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Gold's uptrend is intact but it will need to correct before reaching $4,000 by 2026
Gold's spectacular rally to successive records highs is expected to continue for the remainder of the year. However, a healthy correction will be needed before it reaches the $4,000 an ounce milestone, which is set for 2026. Investors have been prompted to buy gold by strong tailwinds including expectations of monetary easing from the U.S. Federal Reserve. The long-term bull run in gold looks intact as demand, especially from central banks, and ETFs continues to increase at a faster rate," Renisha chainani, head research at Mumbai refiner Augmont, said on the sidelines at the India Gold Conference, held in New Delhi. She said, "But gold has reached overbought levels and could see a short-term correction of 5-6% before consolidating again and reaching new highs in 2026 above $4,200." Gold spot was trading at around $3,680 an ounce on Wednesday, after reaching a session record of $3,689.27. It has gained 40% this year following a 27% increase in 2024. Nearly all participants in the industry at the conference expected gold's bull market to continue through 2026, based on a decline in U.S. rates of interest, strong demand for investment and geopolitical risk. Analysts have hedged prices to reach $4,000 by 2026. It's hard to say because the price is rising faster than expected, according to Nicholas Frappell of ABC Refinery, who heads global institutional markets. At the end of its monetary policy meeting, scheduled for September 17, it is widely expected that the U.S. Central Bank will cut interest rates. Trump has repeatedly criticized Federal Reserve Chair Jerome Powell's slowness and urged the Fed to reduce rates. Gold is a popular hedge against geopolitical risks and economic uncertainties. It also flourishes in an environment of low interest rates. Metals Focus' managing director, Philip Newman, said that gold prices have not been in this range for too long. The firm anticipates the price to rise to $3,800 by the end of the calendar year. We could see a possible correction after this price rally. But we also see it as an opportunity for investors to enter the market who have been waiting. In 2026, we could see gold prices rise above $4,000." SILVER BREAKOUT Silver, a metal that is both an investment and used for solar and electronics, has done well due to the strength of gold and the strong physical demand during this time of deficit concerns. On Tuesday, the metal reached its highest price in 14 years at $42,50 an ounce. Silver prices have been boosted by growing investor interest, said Chirag Thakkar. He is the chief executive officer of Amrapali Group Gujarat.
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Google invests $6.8 billion in the UK ahead of Trump's visit
Google announced on Tuesday that it will make new investments of 5 billion pounds (6.80 billion dollars) into Britain in advance of U.S. president Donald Trump's visit to the nation, which is expected feature a flurry business deals and partnership. The U.S. technology company announced also the opening of a data centre near London to meet growing demand for AI-powered Google Cloud, Search and Maps services. In a statement, finance minister Rachel Reeves stated that the investment was "a powerful vote for confidence in the UK's economy and our strong partnership with the US". Alphabet's company stated that the investment will create 8,250 new jobs each year at British companies. The announcement is expected to be a boost to the Labour government of British Prime Minister Keir starmer, who hopes to attract private investments to help grow an economy that has been stagnant and to regain momentum on national opinion polls. Trump's visit will also be expected to strengthen economic ties between both Western allies. Senior U.S. government officials have stated that deals worth more than $10 billion will be announced. Google said in its statement that it has also agreed to a deal Shell, which will contribute to grid stabilization and Britain's transition towards a cleaner energy. Google's Waltham Cross Data Centre, located about an hour from London, is equipped with air-cooling technologies to reduce water consumption and can reroute heat to homes or local businesses to minimise its environmental impact. Google's UK operations will be running at or close to 95% carbon-free energy by 2026, thanks to its clean-energy initiatives and its partnership with Shell.
