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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)
International shares rally on rate cut hopes, yen compromises
A gauge of international stock markets rallied on Monday on optimism that major central banks will cut rates of interest this year, while the yen damaged versus the dollar after a rise recently from Japan's. presumed currency intervention.
Stocks on both sides of the Atlantic advanced, and in Asia. too, as a softer-than-expected U.S. labor market report on. Friday led traders to revive bets that the Federal Reserve would. ease monetary policy as early as September.
The dollar index, a procedure of the U.S. currency. against six major trading peers, was lower for a fourth straight. session after Friday's information revealed the most affordable jobs gain because. October soothed any angst that the Fed might even hike once again.
Fed Chairman Jerome Powell informed the marketplace that a walking was. not likely. Those were his words, 'unlikely,' and for that reason they. took that to mean that he wishes to cut, said Brad Conger, chief. investment officer at Hirtle Callaghan & & Co in Conshohocken,. Pennsylvania.
Nevertheless, the inflation outlook is still unsure as the. market hopes rates are limiting enough to slow the economy. and reduce the speed of cost boosts, Conger stated.
New York City Fed President John Williams on Monday stated that at. some undefined point the U.S. central bank will lower its rate. target, but for now financial policy is in a very good location,. while Richmond Fed President Thomas Barkin stated the battle. against inflation will likely need a hit to demand.
On Wall Street, the Dow Jones Industrial Average rose. 0.46%, the S&P 500 gained 1.03% and the Nasdaq Composite. innovative 1.19%.
In Europe, the pan-regional STOXX 600 closed up. 0.53% on signs the European Reserve bank is more positive about. cutting rates as euro zone inflation continues to slow down,. three ECB policymakers said.
Philip Lane, Gediminas Simkus and Boris Vujcic stated. independently that the inflation and development information sealed their. belief that euro zone inflation, which was 2.4% in April, will. sluggish to the reserve bank's 2% target by the middle of next year.
MSCI's gauge of stocks across the globe rose. 0.50% to close at 1,066.73, it's greatest given that June 2022. Markets in Britain and Japan were closed for public holidays.
The dollar index fell 0.07% to 105.10, leaving the euro up. 0.07% at $1.0766.
Goldman Sachs raised its 2024 EPS development forecast for STOXX. 600 companies to 6% from 3% earlier, the bank said in a. note on Friday.
According to Goldman, a 10% yearly rise in Brent rates adds. about 2.5 portion points to yearly EPS development, and a 10%. weaker euro/dollar currency exchange rate includes about the same.
Treasury yields ticked lower as financiers examined last. week's controlled job development, which reinforced view that the U.S. economy was not overheating enough to thwart a rate cut.
The yield on benchmark U.S. 10-year notes fell. 1.3 basis points to 4.487%, from 4.5% late on Friday.
Traders are now pricing in 43 basis points of Fed rate cuts. by year end, with the first cut potentially in September, according. to LSEG's rate probability app. In recent weeks, traders had. priced in just one cut due to signs of sticky inflation.
Oil costs increased after Saudi Arabia treked June crude costs. for many areas and as the prospect of a fast contract for a. Gaza ceasefire offer appeared slim, restoring fears that combat. between Hamas and Israeli forces will resume soon.
U.S. unrefined settled up 37 cents at $78.48 a barrel and. Brent increased 37 cents to settle at $83.33 per barrel.
MSCI's broadest index of Asia-Pacific shares outside Japan. peaked at its greatest level since February 2023. and closed 0.66% higher, while China's blue-chip index. ended up 1.5%.
Hong Kong's Hang Seng Index rose 4.7% recently and. on Friday clocked its longest everyday winning streak given that 2018,. closing 0.55% greater on Monday.
INTERVENTION WATCH
In other places, traders stayed on alert for additional volatility. in the yen, after last week's bouts of presumed intervention. from Japanese authorities to stop a sharp slide in the currency.
Tokyo is thought to have actually spent more than 9 trillion yen. ($ 59 billion) to support its currency recently, as suggested by. data from Bank of Japan, taking the yen from a 34-year low of. 160.245 per dollar to an approximately one-month high of 151.86 over. the span of a week.
The yen returned some of those gains on Monday and. was last 0.63% lower at 153.95 per dollar.
Gold costs climbed up as the dollar compromised. U.S. gold. futures for June delivery settled 0.9% greater at. $ 2,331.20 per ounce.
Bitcoin acquired 0.65% at $63,343.00 and ethereum. decreased 1.2% at $3,077.3.
(source: Reuters)