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As markets wait for clues about Fed policy, gold ticks lower
The gold price eased Monday as investors locked up profits. A stronger dollar also added to the pressure. Meanwhile, the market is now looking at the upcoming U.S. PCE statistics for clues about the Fed's future policy. As of 0957 am, spot gold was down by 0.1% to $3,370.14 an ounce. After reaching its highest level in August since Friday, ET (13.57 GMT) has seen gold prices fall 0.1%. U.S. Gold futures for delivery in December also dropped 0.1% to $3.414.90. The dollar is now 0.2% more expensive than rival fiat currencies. This means that foreign buyers will pay more for bullion in this currency. Peter Grant, senior metals analyst at Zaner Metals, said, "The market has absorbed Powell's Friday comments and may be taking a small profit as we wait for fresh inputs which might give us a better indication about the likelihood of September rate cuts." The gold price rose to a two-week high after Federal Reserve chair Jerome Powell hinted at a possible rate cut during the U.S. Central Bank's next month meeting. Powell stated that the risks of the job market are increasing, but inflation remains a concern and that a decision has yet to be made. According to CME FedWatch Tool, the markets expect a rate cut of 25 basis points at the Fed policy meeting in September. The benchmark 10-year U.S. Treasury rates rose following a sharp drop on Friday, after Powell's address. US/ Gold that does not yield is more attractive in an environment with low interest rates. Investors await U.S. Personal Consumption Expenditures data due on Friday for further clues about the future path of the central bank. Personal Consumption Expenditures data, due on Friday. Silver spot was down 0.2% to $38.74 an ounce after a Friday peak of nearly one month. "I believe $40 and beyond is definitely in play." Grant stated that the fundamentals of silver are very good and the market is still in a deficit. Palladium fell 2.1% to $1102.79 and platinum dropped 1.1% to $1346.90. (Reporting by Sarah Qureshi in Bengaluru; editing by Barbara Lewis)
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Hassett, White House's Hassett, says US could buy stakes in other chips companies
Kevin Hassett, White House economist and CNBC interviewee on Monday, said that the federal government could invest in other U.S. companies involved in semiconductors or even other industries. Hassett asked if this deal with Intel was part of a bigger effort by the U.S. Government to acquire equity stakes in industries it supports. He also said that there may be other transactions similar. The National Economic Council Director told CNBC, "I believe this is a special circumstance due to the huge amount of CHIPS Act expenditures that Intel was receiving." "But, the president made it very clear from the beginning of the campaign that it would be wonderful if, at the end, the U.S. was able to start building up a sovereign fund. Hassett added: "I'm certain that there will be more transactions at some point, if they are not in the industry but in other sectors." Intel's investment is the latest in a series of unusual deals with U.S. firms that have alarmed critics who claim Trump's actions are creating new categories of risk for corporations. Under Trump, the U.S. has allowed AI chip maker Nvidia's H20 chips to be sold to China. It also allowed the Pentagon become the largest shareholder of mining company MP Materials, and it acquired a "golden stake" with certain rights of veto as part of Japan Nippon Steel's purchase of U.S. Steel. (Reporting and editing by Toby Chopra, Louise Heavens and Susan Heavey)
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India warns Pakistan about potential flooding as both countries battle torrential rainfall
Pakistani officials and New Delhi source said that India had shared with Pakistan a warning about possible cross-border floods, amid deadly flooding and monsoon rains. Information sharing has been a shock to New Delhi because it put an old treaty between Islamabad and New Delhi on the table. Water access In April, the case was placed in "abeyance" after a fatal accident had been linked to it attack On Hindu tourists in Indian Kashmir, Pakistan. Islamabad denies any involvement. Tensions ? In May, the two nuclear-armed rivals engaged in the most violent military conflict in decades. The Indian source stated that the Indian high commission in Islamabad issued the warning to Pakistan's Foreign Ministry on Sunday on "humanitarian" grounds and not in accordance with the 1960 Indus water treaty. This was in response to heavy rains in Jammu and Kashmir, which borders Pakistan. Citing government regulations, the source declined to provide a name. The Indian foreign ministry has not responded to a comment request. The Pakistani foreign ministry stated that the warning was sent through diplomatic channels, "rather than the Indus water commission as required by the Indus waters treaty". The floods of this month are a major concern India's northern region of Jammu & Kashmir At least 60 people have been killed and more than 400 others injured in the northwest Pakistan. The National Disaster Management Authority of Pakistan said that 799 people have died in floods in Pakistan since monsoon began in late June. It warned that more heavy rains are expected until September 10. Mazhar Hussain is a disaster management officer in the