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Morning bid Europe-Fed begins September meeting with the threat of independence
Rae Wee gives us a look at what the European and global markets will be like tomorrow. On Tuesday, the U.S. Federal Reserve will begin its two-day meeting where a rate cut has been all but priced into the market. This is at a moment when the White House is putting unprecedented pressure on the central bank to change the direction of the monetary policy. On Monday, the U.S. Senate narrowly confirmed Stephen Miran as a member of the Board of Governors of the Federal Reserve. This gave President Donald Trump's chief economic adviser one of twelve votes to set interest rates on the eve of a policy meeting. Miran is expected to attend the policy meeting, pending his swearing in and completion of paperwork. Lisa Cook, the Fed governor, is also able to attend despite a Supreme Court intervention at the last minute. A U.S. court of appeals ruled on Monday that Trump couldn't fire her. The markets reacted little to the news, but the development was a reminder that Trump is stamping his mark on the bank. He's changing its image in the public's eyes and among peer institutions. And he influences policy and other decisions. The markets were in a wait-and-see attitude ahead of Wednesday's Fed decision. Stocks in Asia reached new highs, while the U.S. Dollar struggled to gain traction. The markets have priced in the 25 basis point cut, with some even pricing in a 50 basis point move. This is despite Trump's call for a "bigger cut" from the Fed. Investors will have UK retail sales data, as well as U.S. retail employment figures to digest later Tuesday. The Bank of England continues to be concerned about the still-high wage growth in Britain, even though the wider labour market is showing signs of cooling. The average weekly earnings are expected to have grown 4.8% between May and July, as opposed to 5.0% from April-June. Meanwhile, the unemployment rate will likely remain at 4.7%. A poll of economists showed that the BoE will likely keep its benchmark rate at 2% this week, despite inflation rates creeping up. However, it is expected to reduce interest rates once next quarter, and then again in early 2019. The following are the key developments that may influence Tuesday's markets: * UK labour market data (July) * U.S. retail sales (August) The two-day meeting of the Federal Reserve's monetary policy committee begins
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Iron ore is a robust alternative to China's soft steel: Russell
In August, the gap between China's steel industry and its appetite for iron ore imports widened. This highlights the difference between hope and reality. China, which produces just over half the world's steel, saw its output fall for a third consecutive month in August, to 77.37 millions metric tons. The month was the weakest since December and was down by 0.7% compared to August and 2.9% compared to the 79.66 millions tons recorded in July. The steel output in the first eight-month period was 671.81 millions tons, which is a decrease of 2.8% compared to the same period last year. Iron ore imports and prices remain robust, despite the weakness in steel. According to data released by the Chinese government last week, China imported 105.23 millions tons of seaborne iron ore in August. This was the third consecutive month that imports were above 100 million tonnes. This trend is expected to continue into September when commodity analysts Kpler predict imports of 112,2 million tons. If achieved, this would be the highest level since December last. Iron ore prices have also been rising, with benchmark futures at the Singapore Exchange closing Monday at $105.50 per ton, just under the six-month peak of $106.75 reached on September 9. The front-month contract has increased 13% since its lowest point of this year, which was $93.35 per ton on July 1. The price of iron ore is rising due to the strong Chinese demand. But why are steel mills purchasing more of this key raw material when they are experiencing lower production and shrinking margins? Answer: They are still hopeful that Beijing's efforts at stimulating steel-intensive industries, such as construction will be fruitful. It is difficult to prove this, as new home prices dropped by 0.3% from August of the previous month. This is a continuation of a downward trend which began in May 2023. The number of new construction starts is also low, falling 19.5% from August 2024 to August 2018. RECOVERY OF STEEL IN SEPTEMBER The positive side is that there's optimism about the steel production in September, after a soft August. Some of this was blamed for production curbs during the lead-up to Beijing’s military parade to celebrate the end of World War Two on September 3. Even if the steel production does improve in September, it is unclear how large or long-lasting this recovery will be. Beijing is thought to have an informal goal that the annual steel production be kept at the same level of around 1 billion tonnes that has prevailed over the last five years. After subtracting the total steel production for the year from 1 billion tons, there are 328 millions tons left over to use in the final four months of the calendar year. This is an average of about 82 million tonnes per month. There is room for growth in the third quarter and September. The visible inventories of iron ore and steel have increased but remain at levels which suggest that more stockpiles could be added. Stocks of steel rebar SteelHome consultants monitored the rise to 4,69 million tons during the week ending September 12. Rebar stocks tend to peak in March after a build-up over the winter months. The current level, however, is below the peak of March 2025 at 6.36 million tonnes and the 8.37 millions tons from March 2024. Iron ore stocks at China's port The week ending September 12 saw a drop to 132.6 millions tons from the 149.4 that was recorded in the same period last year. