tariffs and trade barriers. The U.S. tariff rates on steel and aluminum imports doubled Wednesday, as Trump escalates a global war of trade. He also expects his trading partners to make their "best offers" to avoid the imposition of punishing import taxes on other goods in early July. Focus will be placed on Friday's non-farm payrolls report in the United States for further clues about the Federal Reserve's future policy. Fed officials reiterated their cautious stance on policy, citing the risks of trade tensions and uncertainty. Carsten Fritsch, analyst at Commerzbank, said that if the data are stronger than expected then interest rate expectations will likely wane. This would have a negative impact on the price of gold. In the short-term, we see gold trading between $3,300 to $3,400 an ounce. In a low interest rate environment, gold, which is a safe haven during periods of economic and political uncertainty, tends thrive. Palladium fell by 0.4% and spot silver dropped 0.2%. Platinum rose 0.9%, to $1.083.22, while palladium was down 0.4%, to $1.006.49. (Reporting and editing by Brijesh Mukherjee and Anushree Patel in Bengaluru.
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Association: Some European auto suppliers have closed down following China's restrictions on rare earths
CLEPA, the European association of auto suppliers, said that several European auto supplier factories and production lines were shut down because of a shortage in rare earths due to China's restrictions on exports. CLEPA said that only one quarter of the hundreds requests for export licences submitted by auto suppliers between April 1 and now have been granted. Some requests were rejected due to "highly formal" reasons, according to the association. The process seems to differ from province to province, and IP-sensitive data has been requested in some cases, it stated. It added that if this was not done soon, then more plants could be affected as inventories run out in the coming weeks. China's decision to suspend the export of rare earths, magnets and other products in April has caused concern. Supply chains are being upended Prompting is a key concern for automakers, aerospace companies, semiconductor manufacturers and military contractors around the world. Industry groups In Germany, the U.S.A. and India are calling on politicians to lobby Beijing to find a quick resolution.
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Iron ore gains on short covering, but seasonal slowdown in demand limits gains
Iron ore futures prices rose on Wednesday as investors closed short positions in order to realize profits. However, the seasonal slowdown of demand limited gains. After hitting a two-month low on the previous day, the most traded September iron ore contract at China's Dalian Commodity Exchange closed daytime trading 1.37% higher. As of 0757 GMT, the benchmark July iron ore traded on Singapore Exchange was $95.2 per ton. Steven Yu, Senior Analyst at Mysteel, stated that prices have dropped dramatically over the last few days. Futures prices are now lower than spot price, meaning there is limited downside for futures on the short term. Yu said that "some shorts have resigned their positions because hot metal production is expected to be around 2.4 millions tons in June. A more dramatic price drop will only appear until fundamentals worsen further." As of May 30, the average daily hot metal production, which is a measure of iron ore consumption, fell by 0.7% compared to the previous week. It was now 2.42 million tonnes. Mysteel data shows that this is 2.6% more than the same time last year. Pei Hao is a senior analyst with international brokerage Freight Investor Services. She believes that the rise in ore prices has been influenced in part by the recent rally in the prices of coal and coke. Coking coal and coke, two other steelmaking ingredients, have both rallied 7.19% and 5.92% respectively after reaching near nine-year lows Tuesday. Analysts said that the expectation of a reduction in supply was a factor behind the surge in coal prices. A coal trader in Singapore, who requested anonymity, said: "We have liquidated our short positions today." The benchmarks for steel on the Shanghai Futures Exchange have seen gains. Rebar gained 1.57%, while hot-rolled coil grew by 1.61%. Wire rod climbed 1.14%, and stainless steel edged up 0.59%. ($1 = 7,1904 Chinese Yuan) (Reporting and editing by Mrigank Dahniwala; Amy Lv, Lewis Jackson)
