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Gold prices remain near seven-month lows as US rate hike prospects weigh
Gold prices are steady?on Friday?but remain near the seven-month low reached in the previous session as the expectation of interest rate increases in the U.S. weighs on the precious metal. As of 0843 GMT, spot gold remained at $3,999.33 an ounce. U.S. gold futures for August delivery slipped 0.2% to $4,014.90/oz. CME FedWatch data showed that the markets currently believe there is a 66% probability?that rates will be raised by the U.S. Federal Reserve in September. Nikos Tzabouras is a senior market analyst at Jefferies' Tradu.com. ETF outflows and the rotation to equities fueled by the AI boom, are factors that definitely weigh on gold, said Tzabouras. He noted that these forces tend be cyclical, but do not detract from the structural case for the precious metal. Bullion prices have fallen more than 6% since the Fed meeting last week. On Wednesday, they fell below $4,000 for the first since November 2025. Prices are down by over 28% compared to the record high of $5,594.82 that was reached on January 29. Investors are now awaiting the U.S. The Fed's preferred measure of inflation, Personal Consumption Spending data, is due at 1230 GMT. This will provide further clues about monetary policy. On the geopolitical side, Lebanon and Israel are examining a U.S. backed plan that would see Israeli forces handing over seized Hezbollah territory to the Lebanese Army. Silver spot rose by 0.4%, to $57.64 an ounce, while platinum fell 0.4%, to $1,571.95. Palladium climbed 1.6% to $1,184.70.
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Sweden has approved the first funding package for new nuclear power plants, says PM
Sweden's government has reached an agreement with Videberg Kraft on the first package of financing to build new nuclear reactors, Swedish Prime Minister Ulf Kritersson announced on Thursday. Kristersson, a reporter, said that the state would also be a?owner' in this project. Kristersson did not give any?details? of the package's financing, which must be approved by the European Commission. In a press release, the government announced that it would take a 60% stake in Videberg Kraft. Currently, Vattenfall owns 80% of Videberg Kraft and a group of industrial companies holds 20%. Vattenfall will lose 20% of its stake, according to the government. The Swedish parliament passed legislation last year to finance the construction of a new generation reactors. This is the first time in more than 40 years that a nuclear reactor has been built in Sweden. According to the government, this is essential for energy security as well as achieving net zero emissions by 2045. Vattenfall chose the British company Rolls-Royce SMR over GE Vernova earlier this month to supply small nuclear reactors. In a deal valued at several billion pounds, Vattenfall chose Rolls-Royce SMR over GE Vernova.
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Sources say that Iraq has weighed all options if OPEC quotas are not increased and is considering leaving the bloc.
Iraq has weighed the possibility of leaving OPEC if it's quota is not increased significantly, according to sources familiar with Iraqi oil policy. The possibility that OPEC’s second largest producer is considering a departure would be a blow to the group, especially after the departure of the United Arab Emirates this year. Iraq was one of five founding members when OPEC was founded in the Iraqi capital. Iraq is in a financial crisis due to the Iran War and a rise in its OPEC quota must be taken seriously, a senior Iraqi official from the oil ministry told?. He said that Iraq considered leaving OPEC but its current plan is to remain a part of it and work towards a larger quota. Saudi Arabia and other OPEC members should take this issue very seriously. He said that if this is not done, "Iraq would be forced to consider all options." When asked if they discussed an OPEC withdrawal, he replied: "It is still too early for this step". OPEC didn't immediately respond to a comment request. A spokesperson for the Iraqi government said that the country was working hard to restore its full oil export capability, but refused to comment on the OPEC quota it holds or the possibility that the country could leave the group. Haider al Aboudi, Iraqi spokesperson, said that Iraq is working to restore the full capacity of its oil exports and hopes to increase oil production to seven million barrels a day in the next few years. After the report, oil prices briefly continued to decline. They traded below $73 per barrel. Since assuming office in May, Iraqi Premier Ali al-Zaidi's administration has placed a high priority on reviving Iraq's economic growth, attracting foreign investments, and fighting corruption. State news agency INA reported that on Wednesday, he stated Iraq wanted OPEC to increase Iraqi oil production in line with its capacity and population. Seven members of OPEC+ increased their production quotas between April and June by nearly 600,000 barrels per day. OPEC+ is made up of the Organization of the Petroleum Exporting Countries (OPEC) and allied producers including Russia. (Reporting and writing by Maha El-Dahan, Alex Lawler, and Alex Lawler, with additional reporting by Muayad Hamid; editing by Alexandra Hudson and Michael Georgy)
