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Gold continues to fall on fears of an interest rate hike in the US
Gold prices sank on Monday due to a growing 'fear of an increase in U.S. interest rates? after a positive jobs report. Meanwhile, renewed hostilities across the Middle East drove oil prices up and increased inflation fears. Gold spot fell 1% at $4,287.66 an ounce as of 0544 GMT. Prices dropped about 3% Friday, reaching their lowest level since March 24. U.S. Gold futures for August delivered?were down by 1.2% to $4,311. The market's hawkishness is reflected in the Fed futures, said Kelvin Woong, senior analyst at OANDA. He added that higher Treasury yields are further pushing gold down. The yield on benchmark 10-year U.S. Treasury notes rose, after jumping to two-week highs in the previous session. This increased the opportunity cost for holding non-yielding gold. Israel claimed it had struck military targets in western and central Iran, despite the fact that U.S. president Donald Trump reportedly warned Israeli Prime Minister Benjamin Netanyahu not to launch any further attacks. Oil prices increased by more than $3 per barrel, causing inflation fears and interest rate increases to rise. Gold is often seen as a hedge to inflation. However, rising interest rates can weigh on this non-yielding precious metal. The U.S. Economy posted a strong third consecutive month of job gains in the month of May. This confirms that the labour market is gaining momentum after its stumble last year, and gives the central bank more room to maintain rates despite rising inflation caused by the Iran War. According to CME Group’s FedWatch tool, the markets are pricing in an increase by the Federal Reserve before year-end. There is a 72% probability of this happening by December. Cleveland Fed President Beth Hammack stated on Friday that the new jobs numbers showed the 'labour market is roughly balanced?and close to full employment. Meanwhile, continued high inflation may require the Fed raising rates soon to control it. Silver spot was down by 2.2% to $66.33, platinum fell 2.1% to 1,739.78 and palladium dropped 1.5% to 1,207.50. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
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Gold continues to fall on fears of an interest rate hike in the US
Gold prices extended their?losses Monday due to a growing?fear of an U.S. rate?hike?following a strong jobs?report, while renewed hostilities and inflation concerns in the Middle East drove oil prices up. By 0429 GMT, spot gold had fallen 0.2% to $4319.09 an ounce. Prices dropped by about 3% Friday, reaching their lowest level since March 24. U.S. Gold Futures for August Delivery?were down by 0.5% to $4,343.20. The market's hawkishness is reflected in the Fed futures, said Kelvin Woong, senior analyst at OANDA. He added that higher Treasury yields are further pushing gold down. The yield on benchmark 10-year U.S. Treasury notes rose, after soaring to a 2-week high in the previous session. This increased the opportunity cost for holding non-yielding gold. Israel claimed it had struck military targets in western and central Iran, despite the fact that U.S. president Donald Trump reportedly warned Israeli Prime Minister Benjamin Netanyahu not to launch any further attacks. Oil prices increased by more than $3 per barrel, causing inflation fears and interest rate increases to rise. Gold is often seen as a hedge to inflation. However, rising interest rates can weigh down on this non-yielding precious metal. The U.S. Economy posted a strong third consecutive month of job gains in the month of May. This confirms that the labour market is gaining momentum after its stumble last year, and gives the central bank more room to maintain rates despite rising inflation caused by the Iran War. According to CME Group’s FedWatch tool, the markets are pricing in an increase by the Federal Reserve before year-end. There is a 72% probability of this happening by December. Cleveland Fed President Beth Hammack stated on Friday that the new jobs figures show the labour market is roughly in balance and near full employment. However, the continued high inflation could require the Fed raise rates quickly to contain it. Silver spot was steady at $67.86 an ounce. Platinum lost 0.5% at $1,767.42 and palladium remained unchanged at $1.225.67. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
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London Copper nears 1-week Low on Continued Inflation Worries
London copper was near its one-week lows Monday due to a combination of 'weaker Chinese metal prices' and a growing expectation that the Federal Reserve will be pushed towards rate hikes by strong U.S. job data and higher oil costs. Benchmark 'three-month copper' on the London Metal Exchange rose 0.38% at $13,570.5 per metric ton as of 0331 GMT. LME copper fell to its lowest level since May 28 due to a rising dollar, and inflation fears. Industrial metals are more dependent on economic growth, so higher interest rates can dampen their prospects. Official data showed that the U.S. economy created 172,000 new jobs in May. This was more than double what analysts expected. The strong data was released less than two weeks before Kevin Warsh made his debut as the head of the U.S. Federal Reserve. According to CME's FedWatch, expectations of a rate hike in December have risen to 78%. The most traded copper contract at the Shanghai Futures Exchange fell 1.5%, to 104160 yuan (15,354.45) per ton. The trend was a sell-off in tech stocks across Asia as China and Hong Kong opened lower Monday, following their U.S. counterparts. The Yangshan Copper Premium The price of copper in China, which reflects the demand for imports, dropped to $64 a ton at the end of Friday's trading, its lowest level since April 30. China has historically been sensitive to high prices. Oil prices increased by?3.68% Monday, after Iran and Israel exchanged?fire Sunday and Monday. Aluminium, zinc, and lead all saw a slight increase. Nickel also increased by 0.4%. Tin, however, fell by 1.48%. On the SHFE, elsewhere, aluminum fell 0.74%. Zinc also dropped 0.74%. Lead dipped by 0.21%. Nickel gained 0.79%. Tin plunged 5.97%.