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London copper little changed, US tariff concerns persist
London copper prices were largely unchanged Wednesday due to uncertainty surrounding U.S. duties on the metal. The London Metal Exchange's three-month copper fell by $2.5 per ton, to $9.631.5 at 0701 GMT. The Shanghai Futures Exchange's most traded copper contract rose 0.5% to $10,879.85 per ton. The U.S. doubled the tariffs on imports of steel and aluminum to 50% starting Wednesday for all trading partners, except Britain. Britain's steel and aluminum exports are taxed at a 25% rate until July 9. Copper found some support amid concerns that the metal could also be subjected to U.S. Tariffs. The Trump administration is currently evaluating the impact of U.S. imports of copper on the local industry," ANZ stated. Investors waited for U.S. jobs data to provide immediate trading signals and a possible development on tariff negotiations. After the delivery of 4,600 tonnes, inventories dropped to 143.850 tons. This is the lowest level in nearly a year. Other LME metals saw tin gain 1.1% at $31,720; aluminium 0.8% at $2,483.5 per ton; zinc 0.5% at $2,721, and nickel 0.5% up to 15,515. Lead also gained 0.2%, to $1,989. SHFE tin rose 3.1% to 257,000 yuan. Aluminium gained 0.7% at 20,075 yuan per ton. Lead increased by 0.6% to 16670 yuan. Zinc grew 0.8% to 22420 yuan. Nickel was up 0.9% at 122,590. Click or to see the latest news in metals, and other related stories.
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Gulf stocks mix as new tariffs come into effect and oil prices fall
The Gulf stock markets were mixed on Wednesday morning, as U.S. President Donald Trump imposed duties on steel, aluminium, and other metals. This is the latest chapter of a trade conflict that has shaken global markets. Investors continue to focus on the pace of the trade negotiations. A possible phone call between President Trump, and Chinese leader Xi Jinping this week is in the spotlight. Trump had accused China of violating a bilateral agreement to reduce tariffs and trade barriers on Friday. Brent crude futures fell 0.3%, to $65.46 per barrel at 0644 GMT. The prices were weighed down due to increased OPEC+ production and concerns about the global economy because of trade tensions. Saudi Arabia's benchmark index rose 0.49%. Arabian Pipes Company grew by 3.63% during early trading. JP Morgan said that the Kingdom was also planning to issue bonds worth $12.6 billion for the remainder of the year. Early trade in the UAE saw markets trading higher. Dubai's main index was up by 0.14%, while Abu Dhabi's benchmark index was up by 0.15%. Commercial Bank of Dubai led the way in Dubai with a gain of 3.04%. The index is on track for its third consecutive session of gains. Qatar Navigation, a maritime and logistic services provider, was the biggest loser, down by 1.09%. Qatar's finance ministry reported a deficit in its budget of 0.5 billion Riyals ($133.31million) for the first quarter 2025. Total revenue was 49.9 billion Riyals, down 7.5% compared to the same quarter in 2017. The deadline to submit the best trade proposals with the U.S. is Wednesday. This gives countries a chance avoid Trump's high tariffs. The markets also expect the wildfires which have been sweeping Canada since last week to affect oil supply despite a temporary respite from rainy weather. Calculations show that wildfires in Alberta affected more than 7 percent of Canada's crude output.