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Aluminium prices at pre-war levels despite declining Middle-East Risk Premium
Aluminum traded at a level similar to that of the pre-Middle?East War levels for the second trading day as the market priced in its conflict risk premium. Benchmark?aluminium for three months on the 'London Metal Exchange' edged up by?0.14%?to $3,127 per metric ton at 0701 GMT. This marks a 8% decline since the beginning of the week. The Shanghai Futures Exchange's most traded aluminium contract closed daytime trading down by 2.58% at 22,865 Yuan ($3,360.82). It fell earlier in the session to 22,665 Yuan per ton ($3,360.82), its lowest level since 2026. Analysts at Sucden Financial noted that the decline "highlights the rapidity with which the market repriced after energy concerns eased, and the narrative shifted from disruption to a normalisation." Since the U.S.-Iran long-term negotiations ended without major incident on Monday, the market has reassessed its risk. The Sucden analysts noted that "base metals are now trading macro and position dynamics, as the geopolitical premium has largely been unwound. Flows have also become more cautious." Prices are also affected by concerns that longer-term interest rates will restrain the economy and reduce demand for industrial metals, which are dependent on growth. Benchmark LME?three-month Copper gained 0.35% while the most traded SHFE contract fell by 1.82%. Nickel, which is used widely in stainless steel, electric vehicle batteries and other products, also had a volatile trading day due to unclear supply expectations. Benchmark?LME nickel three-month?increased by 0.31%. The SHFE was down by 0.79% after falling earlier by 3.02%. The Indonesian mining ministry clarified it has not yet set its nickel production cap for 2026 despite'speculation' that the cap will be increased. Zinc?lost 0.5 %, lead fell 0.21% and tin gained 0.45%. On the SHFE, meanwhile, zinc fell 1.74%, while lead dropped 0.95%, and tin fell 2.18%. ($1 = 6.8034 Chinese Yuan Renminbi) Reporting by Solomon Cefai, Editing by Ronojoy Mazumdar
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China's coking coal prices fall due to slump in steel demand
Chinese coking 'prices' pared gains earlier to trade lower?Thursday, as concerns about demand prospects for steelmaking ingredients were fueled by a slump in steel consumption. Data from the consultancy Mysteel revealed that apparent consumption of five major steel products sank 6.5% on a week-on week basis as of Thursday. This compares to a gain of 3.1% during the previous week. Steel prices and feedstocks were under pressure due to the deteriorating market sentiment. The Dalian Commodity Exchange's (DCE) most traded coking coal contract closed the daytime trading 0.88% lower, at 1,238.5 Yuan ($181.99) a metric ton. The most actively traded DCE coke contract lost 0.77% of its earlier gains, trading at 1,932 Yuan per ton. The price declines were however capped by the slow recovery of production in the north province of Shanxi - in the wake of a fatal mining accident that occurred in late May, and the strict safety inspections being conducted in this coal-rich area. According to a Mysteel report on Wednesday, the pace of recovery has slowed in Shanxi, as the number of mines in certain areas that have halted their production is on the increase. The price of coking coal has risen after a deadly mine accident in China triggered "widespread and stringent safety checks across China's largest coal production hub", causing supply concerns. The price of iron ore also fell, with the most-traded DCE contract ending daytime trade at 735 yuan per tonne and the benchmark July ore at the Singapore Exchange falling 0.88% to $97.5 per tonne, as of 08:00 GMT. The benchmarks for steel on the Shanghai Futures Exchange were weaker. Rebar and hot-rolled coil lost 0.45%. Wire rod fell 1.06%. Stainless steel fell 0.51%. Analysts at Lange Steel wrote in a report that the daily crude steel production in June will be around 2.7 million tons, up from 2.72 million tonnes in May, according to official data. $1 = 6.8052 Chinese Yuan (Reporting and editing by Amy Lv, Lewis Jackson)