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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Peak Rare Earths, Australia's rare earths company, accepts a $130 million Shenghe bid; rejects a higher U.S. offer
Peak Rare Earths, a company based in Australia, said it had approved the takeover of Shenghe Resources by a Chinese rare earths producer. The decision was made to choose certainty over a more lucrative but conditional U.S. bid. Shenghe Singapore will purchase all shares of Peak that it does not own at A$0.443 per share. This value is A$195 ($129.9 millions) for the miner. The Chinese company holds a stake of about 19.7% in the Australian miner. The approval came after General Innovation Capital Partners, a U.S.-based company, made a non-binding bid of A$240m. rejected The bid was rejected earlier on Tuesday due to a lack of clarity regarding due diligence and execution. Shenghe has said that it will not support the proposal of GICP. Shenghe is a partly state-owned company raised Its offer, which was made earlier in the month, increased by over 23% mid-May . This would allow it to control Peak's Ngualla Project in Tanzania, which is one of the largest deposits of neodymium & praseodymium(NdPr), crucial for electric vehicles. Shenghe is expanding its presence in Australia's rare-earths sector. In 2022, Shenghe purchased nearly 20% of Peak and signed a contract to buy Ngualla products that same year. Canberra is examining the possibility of a deal. Price floor Support critical mineral projects and position yourself as an alternative supplier to China. The peak share price rose by 3.6%, to A$0.435 at 0313 GMT. This is the highest it has been in over two years.
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Google invests $6.8 billion in the UK ahead of Trump's visit
Google announced on Tuesday that it will make new investments of 5 billion pounds (6.80 billion dollars) into Britain in advance of U.S. president Donald Trump's visit to the nation, which is expected feature a flurry business deals and partnership. The U.S. technology company announced also the opening of a data centre near London to meet the growing demand for AI-powered Google Cloud, Search and Maps, as well as Workspace. In a statement, finance minister Rachel Reeves stated that the investment was "a powerful vote for confidence in the UK's economy and our strong partnership with the US". Alphabet's company stated that the investment will create 8,250 new jobs each year at British companies. The announcement is expected to be a boost to the Labour government of British Prime Minister Keir starmer, who hopes to attract private investments to help grow an economy that has been stagnant and to regain momentum on national opinion polls. Trump's visit will also be expected to strengthen economic ties between both Western allies. Senior U.S. government officials have stated that deals worth more than $10 billion will be announced. Google said in its statement that it has also agreed to a deal Shell, which will contribute to grid stabilization and Britain's transition towards a cleaner energy. Google's Waltham Cross Data Centre, located about an hour from London, is equipped with air-cooling technologies to reduce water consumption and can reroute heat to homes or local businesses to minimise its environmental impact. Google's UK operations will be running at or close to 95% carbon-free energy by 2026, thanks to its clean-energy initiatives and its partnership with Shell.
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As the market assesses the supply risk posed by Russian refinery attacks, oil prices are on the rise.
The price of oil edged upwards on Tuesday, after rising the previous day. Market participants were concerned about a possible disruption in supply from Russia following drone attacks by Ukraine on its refineries. Brent crude futures were up 15 cents at $67.59 per barrel as of 0354 GMT, while U.S. West Texas intermediate crude was also up 15-cents. Brent crude settled at $67.44, up 45 cents. WTI closed 61 cents higher on Monday at $63.30. Ukraine intensified its attacks on Russia's infrastructure to undermine Moscow's military capability as the talks to end their war have stagnated. In a note to clients, Tony Sycamore, IG's market analyst, said that "heightened fears of supply disruptions by Russia, a major producer accounting for more than 10% of the global oil output", is helping oil price. U.S. Treasury secretary Scott Bessent said on Monday that the government will not impose any additional tariffs on Chinese products to encourage China's purchase of Russian oil, unless European countries impose steep duties on China and India. Analysts at JP Morgan said that an attack on a Russian export terminal such as