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Snapshot of China’s crucial mineral export controls
Global automakers Sounding the Alarm The world is facing a shortage of rare-earth magnets due to China's restrictions. These materials are vital for automotive, defence and clean-energy industries. German Automakers have become the latest to warn about China's export restrictions, which threaten to close production and shake their local economies. This follows a similar complaint made by an Indian EV manufacturer last week. U.S. automakers, Japanese and South Korean carmakers warned Donald Trump on May 9. Car factories Could close. Rare earths are now part of an export control list that already includes over a dozen minerals, and materials related to them. Exporters must apply for licenses in Beijing before they can sell overseas. China has also banned the export of antimony, gallium, and germanium to the United States. Here is a list of all Beijing’s restrictions on mineral exports since 2023. RARE EARTHS China put rare earth magnets, seven rare earth elements (samarium gadolinium terbium dysprosium lutetium scandium yttrium) and related items, including samarium gadolinium terbium lutetium scandium yttrium and terbium dysprosium terbium and tetradolium) on the export control list for April. The announcement was part of a larger package of retaliation to Washington's tariffs. However, the controls are global and the press release did not mention the United States. China produces 90% of rare earths in the world, which is a grouping of 17 elements that are used by the electronics, defense, and electric vehicle industries. The U.S. only has one rare earths mining facility and the majority of its supply goes to China for refinement. China is the only country that has mastered this environmentally damaging and technically challenging refining method. China produces 90% of the world's refined products. China has been tightening the control of its rare earths industry for years. Beijing added a ban on the export of technology for making rare earth magnets to its existing technology-refining ban in December 2023. The domestic production is closely controlled by a quota system that only grants quotas to state-owned miner. TUNGSTEN, INDIUM, BISMUTH, TELLURIUM AND MOLYBDENUM China implemented export controls on five metals used for defence, clean energy, and other industries shortly after U.S. president Donald Trump's 10% tariff on Chinese products took effect in early February. Export licences are required for 20 products relating to tungsten, molybdenum, tellurium and bismuth. The curbs did not go as far as outright bans but were targeted at certain metals like molybdenum. BATTERY, LITHIUM AND GALLIUM PROCESSING TECHNOLOGY China proposed in January to restrict the exportation of certain technology used to manufacture cutting-edge batteries components and to process lithium and gallium, which are critical minerals. The announcement didn't say when the proposed amendments, which were open to public comments until early February, might come into effect. Since the proposal was made, at least one company has ceased exporting the products listed. ANTIMONY, GALLIUM, GERMANIUM Beijing has banned the export to the U.S. of three minerals that are critical to the chip industry in China. This was done to respond to Washington's renewed crackdown against the sector. China has gradually introduced export licensing schemes for these three metals over the past 18 months. Exports of antimony to major buyers such as Japan, India, and South Korea, which is a strategic metal that's used in solar power equipment, munitions and flame retardants had only just begun three months after the export licenses were issued. China is the world's largest producer of these three metals, and produces or refines half to 90% of the global supply. GRAPHITE China announced that it will require export licenses for certain graphite products in October 2023 to protect its national security. China is the top producer and exporter of graphite in the world. It also refines over 90% of all graphite to a material used in almost all EV batteries. (Reporting done by Tony Munroe, Lewis Jackson. (Editing by Chizu Nomiyama Mark Potter Christian Schmollinger and Chizu Nomiyama)
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Sources say that India's Finance Ministry wants to lower energy prices in order to offer green steel incentives.
Two sources with knowledge of the matter say that New Delhi wants to control its inflation and expenditure, so it is looking for a softening in green hydrogen prices before deciding to provide financial assistance to steel producers who use clean energy. Indian steel producers are asking the federal government for incentives, as the country considers mandating a certain percentage green steel in all government projects. India, which is the second largest steel producer in the world after China, and one of the major emitters of greenhouse gases, has worked on a policy to reduce carbon emissions from the production. The delay in launching federal financial assistance could slow India's plans for energy transition to achieve the 2070 net-zero goal. The Steel Ministry is looking for incentives from the Finance Ministry to decarbonise efforts. Sources in the finance ministry have said that green steel is not economically viable and could be inflationary due to high costs of green hydrogen. One source declined to