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Spain's Audax plans to takeover Norway's Elmera but is challenged by higher rival approach
Spanish renewable energy company, 'Audax Renovables' announced on Thursday that it plans to make a voluntary takeover bid for Norway's Elmera Group. The bid is valued at 4.5 billion Norwegian crowns (US$456 million). Elmera also said that another strategic player had made a non-binding offer with a "significantly" higher price. Early trade saw Elmera's shares up by about 43% while Audax's shares fell 1.4%. The Norwegian 'company' said in a press release that it had entered into an?exclusive agreement and due diligence agreement? with the unnamed interested party, adding that this process has been ongoing for several weeks. * Elmera refused to make any further comments on the subject, and Audax wasn't immediately available for comment. Shareholders representing 43.3% of Elmera’s capital have already expressed their support for the Audax deal, which requires a minimum level of acceptance of 66.7%. The deal will strengthen the European presence of Elmera, especially in the Nordics. It will also diversify the company's energy platform as Elmera operates a multiutility business that includes telecoms.
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How can the next UK Prime Minister revive the economy? Channel Richard Nixon: Mike Peacock
The country has been unable to govern itself for the past decade. Andy Burnham may be Keir's likely successor. He has a plausible but narrow path to galvanize Britain's economy. To do this, he may need to channel the former U.S. president Richard Nixon. Burnham has a lot of time on his side. Burnham has three years before the next general election, which gives him time to implement fundamental changes. It's possible that the population is ready for change. Most Britons believe that the country has been heading in the wrong direction for a while, according to polls. Since the global financial crises, productivity growth has slowed. Since the global financial crisis, economic growth rates have dropped from 2.5% per year before the crisis to a little over 1%. Public debt, which was around 36% GDP in 2007, has now risen to almost 100%. Some may be willing accept difficult choices if they believe that it will lead to better times in the future. Burnham is a better communicator and may be able to weave a narrative that Starmer could not. Influence is the next factor. Starmer, despite having a large parliamentary majority in favour of his plans to reduce the over-bloated welfare system in the country, was unable to convince the vast majority of Labour MPs to back him. Burnham has the chance to achieve this by channeling the "Nixon effect" in China. The former U.S. President's conservative, hawkish reputation allowed him to pursue rapprochement in the 1970s with Communist Beijing. A more left-leaning leader could not. Burnham might do the same thing in the other direction. Burnham has supported progressive economic policies for many years, calling it "business-friendly socialistism." This track record, combined with his popularity among his left-leaning party members, may help him convince them that he can be trusted to face the fiscal realities of the country. How could Burnham pursue economic reforms? First, he must get the message right to both his party and to markets. Burnham, who was just re-elected to parliament in 2018, could claim that the global landscape has dramatically changed since Labour came to power in 2024. This means that he's not bound by Starmer’s commitments to not raise the personal tax rates, or to touch the generous state retirement arrangement known as "triple lock." Next step is to surround himself with the best people. It's a good sign that Jim O'Neill - former minister of the government and chief economist at Goldman Sachs - has advised him, along with Andy Haldane, former BoE Chief Economist. Burnham's selection of a finance minister is the key to his fiscal intentions. He must also be prepared to take risks. O'Neill told BBC radio recently that "we need someone who is willing to do something bold, different and unique." Burnham, he said, should cut spending on welfare, healthcare, and state pensions to free up resources for productive investments without ballooning deficits. This move could win over bond investors and businesses, just as the early 1997 Labour decision to hand the Bank of England the control of interest rates had done. Burnham would have more room to invest with this trust without worrying the bond market. The fact that Canada is not an outlier in terms of debt