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Gold bulls claim that the broader rally will continue despite investors' rush for cash
Analysts and traders said that gold's appeal will remain unchanged despite the fact that some investors prefer the dollar as a safe haven. The experts said that the sharp drop in?gold price on Tuesday would likely attract buyers. The dollar index rose as traders sought safety. The dollar index rose by 0.5%, reaching a three-month high. DOLLAR STRENGTH PUSHES SILVER LOWER The 'dollar strength' has weighed heavily on gold, which is usually viewed as a hedge against inflation and a safe place to be during uncertain times. The dollar's surge pushed spot-gold to its lowest level since February 20, down 4%, at $5,136. Robert Gottlieb said that if there are profits to be made, it's best to take them off the table wherever possible. "But, have the fundamentals changed?" No. "We still face persistent geopolitical, economic and financial uncertainty." The extreme volatility of the gold market on January 29, when it hit a record high of $5,594.82 and then plummeted over the following two sessions has made traders cautious. Gottlieb said, "People learned to be careful on January 30th - to determine whether it is a knife falling or a dip and not to get caught." INCREASED GOLD PURCHASE FORECAST BNP Paribas has raised its average gold price forecast for 2026 by 27%, to $5,620. A peak of $6,250 is likely by the end of 2026. A precious metals trader stated that the fall of gold to $5,100 will continue to attract Asian demand as safe haven buying continues. He requested anonymity as he wasn't authorized to speak with media. He said that the sale of gold this week was greater due to the large amount of purchases made on Friday, ahead of Saturday's start of the U.S. and Israeli air war against Iran. Profit-taking followed the gold price closing at $5,260 on Monday, its highest level since 30 January. The S&P 500 index, which fell 1.5% last week, has added to the pressure placed on gold. Sharp equity corrections force investors to sell safe-haven holdings such as bullion to free up cash for broker deposits. Adrian Ash, BullionVault's head of research, said that traders who were long gold before the New Year can use their gains to profit from margin calls on equities. Gold prices surged by 64% in 2012, largely due to investors' cash flows into bullion. They were worried about S&P 500 gains in 2025. "Their performance is like a coin flip - day-to-day and month-to-month." "If you think this war will drag on, God forbid," Ash said, gold's appeal as a long-term safe haven is hard to beat. Gold tends to increase over a 12-month period when stocks are down from the previous year. According to Ash's calculations over a five-year period since 1970, gold was always higher than the five years prior when the S&P 500 index fell during that time. (Reporting and editing by Veronica Brown, Barbara Lewis, and Polina Devitt)
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Fed faces new risks to inflation and growth despite US energy resilience
Federal Reserve officials began assessing the risks of an expanding conflict in the Middle East, despite the relative resilience of the U.S. economy to energy price shocks. New York Fed President John Williams stated on Tuesday that a potentially open-ended conflict between the U.S., Iran and their proxies could have a spillover effect to the U.S. through lower asset prices, trade shocks for U.S. allies and higher inflation. It will take some time to assess the net impact of this conflict on the U.S. Economy and Fed policy. There is no way to compare the current situation with other similar events, such as the Russian invasion of Ukraine in 2022, which affected both the economy and prices in Europe, but didn't have a major effect on the U.S. Williams said that no one knows how long the current situation will last, or what the wider implications are. Past experience shows that the movements in oil prices we've seen thus far do not fundamentally change the economy. But we'll "wait and see" It's a development that could hit both our mandated targets in an opposing manner?in a short-term - increase inflation and possibly slow global growth. The important question, however, is how much of an impact this has on the U.S. and how long-lasting these effects are. Williams told reporters that the "transmission" is mainly through asset prices and financial markets reactions. These have so far been relatively muted. GLOBAL OIL PRICES SHOCK IS UNLIKELY. The initial reaction on the financial markets to President Donald Trump's war against Iran was to place a premium on inflation risk. Investors bet on a slightly tighter U.S. monetary policies and slower rate cuts before President Donald Trump launched massive attacks on Iranian targets in consultation with Israel. Trump promised to continue the attack as long as necessary to remove the Islamist regime whose 1979 overthrow led to an oil price shock around the world. It also stoked the inflation in the United States. Williams cited the impact of the conflict on U.S. trade partners, especially in Europe, as well as investor perceptions of risk and uncertainly, which could have a significant impact on the Fed's response to monetary policy and the economy. The Fed's rate-cutting plans were further slashed by the fierce selling on Tuesday in the Treasury and Rates Futures markets, amid rising oil prices that heightened concerns about inflation. U.S. Oil prices have risen by more than 13% in the past week since the weekend's attacks which killed Iran's Supreme leader Ayatollah Ayatollah Khamenei. This has prompted threats of counter-attacks, including the closure of the Strait o'Hormuz. The Strait is responsible for about 20% of world crude oil flows. According to AAA, U.S. gasoline retail prices have increased by 10 cents per gallon over the past 24 hours. AAA predicts that more increases are likely in the near future. The rate futures sale?lowered to 35% the chances of a Fed rate reduction?in the month of June, when Kevin Warsh (Trump's nominee for Fed Chair Jerome Powell) would be leading a policy-setting session for the first-time. The traders now see only a 55% probability of a Fed rate cut in July. This is down from 70% recently. The perception of a further cut beyond the initial one has also dropped. (Reporting and editing by Chizu Nomiyama, Paul Simao and Ann Saphir)