Primorsk would have a greater impact on Russia's ability sell oil overseas, and thus affect export markets. The attack also suggests that there is a growing willingness among oil companies to disrupt the international oil market, which could add upward pressure to oil prices. Investors will also be watching the U.S. Federal Reserve meeting on September 16-17, where the bank is expected to reduce interest rates. Lower borrowing costs may boost fuel demand. Sycamore stated that "a weaker U.S. Dollar, driven by the expectation of a Federal Reserve interest rate cut this coming week, has further supported crude oil." The U.S. Dollar Index, which measures the strength of the greenback against six other currencies, has fallen to a near-week's low. Oil becomes cheaper for holders of currencies other than the dollar when the dollar falls. The markets also factored in the expectation of a decline in crude inventories in the U.S. in last week's official data, which is expected to be released on Wednesday at 1430 GMT. Energy strategist Walt Chancellor of Macquarie Group stated in a note to clients that U.S. crude stocks are expected to drop by 6.4 million barrels during the week ending September 12. This follows a build-up of 3.9 million a week prior. According to a poll conducted on Monday, analysts expected that U.S. crude and gasoline stocks would have decreased last week while distillate stockpiles likely increased. (Reporting and editing by Christopher Cushing in Bengaluru, Anjana Anil from Bengaluru)
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Gold reaches new highs as Fed hopes for rate cuts dent the dollar
The gold price reached a new record on Tuesday. This was largely due to the weakening dollar, which is expected to be a factor in the Federal Reserve meeting scheduled for this week. Gold spot rose by 0.1%, to $3.681.18 an ounce, as of 0326 GMT. It had earlier reached a session high of $3.689.27. U.S. Gold Futures for December Delivery were unchanged at $3,718.50. "The mood is bullish... the markets are buying rate cuts going into this FOMC Decision." "The outlook for gold remains positive in the short-to-medium term," said Kyle Rodda of Capital.com. If the Fed does not support this in their forecasts and guidance, gold prices could hit an air pocket. If the Fed supports market pricing, it could be the catalyst that sends gold prices through $3,700. In a post on social media, U.S. president Donald Trump called for Fed chair Jerome Powell to implement a "bigger cut" to the benchmark interest rate. CME FedWatch shows that traders are pricing in an almost certain 25 basis-point rate cut by the end of the meeting, which will take place on September 17. There is a slight chance of a reduction of 50 bps. Gold becomes cheaper when interest rates are lower. The dollar was trading near a two-and-a-half-month low versus the euro, and close to its 10-month low versus the risky Aussie. SPDR Gold Trust (the world's biggest gold-backed ETF) said that its holdings increased 0.21% on Monday to 976.80 tons from 974.80 on Friday. A U.S. court of appeals refused on Monday to allow Donald Trump the firing of Fed Governor Lisa Cook, the latest move in a legal fight that threatens to undermine the Fed's independence. Silver spot fell by 0.4%, to $42.52 an ounce. Platinum fell by 0.5%, to $1394.37, and palladium fell 0.3%, to $1180.64. (Reporting and editing by Sumana Nady in Bengaluru)
How AI and cloud computing might delay the shift to clean energy
A spike in electrical power demand from the world's big data companies is raising a distressing possibility for the world's climate: a. nearterm surge in fossilfuel use.
Energies, power regulators and scientists in a half-dozen. nations told Reuters the unexpected development in power need. driven by the increase of expert system and cloud. computing is being met in the near-term by fossil fuels like. natural gas, and even coal, due to the fact that the pace of clean-energy. releases is moving too slowly to maintain.
In the United States, home to a third of world data centers,. energies are adding brand-new gas plants and postponing the retirements. of fossil-fuel power plants as a multitude of sprawling brand-new information. centers plug in to the grid. In Poland, Germany and Malaysia,. coal could likewise remain in the mix, according to interviews with. business executives, regulators and experts. The outlook poses a brand-new obstacle to world governments, now. collected at the UN's yearly climate conference in Baku, which. are currently struggling to meet ambitious targets to decarbonize. power systems.
COP29 host Azerbaijan held the first-ever Digitalization Day. at a world climate summit and launched a declaration, endorsed. so far by 68 nations consisting of China and Korea, to restrict the. environmental effect of digitalization.
The outlook likewise reveals the drawbacks of data-company. promises to be green. Business consisting of Meta Platforms. , Microsoft and Amazon.com are. dedicating to sourcing renewable resource and zeroing out. emissions with clean power and balance out credits - however often that. just means siphoning tidy power out of the grid that might have. been utilized somewhere else. On the other hand, arrangements by information service providers to power new data. centers with innovative atomic power plants or resurrected nuclear. plants doubt and years off.