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The morning bid rally in Europe turns ugly
Rae Wee gives us a look at what the future holds for European and global markets. A sell-off in technology stocks spread across Asia on Monday, as investors slammed brakes on AI's red-hot rally. South Korea's KOSPI fell by more than 8% and triggered circuit breakers. The move?followed?that of the Wall Street shakeout last week, after an explosive U.S. employment report heightened expectations for Federal Reserve rate hikes - a bane to growth stocks. According to CME FedWatch, the markets now price in a greater than 70% chance of the Fed raising rates in December. This is up from just 45%?a week earlier. The nonfarm payrolls data released on Friday came only days after Broadcom reported a disappointing result last week. This sent its stock plummeting, and also dragged down the share prices of technology companies. When expectations are so high, a slight miss can be a major blow. Most analysts and investors have dismissed the latest sell-off as "a healthy correction" with concentration risks and leveraged position?amplifying market movements. However, it is still unclear how long this rout will continue. The dollar reached a new two-month high in other markets. This was due to the Fed's bets on a rate hike and the resilience of the U.S. economic system. Investors are on high alert as Tokyo is expected to continue buying yen in order to stem the currency's decline. On Monday, revised gross domestic product figures showed that Japan's economy had lost momentum from the previous quarter to the first three months of this year. This was due to a slowdown in capital expenditure. The data calendar is light for Monday, but the week ahead will be dominated by the SpaceX listing, U.S. Inflation data and a European Central Bank meeting. The war in the Middle East continues, with Israel claiming to have struck military targets on?western Iran and central Iran, despite the fact that U.S. president Donald Trump had reportedly instructed Israeli Prime Minister Benjamin Netanyahu not to launch any further attacks. Market developments on Monday that may have a significant impact Boeing will?release numbers for May deliveries and orders - Global airline CEOs gathering for an event in Rio de Janeiro France: Reopening the 3-month, 4-months, 6-months and 11-months government debt auctions - Germany: Reopening 5-month and 11 month government debt auctions
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Iran's envoy in Moscow said that the strait of Hormuz will be open, but there will be transit fees.
Iran's ambassador in Moscow was quoted on Monday as saying that the Strait of Hormuz would be open, but with new?conditions set by Iran? and?Oman?, including a?transit fee. The U.S. and Israeli war?on Iran 'has largely reduced oil flows through the strait. Before the conflict, one-fifth the world's crude oil passed through the strait. Recently, several tankers left the Gulf. However, oil and LNG flows remain severely constrained. In an interview published Monday, Ambassador Kazem Jalali said that the strait would be opened, but new conditions would be set by the Iranians and Omanis. We understand that Iran, Oman and other countries provide certain services related to the strait. He said that fees would be charged for?those services? without elaborating. Iran claims that a permanent agreement for peace should allow it the right to charge fees on ships transiting the Strait. These fees would depend on the type of vessel, the cargo, and the conditions. Donald Trump, the U.S. President, is strongly opposed to this position. The U.S. warned Oman in late May not to participate in any effort to impose a tax with Iran. Treasury Secretary Scott Bessent stated that Oman's ambassador had told him there was no plan to impose this toll. Israel announced on Monday that it had struck military targets in central and western Iran even though Trump reportedly asked Israeli Prime Minister Benjamin Netanyahu not to launch any more attacks. Japan, which imported?95%?of its oil needs from the Middle East prior to the war, has said that it didn't pay a fee when a crude oil tanker linked to Japan passed through the waterway last May.