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Standard Chartered increases Brent 2026 forecasts in response to Middle East turmoil
Standard Chartered has raised its Brent forecasts for 2026 and sees asymmetric upside risks to their projections if the Middle East 'conflict escalates 'further, and impedes production from Iran and other regional producers. The bank increased its forecast for the first quarter of 2026 Brent to $74 from $62, and raised its forecasts for the second quarter to $67 per barrel from $63; it also increased its forecasts for '2026 on average to $70, from $63.50. Brent futures rose 6% to $82.38 per barrel at 1749 GMT, as the U.S. and Israel 'war against Iran' widened. This caused disruptions in oil and gas fuel deliveries throughout the Middle East and heightened fears of a long-term conflict. Israel has also?attacked Lebanon. Iran responded by striking energy infrastructure in Gulf nations and tankers on the Strait of Hormuz. This is where a fifth of world oil and liquefied gas passes. Standard Chartered stated that the perception of loose market equilibrium had dampened upward price risks. However, it added 'that a tighter focus has been placed on the lack of spare capacity as well as the concentration of transit routes. It expects this theme to continue. The bank said that "the forward curve has notably strengthened, and OPEC has resumed its incremental production?"increases." On Sunday, OPEC+ agreed to a modest increase in oil production of 206,000 barrels a day for the month of April. (Reporting by Anushree Mukherjee in Bengaluru)
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Exxon will send team to Venezuela within a few weeks.
Exxon Mobil plans to send a team of technical experts?to Venezuela within a few weeks after working out the logistics and security arrangements. Jack Williams, senior vice president of Morgan Stanley, said that the U.S. Oil Major will work with Venezuelan Government and "we would be interested in returning" if the right terms for investment are in place. After U.S. troops?captured Maduro and removed him from office, President Donald Trump urged oil companies to invest $100 billion in Venezuela and rebuild its?energy sector. Exxon's assets in the country have been expropriated two times before, and the company says it needs durable investment protection before returning. "We are familiar with the resource." Williams stated that they had a?very successful operation' there. He said that Exxon had?improved their technology to work with heavy oil over the years since leaving Venezuela in 2007. "I 'think we can do better than before in terms of the technology toolkit we bring." Sheila Dang reported from Houston, and Tanay dhumal in Bengaluru. Franklin Paul and Chris Reese edited the story.
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Heavy rains from El Nino's coastal region threaten Peru's booming agricultural exports
Business leaders and climate agencies have warned that Peru's agricultural export sector, which is booming, could be hit by heavy?rains this year due to the coastal El Nino weather phenomenon, as its effects are already being felt on local fruit plantations. El Nino coastal is a climate event that occurs periodically. It is caused by abnormally warm water, which is found primarily along the north Pacific coasts of Peru and Ecuador. This causes heavy rains. Gabriel Amaro is the leader of the agricultural producers association. He said that while the phenomenon was weak at the moment, it had destroyed 6,000 hectares of fruit crops in northern Peru and could moderate by July. Amaro said that the rains were not in their plans, and companies had already taken precautions to protect infrastructure. Peru, traditionally a mining nation, broke records in its agricultural sector with $15 billion worth of exports. This was up 17% on the previous year. The country exported blueberries, grapes avocados cocoa beans asparagus mangoes citrus fruits to the U.S. Farmers in Peru are harvesting avocados now and will start picking blueberries, citrus fruit and pomegranates by May. Amaro predicted that export growth would be lower this year. RAINFALL IN MARCH: ENFEN, Peru's climate agency, predicts above-normal rains on Peru's north coast beginning in March. However "extreme events" are not ruled out. Mario Salazar, the chairman of the agro industry committee of the private importers' association told a press conference recently that the production of mangos was already down by 10%, and blueberries were at risk of developing fungal growth after the rains, and then drying out due to the post-rain heat. Blueberries are the top blueberry export from Peru, which accounted for $2.5 billion in revenue last year. The Lima Chamber of Commerce estimates a weak to moderate coastal El Nino could cause a?daily loss of over 291 millions soles ($85million) in the agriculture, manufacturing and trade sectors of seven Peruvian Regions. Last week, heavy rains damaged the transport infrastructure and basic services. The government declared a state of emergency in 14 regions. CENEPRED, the Peruvian disaster agency, reports that 85,000 people have been affected by floods and landslides in the rainy season which began late last summer. In 2017, the 'coastal El Nino' left 162 dead and caused economic losses equal to 2% of Gross Domestic Product. Forecasters predict that global El Nino, which affects temperatures and rainfall around the world, could start this year.