identify themselves as the discussions were not public. The source, who was referring to the thinking of the Finance Ministry, said that "Steel as an intermediate product would be expensive to manufacture green steel and it is important to find a balance between growth and sustainability." India's Finance and Steel Ministries did not reply to emails asking for comments. A majority of Indian steel plants rely on coal to operate their blast furnaces. The steel ministry has promoted green hydrogen as a viable alternative, but the high cost is a deterrent. India declared in December that steel with carbon dioxide emissions less than 2.2 tonnes per tonne finished steel will be considered "green steel". Global Energy Monitor reports that India's steel producers produce 2.55 tons of carbon dioxide for every ton of crude iron ore produced. This is 38% more than the global average, which is 1.85 tons. (Reporting and editing by Nidhi verma and Michael Perry; Reporting by Neha arora)
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Iran's Khamenei refuses US nuclear demands, vows to continue enriching uranium
Ayatollah Ayatollah Khamenei, Iran's supreme leader, said that Tehran would not abandon its uranium-enrichment program, and rejected a U.S. request aimed at ending a decades long nuclear dispute. He said the demand was against Iran's interests. The U.S. proposal to a new nuclear deal Oman, the Middle East envoy of President Donald Trump, Steve Witkoff, and Iranian Foreign Minister Abbas Araqchi, presented a letter to Iran on Sunday. Iran insists on maintaining its uranium-enrichment program on its own soil, and Tehran refuses to send its entire stockpile of highly-enriched uranium abroad - a possible raw material for nuclear weapons. Khamenei stated in a speech broadcast that "Uranium Enrichment is the key for our nuclear program and the enemies are focused on enrichment." He said that the U.S. proposal was "incompatible with our nation's belief of self-reliance, and its principle 'We Can.'" "The rude, arrogant and smug leaders of America have repeatedly demanded that we not have a nuke programme. "Who are you to decide if Iran should enrich?," he continued. Tehran has denied for years that it was seeking to develop nuclear weapons and says it only wants to master the technology to use it peacefully. On Monday, Reports that Tehran is ready to reject The U.S. proposal was rejected by Iran on the basis that it failed to meet Tehran's needs or soften Washington's position on uranium-enrichment. Since his return to the White House, Trump has re-launched his "maximum press" campaign against Tehran. This included tightening the sanctions and threatening to bombard Iran if negotiations fail. Trump, during his first term as president in 2018, renounced the 2015 nuclear agreement between Iran and six major powers. He also reimposed economic sanctions on Iran that have crippled its economy. Iran responded by increasing enrichment beyond the limits of the nuclear pact. Israel, Iran's arch enemy, sees the Islamic Republic's nuke programme as a threat to its existence and has threatened to bomb Iran's facilities in order to stop Tehran from acquiring atomic weapons. (Written by Nayera Abadallah and Parisa Haffezi, edited by Jacqueline Wong & Andrew Heavens).
Trump's proposal will lift Biden's limits on Alaskan oil drilling
On Monday, the administration of U.S. president Donald Trump proposed rolling back Biden's limits on oil drilling in Alaska. This area is the largest undeveloped public land tract in America.
This move is in line with Trump's energy agenda, which includes reducing regulations on oil and gas production and increasing domestic fuels.
The Alaska National Petroleum Reserve is made up of 10.6 million acres (4.39 million hectares).
NPR-A is the name given to a 23 million-acre (9,3 million-hectare) area of Alaska's North Slope, which was designated in 1923 for emergency oil supplies by the U.S. Navy. In the 1970s, the land was made available for commercial development. It is now administered by the Interior Department Bureau of Land Management.
The Interior Department stated that the Biden-era regulation was in conflict with the 1976 Naval Petroleum Reserves Production Act which authorized oil and natural gas leasing.
Interior Secretary Doug Burgum stated in a press release that Congress was clear in its intent to create the National Petroleum Reserve (NPR) in Alaska for responsible development in support of America's energy independence. The 2024 rule did not follow this mandate. It prioritized obstruction over production, and undermined our ability to harness American resources at a critical time for energy independence.
It was reported that the Interior Department of the Biden administration had finalized a regulation in April last year to prevent oil and gas development within 40% of Alaska’s National Petroleum Preserve. This would protect the habitats of polar bears and caribou, as well as the way of living of Indigenous communities.
Environmental groups praised the Biden Rule for protecting habitats, cultural resources and the U.S. economy. But Alaska officials claimed that the restrictions would result in job losses and increase the U.S.'s dependence on foreign resources.
According to the U.S. Energy Information Administration, Alaska's North Slope is responsible for just under 3% of U.S. crude oil production. (Reporting and editing by Nichola Gardner and Timothy Gardner)
(source: Reuters)