Pakistani Province of Punjab. He said that the Indian government had shared information about a potential surge in the Tawi River, which turns into the Sutlej after crossing the border. Hussain stated that the report did not indicate the level of flooding but warned about the high floods in the river. The dams in India have been filled by heavy rains from Pakistan, and this will force India to release more water. The heavy rains in Pakistan combined with the water released by India will cause floods along Sutlej Ravi and Chenab rivers in Punjab. WATER SUPPLY According to the 1960 treaty three rivers flowing westward from India were given to Pakistan, and three east-flowing rivers to India. Pakistan is worried that India will choke off its main water source, which could put at risk its hydro-power and agriculture. In a statement issued on Monday, the Pakistani foreign ministry urged India to adhere to all of the Indus Treaty's provisions. "India's unilateral decision to put the Treaty on hold could have serious negative consequences for peace, stability and security in South Asia." Reporting by Krishna N. Das, Islamabad; Mubasher Bukhari, Lahore. Editing by YP. Rajesh & Gareth Jones
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Luxcara, a German company, may cancel the Chinese turbine contract for a North Sea wind farm
Luxcara, a German company, said Monday that it could switch to Siemens Gamesa wind turbines for the 300 megawatt Waterkant Wind Farm. This would mean scrapping an agreement with a Chinese firm which had attracted political scrutiny and criticism by European turbine manufacturers. Luxcara, an asset manager based in Hamburg, has reserved 19 Siemens Gamesa wind turbines. Siemens Gamesa is a subsidiary owned by Siemens Energy of Germany. The same type was already purchased for the 1.5-gigawatt Waterekke Project, the largest offshore wind project ever undertaken in the German North Sea. The turbines would be replacing the ones that Ming Yang Smart Energy, a Chinese company, was to manufacture for the project as part of a deal announced in the past year. Luxcara announced that it would consider the change in order to achieve economic efficiency through bundling of procurement processes and contracts. It will also conduct joint installation campaigns, and coordinate operations for both projects. Holger Matthiesen said that this would enable the two project companies to coordinate their development, construction and operations even closer. Waterkant is expected to generate power for 400,000 homes by 2028. It will be connected to the grid in the German North Sea. The former German economy minister was very critical of the deal, as were the wind turbine manufacturers in Europe. They said that it would allow China to access vital infrastructure. Ming Yang was a result of a review by the European Commission, last year, into possible market distortions caused by Chinese wind-turbine makers in five European Union member countries. China branded this move "discriminatory". Luxcara stated that it informed relevant authorities and partners of the project about the potential switch in turbine suppliers. It did not specify whether political and regulatory scrutiny had played a part in the decision. Siemens Gamesa and Ming Yang Smart Energy, as well as the German Economy Ministry, did not respond immediately to comments. Reporting by Riham alkousaa, Editing by Helen Popper
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The Fed's pivotal fervor has cooled the global stock market
The excitement over a possible U.S. rate cut in September waned on Monday. U.S. stock futures fell during pre-market trade as investors focused on the larger economic picture. As of 1258 BST, the S&P 500 was down 0.2% and Nasdaq Futures were down 0.3%. This indicates a lower Wall Street opening. Powell's change in stance has caused futures markets to price an 84% probability of a quarter point rate cut in September and at least 100 base points of easing up to 3.25-3.5% in the middle of next. The broadest MSCI index of world stocks rose by 0.1%, and remained near the record highs set on Friday. In Asia, blue chips in China closed at their highest levels since 2022 with a gain of over 2%. Japan's Nikkei also closed 0.4% higher. The pan-European STOXX 600 Index was also down 0.2%, due to the decline in renewable stocks. This is after the U.S. Government ordered Denmark's Orsted halting construction of an offshore project near Rhode Island. Orsted's shares dropped by a record 17 percent after the move. It was a blow to the industry, and it put Orsted's capital raising plans at risk. London's markets were closed due to a holiday. This lowered the overall trading volume in Europe. The shares of Amsterdam-listed JDE Peet’s rose roughly 17% following Keurig Dr Pepper's agreement to purchase the company for $18,36 billion, a 20% premium over Friday's closing prices. Sources told the weekend that they expect the European Central Bank to keep rates unchanged in September. If the economy continues to weaken, discussions about future cuts could resume in the fall. Florian Ielpo is the head of multi-assets at Lombard Odier Investment Managers. He said: "As an investment manager, you are losing an enemy when the Federal Reserve pivots, because it allows valuations to become more expensive." Ielpo, a Lombard Odier analyst, said that, after analyzing inventory data from manufacturers, wholesalers, and retailers, he found