should be helpful. Burnham had a rough start in this regard, declaring early this year that "no government should be?hocked" by the bond market. Burnham has since changed his mind and agreed to keep the fiscal rules of current Finance Minister Rachel Reeves, which require that day-to-day expenditures be covered by income in three years, and net debt as a percent of GDP must drop within five years. The UK's politicians are aware that they cannot play with the public's money, given the legacy of Liz Truss’ brief premiership, which was cut short in 2022 by the bond market's reaction to the?unfunded tax reductions. GREAT COMMUNICATOR? Burnham is likely to face many of the challenges that his predecessor faced, but he may be luckier than?Starmer. If the Iran peace agreement?holds' and the Strait of Hormuz is reopened fully, the inflation rate could fall soon and the prospects of interest rates being cut next year may grow. This would help to reduce the country's debt. The strength of the opposition is another issue. In successive by-elections there has been evidence that voters have voted tactically, backing the party they think will best defeat the right-wing Reform Party, and not necessarily their preferred candidate. This assumption may be correct. Burnham, who overwhelmingly defeated the Reform candidate at his by-election victory last week, could have more room to implement reforms. As with Starmer's case, it will ultimately come down to personal conviction and personality. Starmer came to power with no clear vision of the future for Britain, and little ability to articulate a path forward. When his party objected, he abandoned important policy plans. Burnham is a great communicator, but this only counts if Burnham has a solid plan to sell. Burnham's former colleagues and even his allies say that he doesn't 'enjoy making unpopular decisions. His ability to make unpopular decisions will determine the fate of government and economy until 2029. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. (Writing and Editing by Margueritachoy and Anna Szymanski.)
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Mike Dolan: No silver bullet to solve Fed's inflation problem with the Iran peace deal
The Gulf peace may reduce pump prices but it won't solve the Federal Reserve’s biggest problem. That is, a U.S. Economy that was already overheating prior to the Iran War. Oil prices falling to levels seen before the war could spur demand and increase cost of living fears at a crucial time. This sounds like "damned-if-it does, damned-if-it doesn't" dilemma. Normalizing fuel prices may not solve the Fed's dilemma over inflation and interest rates as quickly as President Donald Trump or the Fed would like. The 'inflation debate' before the conflict was ambiguous, as markets sided with the Fed's guidance for further easing, and viewed the arrival of the new Chair Kevin Warsh to be a dovish message. After the U.S. and Israeli attacks on Iran, on February 28, headline inflation forecasts were re-evaluated after a spike in gasoline and crude prices. This was due to the unprecedented closure of Strait of Hormuz which froze a fifth of world oil supplies. The impact of four months of high inflation and a Fed policy meeting that was hawkish last week has been felt: the dollar, the short-term Treasury yields, and futures markets have priced in two rate increases over the next year. Not even the framework agreement between the U.S. and Iran last week has shaken these bets. Reopening Gulf shipping lanes have brought crude prices back to pre-war level, wiping out a 70% rise in only four months. Yet, expectations of rate hikes barely changed. According to Apollo Chief Economist Torsten Slok, on Wednesday the market narrative has changed from one that sees oil prices as an inflation driver directly to one in which lower energy costs can fuel demand in a hot economy. Slok, pointing out that the link between oil and the yields on two-year Treasury bonds has been broken, wrote: "The narrative now suggests the reopening of Strait of Hormuz could further heat up the economy." There has always been two narratives about the energy shock. It's not clear if a return to the status quo of February will remove inflation or just temporarily lift the brakes on household and business demand. The fact that core inflation rates in January and Feb were already more than one point above the Fed target, a complete reversal in energy prices related to Iran is not enough to solve the problem. The AI investment boom has also brought about additional problems. The 'PERSISTENT TUG OF WAR' will be tested by the personal consumption expenditures (PCE) reading on Thursday for May. This is the preferred inflation indicator of