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Gold continues to fall on fears of an interest rate hike in the US
Gold prices continued to fall 'on Monday, due to fears of a rate hike in the U.S. after a strong jobs report. Meanwhile, renewed hostilities across the Middle East drove oil prices up and increased inflation concerns. By 0302 GMT, spot gold had fallen 0.4% to $4313.11 an ounce. Prices dropped by about 3% Friday, reaching their lowest level since March 24. U.S. Gold Futures for August Delivery?were down by 0.7% to $4,336.30. The market's hawkishness is reflected in the Fed futures, said Kelvin Woong, senior analyst at OANDA. He added that higher Treasury yields are further pushing gold down. The yield on benchmark 10-year U.S. Treasury notes rose, after reaching a two-week high in the previous session. This increased the opportunity cost for holding non-yielding gold. Israel claimed that it had?hit military targets?in central and western Iran on Monday despite the fact that U.S. president Donald Trump reportedly warned Israeli Prime Minister Benjamin Netanyahu not to launch any further attacks. Oil prices increased by more than $3 per barrel, causing inflation fears and interest rate increases to rise. Gold is often seen as a hedge to inflation. However, rising interest rates can weigh on this non-yielding precious metal. The U.S. Economy posted a strong third consecutive month of job gains in the month of May. This confirms that the labour market is gaining momentum after its stumble last year, and gives the central bank more room to maintain rates despite rising inflation caused by the Iran War. According to CME Group’s FedWatch tool, the markets are pricing in an increase by the Federal Reserve before year-end. There is a 72% probability of this happening by December. Cleveland Fed President Beth Hammack stated on Friday that the new jobs figures show that the labour market is roughly in balance and near full employment. However, the continued high inflation could require the Fed raising rates soon to control it. Silver spot fell by 0.4%, to $67.56 an ounce. Platinum lost 0.5%, to $1,767.15, and palladium remained at $1,225.66. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
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Saudi Arabia cuts its July OSP for Asia sharply amid low demand
Saudi Arabia cut its official'selling prices' (OSPs), for crude oil sold to 'Asia, in July, for a second consecutive month. This was expected, since spot premiums fell on a sluggish demand despite the supply disruptions caused by U.S. - Israeli war against Iran. A document reviewed on Monday by?showed that the July OSP was set at $9.50 per barrel over the average Dubai and Oman quote, which is $6 lower than the OSP in June. The July OSPs of other Saudi grades for Asia fell by $6 per barrel compared to the previous month. The price reduction was in line with what the market expected following a decline in price and tepid trade on the spot market during May. Data showed that the cash Dubai price premium to swaps was $9.59 per barrel in April, down from an average of $13.92 a month earlier. Spot Oman premiums also showed a similar trend. Refiners are cutting runs and drawing on inventories in China, which is the No. Due to the?mounting refining loss, China, the world's No. In?May, and June, they lifted less Saudi crude. Even so, OSPs for Asia in July are still much higher than they were before the Iran War. The 'conflict' has effectively halted the energy flow out of the Strait of Hormuz.
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The AI rally is halted by a tumbling tech darling
As investors fled from the most popular AI-linked stocks, fears that the bull run had gone too fast and too far prompted a rise in 'oil prices. Last week's disappointing outlook from chipmaker Broadcom, and Friday's surprisingly positive U.S. employment report have triggered a market rout. Traders are pricing in a rate increase this year. The benchmark KOSPI index, which is heavily weighted with chips and has been the best performing market in the world this year, was the first to fall in Asia, falling 5%. This brings the index down 13% since its record high last week. The Nikkei 225 index fell by almost 4%, with the biggest falls coming from?market darlings in the supply chain for computer chips. Taiwan's benchmark dropped by 3.9%. Nasdaq Futures are trying to recover after a steep selloff last Friday. European futures have fallen 1%. The Nasdaq fell 4.2% on the Friday. Marc Velan is the head of investments for Lucerne Asset Management, a Singapore-based asset management firm. "Korean tech names were among the best performers in the world and heavily owned. When rate expectations changed after the jobs report they became a source of natural liquidity." On Monday, the yield on 2-year Treasury bonds was?up 1.6 basis points to 4.1782%. Bob Savage is the head of BNY's macro-markets strategy. The key question is whether this is a healthy break in the nine week equity rally, or a peak. SpaceX's and Anthropic's IPOs are part of this pause - to either make room for a new market cap, or to rethink the value. INFLATION AND THE ECB Ahead Brent crude futures rose?about 3.5% on Monday to $96.45 per barrel after Israel announced it had struck military targets in central and western Iran. The biggest news of the week is likely to be the SpaceX listing. It will price on Thursday, and then trade on Friday. Inflation will also dominate, with U.S. Consumer Price Data due on Wednesday, and central bank meetings in Canada and Europe. Last week, bitcoin experienced its biggest weekly decline since the collapse in 2022 of the crypto exchange FTX, a drop of about 16%. On Monday, it was just below $63,000. Brokers are worried that SpaceX's IPO could cause other assets to fall in value. Nick Ferres of?Vantage Point Asset Management, Singapore, said that the market has shifted away from moderate inflation, rate cuts, and towards a potential "overheating" which could lead to higher Treasury yields and a path of higher short-term interest rates, as well as tighter liquidity. OPEC+ agreed on Sunday to a fourth increase in their oil production targets in the same number of months. The dollar held firm above 160 yen in currency trading and pushed the Australian Dollar to $0.7055. The euro was hovering at $1.1531. Reporting by Tom Westbrook, Editing by Aurora Ellis and Shri Navaratnam; Thomas Derpinghaus.