I think everyone agrees that we need increasingly more. renewable resource to keep up with a growing demand, stated Meta. spokesman Jim Cullinan. I believe it is up to the energies to. discuss how they will fill the supply.
Amazon told Reuters that purchasing brand-new renewable resource. for the grid, consisting of in areas relying greatly on fossil. fuels, belongs to its method to decarbonize.
Financial investment bank Morgan Stanley projects the worldwide. data-center market will produce around 2.5 billion metric tons. of carbon dioxide-equivalent through the end of the years, the. equivalent of Russia's yearly emissions.
PUMPING THE GAS
Northern Virginia in the U.S. has the most significant concentration. of data centers in the world. Energy Rule, which. serves the area, has an answer: gas.
The utility is constructing a 1,000-megawatt gas plant in. Chesterfield County and just recently slashed its 15-year forecast. for renewables to 80% from 95% of its power mix.
In general, power need in our service area is growing. at an unprecedented pace, said spokesman Aaron Ruby.
A number of other U.S. energies said they are keeping. fossil-fired power plants longer and constructing new facilities as. data-center need grows, according to a Reuters evaluation of. recent company incomes calls.
Entergy, for example, began constructing its very first. natural gas-fired power plant in a half-century, the business. stated. The 754-MW power station will serve 2 Amazon data-center. complexes being built in Mississippi.
Almost half of energy NiSource's new $19.3 billion. capital expenditure plan through 2029, meanwhile, will be spent. on gas system improvements, the company stated. NiSource. covers a few of the most quickly developing information center markets. in parts of Indiana, Ohio and Virginia.
Rob Thummel, senior portfolio manager at Tortoise Capital,. said natural gas is a clear response for data centers.
It's simply the lowest cost, most trustworthy and it is. decarbonizing in terms of it replacing coal, he stated. Is it. ideal service? No. But I do not know if we have an ideal. option to power these data centers.. S&P stated data centers might include in between 3 billion and 6 billion. cubic feet each day to U.S. natural gas need by the end of the. decade.
That will worsen the U.S. efficiency on emissions, possibly. for years, clean-energy consultancy RMI said.
Information centers are just a warm-up act compared to the quantity. of electrification we're going to have moving forward. And if our. initially instinct is to begin developing gas plants and nuclear. plants in order to do that, we're just going to produce an energy. system we can not afford, RMI CEO Jon Creyts stated. President-elect Donald Trump has said he intends to increase the. U.S. power system when he takes office, and sources near to his. shift group have said his strategies are likely to focus on gas. advancement over renewables.
COAL IN THE MIX?
Research study company McKinsey said in a report last month most of. the increase in data-center power consumption in the European. Union by 2030 will be supplied low-carbon sources.
McKinsey declined to elaborate when asked whether low-carbon. sources included natural gas, and whether the pattern could. prolong the life of coal.
In some parts of Europe, information centers will need coal.
In Poland, for example, a rush of new datacenter projects. will require to run at least partly off baseload sources like. coal because of the still-low volume of renewables in the. country, according to Szymon Kowalski, deputy head of Re-Source. Poland, a platform for corporate renewable resource sourcing.
The share of coal in Poland's energy mix has been falling. for several years as it increases renewables, but still stood above 60%. in 2023, according to the International Energy Agency.
In Ireland, meanwhile, information centers now account for over 20%. of electricity usage, according to the IEA.
System operator EirGrid informed Reuters it will satisfy need. with 650 MW of momentary emergency situation generation capacity, and by. postponing the retirement of older generators. It said gas. would be a vital part of the mix.
Ireland's only coal station, ESB Group's 915 MW Moneypoint. plant, extended its retirement date in 2015 to 2029 from 2025,. however intends to burn fuel oil instead of coal throughout that period.
In Germany, Microsoft this year revealed strategies to expand. data-center capability with a 3.2 billion euro ($ 3.38 billion). financial investment, near the 400-meter-deep Hambach coal mine.
Microsoft declined to say whether the project would depend on. coal. We are still in an early stage of the job, that's why. we do not comment, representative Jo Klein said.
In Malaysia, some data business are taking power from the. coal and gas-dominated grid rather of paying a premium for. renewables, according to a federal government official knowledgeable about the. matter. Less than 50% of the green power Malaysia has actually sought to. auction this year has actually been bought, the official said.
(source: Reuters)