Fed. Core PCE should have increased to 3.4% annually. Data is from the time before the Iran deal last week, so it will not reflect any impact. U.S. Business Surveys for June showed a rebound from the lows of March, with both composite manufacturing and service indices by S&P Global beating expectations. The pressures on input and output prices remained high. The stock market continued to soar despite the war, energy shortages and the AI spending frenzy. The Philadelphia Semiconductor Index is up 60% since the Iran War began, and the S&P 500 gained 8%. This adds to the wealth effects?and consumption tailwinds, as bottlenecks are fed through from the surging AI investments. JPMorgan's mid-year forecast raised its S&P500 year-end target, and stated that the next Fed rate increase is higher, even if it comes later than expected, in 2027, rather than now, as futures market prices currently indicate. JPMorgan strategists, looking at the second half of 2018, wrote that markets will be in a constant tug-of-war between an energy supply shock and still resilient growth. As the growth/inflation balance worsens, the chances of a Goldilocks result diminish -- increasing the case for selective interest rate increases. The return of oil to pre-war prices will be a cause for celebration for most governments and investors. But whether it will make central banks turn the dial 180 degrees is another question. Warsh's desire to reduce the guidance and signaling of future policy directions will complicate matters for the markets. This may cause markets to become more jittery and require a risk premium as the rest of the year progresses. Morgan Stanley's team, for example, believes that this will lead to increased market sensitivity in the future, which could mean greater volatility for short-dated fixed income. The fog that surrounds everything else may replace the clarity of energy prices. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
Heatwave in London spurs calls for more action
London got a glimpse at the future during its eighth annual Climate Week after an event at the London School?Economics that was meant to discuss the effects?of extreme heat was cancelled due to the temperature. The event was to be held in an almost 100-year-old British building which relies on fans and natural ventilation to cool guests. Organisers said that they cancelled the event due to a potential risk to public safety. Chris Anderson, climate expert with the non-profit Practical action, said that the cancellation was a stark warning to everyone about the dangers a warming world poses.
Anderson said that it was a real irony that a heat-related event in a temperate country with a wealthy population had to be cancelled.
Extreme Heat Warning
Helen Clarkson CEO of Climate Group said that the heatwave was a sign that "science is coming to life" and the reality clearly shows there will be more to come. The government had issued an extreme heat alert and many schools were closed. Organizers said that more than 75,000 people from government, businesses, finance, and civil society attended 1,300 events to discuss ways to accelerate climate change in advance of the 'COP31 climate talks, which will take place in Turkey, in November. The focus was on resilience to extreme weather, such as heat and droughts. U.N. Secretary General Antonio Guterres urged governments to take more steps to fund projects and to tax windfall profits from fossil fuel producers.
A Lancet report from October said that global deaths due to heat have increased by 23% in the past 20 years, to average 546,000 deaths per year. Many of these deaths are occurring in developing countries.
The UK Climate Change Committee (an independent body that advises the government) has described preparations as "inadequate". It estimates that an investment of approximately PS11 billion per year will be needed to correct this.
Heat-related deaths may exceed 10,000 per year by 2050, according to the report.
ASIAN COUNTRIES RISK THE MOST
Speakers - from Guterres, to British Minister Ed Miliband, and the leader in the Pacific nation of Palau - referred to the abnormally warm weather as they urged the audience to act sooner to curb global warming.
Unilever and Danone, two of the world's largest food companies, both told LSEG attendees that they would be investing in reducing carbon dioxide and water usage in agriculture.
Bertrand Millot is the head of sustainability for La Caisse, a Canadian pension fund. He said that Asian countries were among the most vulnerable and needed to adapt rapidly.
"It is a matter of survival... and businesses need to be prepared." (Berna Lewis contributed additional reporting; Milla Nissi Prussak edited the article)
(source: Reuters)