Asia stocks rally on Fed cut bets; Aussie jumps on tasks data
Asian stocks gotten on Thursday, tracking Wall Street's techled rally overnight after an asexpected reading of U.S. consumer inflation cemented bets for a Federal Reserve interestrate cut next week.
Japan's Nikkei topped 40,000 for the very first time given that mid-October, led by advances in chip-sector shares. The exporter-heavy index likewise got a boost from a weakening yen, as traders pared bets for a Bank of Japan rate trek next week.
The Australian dollar surged after work information topped quotes by a large margin, rebounding from Wednesday's weakness following a Reuters report that Beijing is thinking about allowing the yuan to diminish further next year. China is Australia's. top trading partner and the Aussie is typically used as a liquid. proxy for the yuan.
The yuan held its ground above a one-week low after the. central bank set a partially more powerful official repairing.
The tech-heavy Nikkei jumped 1.5% as of 0202 GMT,. while the wider Topix climbed 1.2%.
South Korea's KOSPI added 0.7%, while Taiwan's. benchmark gained 1%.
Hong Kong's Hang Seng advanced 0.4%, and mainland. blue chips were 0.2% greater.
Overnight, the tech-focused Nasdaq shot up 1.8% to. close above 20,000 for the very first time, while the S&P 500. climbed up 0.8%. Futures for both indexes, however,. pointed to 0.2% decreases.
The U.S. customer cost index rose 0.3% last month, the. largest gain given that April, but exactly as forecast by economic experts. in a Reuters poll and not hot adequate to hinder Fed authorities. from normalizing policy, experts stated.
The U.S. CPI print lit a flame in U.S. equity, stated Chris. Weston, head of research study at Pepperstone.
The marketplace has essentially seen among the last remaining. barriers that could thwart belief out of the way, he said,. seeing the coast rather clearer for the illustrious seasonal. chase of returns to play out into year-end.
Traders now lay 97% chances on a quarter-point Fed cut on Dec. 18.
The U.S. dollar held company near a two-week high, enhanced by. higher Treasury yields as information revealing an expanding U.S. budget plan. deficit spurred care on financial obligation.
U.S. 10-year Treasury yields increased on Thursday to. 4.2828%, the highest because Nov. 27.
Significant peers the euro and franc were under pressure ahead of. anticipated cuts of as much as half a portion point at the. European Central Bank and Swiss National Bank later in the day.
The U.S. dollar index, which determines the currency. against the euro, franc, yen and three other significant rivals, was. little altered at 106.51 after touching 106.81 on Wednesday for. the very first time considering that Nov. 27.
The euro ticked up 0.1% to $1.05065 after dipping. to a one-week trough overnight.
The dollar reduced 0.1% to 0.88345 Swiss franc.
It slipped 0.2% to 152.11 yen, edging back from a. two-week high hit Wednesday on the back of a Bloomberg report. that BOJ authorities see little expense in waiting to trek rates. once again. Market-implied odds on a quarter-point increase on Dec. 19 last stood at 27%.
The yuan included 0.2% to 7.2670 per dollar in overseas trading .
Gold rose to a more than one-month high amidst the. guarantee of lower bond yields as the Fed and other significant central. banks alleviate policy. It reached $2,725.79 for the first time because. Nov. 6 before drawing back to $2,710.45.
U.S. unrefined hovered near a 2 1/2- week peak in the middle of the hazard of. additional sanctions stifling Russian oil output.
U.S. West Texas Intermediate crude futures last. traded at $70.20 per barrel, down 9 cents from Wednesday, when. it increased as high as $70.53 for the very first time since Nov. 25.
Brent crude futures eased 3 cents to $73.49 a. barrel.
(source: Reuters)