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EU pushes for green steel, a scarce metal, to fix auto emissions
Buy expensive steel that is made using a "nascent" technology powered by green hydrogen, which barely exists? Under European Union plans, which aim to bolster the steel industry of the EU while still meeting?its environmental targets, this is what Europe's automakers face. They are already under pressure from a fiercer competition in China. The EU changed its CO2 emission targets for new cars in December to 90% by 2035, from 100%. This was a shift from the earlier 100% target. EU WANT TO BOOST EUROPEAN STAINLESS SECTOR The new proposal is tied to the EU Industrial Accelerator Act, due to be introduced on March 4. Automakers, who account for a five percent of Europe's demand for steel, must compensate?10% by using low-carbon steels and alternative fuels. What's the catch? The catch? According to the pure-play green metal hopeful,?Stegra, this steel will cost a third more when it is available. Steelmakers such as ArcelorMittal, Salzgitter and others are turning to scrap for production. Thyssenkrupp is renegotiating its subsidy agreements with Brussels. The Leadership Group for Industry Transition, an initiative that brings together governments and global companies, reported planned green steel capacity of around 28 million tonnes by 2050. However, calculations show only a third is currently under construction. Around 18 million tons of the planned capacity will be in Europe. Last month, ArcelorMittal's CFO GenuinoChristino said that "we don't have hydrogen readily available. At least not at the scale required." The German auto lobby has criticised EU's plan. Hildegard Müller, VDA President in December, said: "This means our industry will once again be dependent on developments that it cannot influence." Nearly a dozen experts and executives from the steel and automotive industries said they expect Brussels to introduce policies that will create a market for low emission steel and encourage demand. The initial proposal is expected to be a 'limited' one, with some key elements being delayed. Chris Heron is the secretary general of E-Mobility Europe. He said that there was confusion among many people about the Commission's proposals. They were trying to figure out what would be realistic and how the market might look. DEFINITION "WILD WEST" Another challenge is the lack of a consensus on what constitutes green steel, or low carbon steel. One steel executive referred to the current market as "wild west". ? The study found that companies used a variety of?terms, metrics, and thresholds when marketing their low-emission products. The switch from coal-based blast-furnaces to hydrogen-based direct-reduced iron (DRI), and electric-arc furnaces, requires billions of euro in investments. Instead, many steelmakers are pivoting to a more conservative, step-bystep strategy that focuses on electric arcs furnaces. These can run initially on scrap, before switching to hydrogen-based DRI. EAFs that are fed by scrap emit less carbon dioxide than blast furnaces. However, many players in the industry say they can't be a long-term solution due to the limited availability of high-quality waste. Automobile manufacturers are also adapting. Volvo Car has agreed to use scrap-based fossil free steel and then switch to hydrogen-based'supply' once production is established. Christian Levin said, "We think there will be demand." Christian Levin is the CEO of Traton Scania. "But we have not offered it commercially yet, and we do not buy it yet because it's not available."
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China's Foreign Minister tells Israeli counterpart to stop attacking Iran
According to the ministry, Wang Yi, the Chinese Foreign Minister, told Gideon Saar, his Israeli counterpart, that China opposes the military strikes by Israel and the U.S. on Iran, and demanded an "immediate cessation" of hostilities. "Force is not a solution to problems. It often causes new ones, and has serious long-term effects." It quoted Wang in a phone call as saying that the real value of military power is not in combat but in preventing conflict. The U.S. and Israeli air 'war against Iran' has caused explosions in?Tehran, Beirut and around the globe. Wang said that China is committed to resolving regional and international issues through dialogue and negotiations and will continue playing a positive role in the situation. The call on Tuesday follows the three calls that the top Chinese diplomat made with the foreign ministers from Iran, Oman, and France on Monday, where he called for the Gulf countries to come together to fight external interference. Wang also spoke to Sergei Lavrov, the Russian foreign minister, on Sunday regarding the Iran crisis. Wang has not spoken with Marco Rubio, the U.S. Secretary of State, since Saturday's U.S.-Israeli?strikes against Iran, in which the?Supreme leader Ayatollah?Khamenei, among other senior Iranian officials, was killed. Reporting by Shi Bu and Yukun Zhang, Editing by Aidan Lewis & Gareth Jones
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Colombia's Grupo Agos wants to reduce its debt by less than one third by 2030
The Colombian industrial conglomerate Grupo Agos, which is stepping down as chief executive on Tuesday, expects to reduce its net debt by 2030 from 265.3 million pesos to 300 billion pesos. The executive said that the company would also propose a 500 billion peso share buyback program to be implemented over the next three year period, and expects its portfolio to grow by 1.9 times by 2030. Grupo Argos has stated that it will explore all options to allow Cementos Argos, its subsidiary, to receive a definitive 'compensation' for the expropriation in 2006 of its assets, as part its plans to restart production. Cementos Argos, in February last year, announced that it would increase its monthly cement exports from Venezuela to over 5,000 tons "very soon" as part of its expansion plan for the region. Juan Esteban Calle will replace Velasquez in April as CEO. The Colombian conglomerate announced on Monday that its net 'profit' for the last quarter of 2025 was down 29%, to 166 billion pesos. They cited a large base of comparison from one-off events which boosted earnings in the previous period.
Oil funds turn bullish as Mideast conflict magnifies: Kemp
Portfolio financiers are increasingly bullish about oil as Saudi Arabia and its OPEC? allies restrict production in the face of increasing demand and the shadow war in between Israel and Iran spills into the open.
Hedge funds and other money managers bought the equivalent of 37 million barrels in the 6 crucial petroleum-related futures and options contracts over the 7 days ending on April 2.
Funds have actually been purchasers in 10 of the last 16 weeks, buying the equivalent of 446 million barrels since the middle of December, according to reports submitted with exchanges and regulators.
As an outcome, the combined position has actually skyrocketed to 653 million barrels (63rd percentile for all weeks because 2013) from a record low of 207 million on Dec. 12.
Chartbook: Oil and gas positions
Funds have actually currently ended up being bullish about Brent, with an internet position of 300 million barrels (69th percentile) and bullish long positions outnumbering bearish shorts by a ratio of 5.27:1 ( 62nd percentile).
There is more caution about the outlook for U.S. crude rates provided continued output growth from shale, with a net position of 208 million barrels (38th percentile) and a. long-short ratio of 3.93:1 (48th percentile).
Even in U.S. crude, nevertheless, the combined position in NYMEX. and ICE WTI has actually risen from a record low of 31 million barrels. on Dec. 12.
Saudi Arabia and its OPEC? allies have actually extended their. production cuts till completion of the second quarter, lifting. Brent prices to their greatest for more than five months.
Brent's six-month calendar spread has moved into a. backwardation of more than $5 per barrel (96th percentile for. all trading days considering that 2000) from a contango of 70 cents (37th. percentile) on Dec. 13.
Economic information shows restored growth in production across. the United States, China and even in Europe, which will boost. usage of middle extracts such as diesel and gas oil.
At the exact same time, the undeclared conflict in between Israel and. Iran has heightened after Israeli warplanes last week assaulted. an Iranian diplomatic structure in Damascus eliminating several. officers from the Islamic Revolutionary Guard Corps.
Iran's risk to strike back has increased the likelihood of. an escalation that could interrupt oil production centers and. tanker routes around the Persian Gulf, improving prices and. spreads.
U.S. NATURAL GAS
Financiers made couple of modifications to gas positions for the 4th. week running, after an earlier buying rise in late February and. the start of March occasioned by the announcement of production. and drilling cuts blew over.
Hedge funds and other cash managers trimmed their net brief. position to 332 billion cubic feet (24th percentile for all. weeks because 2010) on April 2 from 1,675 bcf (3rd percentile) on. Feb. 20.
Working gas stocks were 629 bcf (+39% or +1.36 requirement. deviations) above the previous ten-year average on March 29 up from. a surplus of simply 64 bcf (+2% or +0.24 basic variances) at. the start of winter on Oct. 1.
Gas drilling activity has started to decrease after. futures rates fell to the lowest levels in genuine terms for more. than 3 decades in February and March.
The number of rigs drilling primarily for gas had actually been up to. simply 110 on April 5 below 121 7 weeks previously and the. least expensive for more than 2 years.
Minimized drilling should lower production rates towards the. end of the year and aid rebalance the market, however it will take. time to erode the huge overhang of inventories inherited. from the moderate winter season of 2023/24.
After stopping working and trying to recognize a turning point three. times over the last 12 months, fund managers have actually ended up being. cautious about the timing of any sustained price healing.
Associated columns:
- U.S. oil and gas output was seriously hit by winter storm. ( April 3, 2024)
- Distillate futures see huge outflow of speculative cash. ( April 2, 2024)
- Oil market saw craze of hedge fund purchasing (March 25,. 2024)
John Kemp is a market analyst. The views expressed. are his own. Follow his commentary on X https://twitter.com/JKempEnergy.
(source: Reuters)