that, while manufacturers had stockpiled in response to tariff announcements made by the government, retailers were holding little inventory at lower levels of the economic food-chain. Ielpo said that companies returning to replenish their stock will soon discover the true cost of U.S. Tariffs. This will be reflected in their third-quarter earnings. Two people with knowledge of the matter say that Switzerland hopes to finalise soon a new offer to Washington in order to reduce its tariff burden. This will include increased defence spending as well as greater access to U.S. interests for energy. The Swiss were shocked when U.S. president Donald Trump hit them with 39% tariffs this month, which are among the highest in the world. The Swiss Franc climbed 0.1% in relation to a basket. The dollar rose around 0.3% on the broader currency market to 147.31yen, after falling by 1% Friday. The euro fell 0.2% to $1.1705 after recovering from its Friday low of $1.1583. The dollar rose, boosting the outlook for corporate profits, but also suggesting that policymakers are more concerned about a possible downturn in the economy and employment. The yields on euro zone bonds rose after falling late Friday, as traders reassessed the Fed's move and its impact in Europe. Due to the bank holiday, U.S. Treasury cash treasuries were not traded in London on Monday. The market's optimism will be put to the test by Friday's reading of personal consumption prices in the United States. It is expected that core inflation will reach its highest level since late 2023, at 2.9%. Any surprise in inflation could also threaten the rally of longer-dated Treasuries. This is especially true given that $183 billion worth of new debt will be sold this week. John Williams, the influential head of New York Fed is scheduled to speak on Monday. Markets will be eager to know if he shares Powell’s policy outlook. NVIDIA WATCH Nvidia is expected to report its results on Wednesday. It is predicted to announce an increase of 48% in earnings per share based on a revenue of $45,9 billion. Analysts are eager to learn more about the prospects for shipments into China, and the details of President Donald Trump's agreement to pay 15% of sales revenue to the U.S. Government from advanced chips sold in China. Trump announced on Friday that the U.S. will also purchase a 9,9% stake in Intel, for $8.9 Billion, or $20.47 a share. This represents a discount by about $4 compared to Intel's close share price of $25.80. Gold was slightly lower last week at $3,368 per ounce, after a 1% jump late last year. The lack of progress in the talks between Russia, Ukraine and Ukraine has also supported oil prices. Brent crude oil rose by 43 cents, to $68.16 per barrel. U.S. crude gained 25 cents, to $64.13 a barrel.
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Sources: Sinochem will sell two refineries in bankruptcy to local operators
Seven trade sources and auction documents indicate that China's state owned Sinochem Group is selling two more bankrupt refineries to local refiners in eastern Shandong Province for a much lower price than their value, via auctions which closed on Friday. The new owners would increase crude imports and restart operations at the troubled facilities, boosting oil purchases in the world’s biggest importer. The refineries, Zhenghe Group, which operates a 100,000-barrels-per-day refinery, and Huaxing Petrochemical, which has a 140,000-bpd plant, were listed for sale on last Monday, according to the Shandong Property Right Exchange Centre. Sources with knowledge in the matter have said that Shandong Qicheng Petrochemical should acquire Zhenghe, while Shandong Qirun Petrochemical would take over Huaxing. All three are located in Dongying. Sinochem, when contacted by a reporter from, said that the company would not comment on speculation in the market. Qicheng Qirun have not responded to any requests for comment. Sinochem will be leaving Shandong where most Chinese independent refiners are located, commonly known as teapots. These refiners account for about a fifth China's crude oil imports. Sinochem acquired the refineries in Shandong via a state-organised merger with ChemChina. Local courts declared the plants bankrupt last year due to debts and unpaid taxes. Documents on the website of the Shandong Property Right Exchange Centre showed that Zhenghe's minimum transfer price was 2.62 billion Yuan ($365.12 millions), while its valuation was 6.3 billion Yuan. Documents show that Huaxing's minimum transfer price was 3.24 billion Yuan compared to its valuation of 8.7 billion Yuan. The website didn't reveal the names of bidders, and it wasn't immediately clear if these deals would be completed at those prices. The Shandong Property Right Exchange Centre refused to comment. Sinochem sold Changyi Petrochemical in March to Shandong Hongrun Petrochemical. The acquisition will allow Qicheng's and Qirun’s refinery capacities in Dongying to increase from 170,000 bpd to 184,000 bpd respectively, thereby improving their economies-of-scale. Three sources said that the two Shandong refiners will also receive a government quota for crude oil imports of approximately 3.56 million tons (26 millions barrels) in the remainder of 2025 after purchasing Sinochem's factories. A fax sent to the Ministry of Commerce for comment was not returned. Changyi has recently resumed its operations, and purchased crude oil from Brazil and Canada with the 2025 import quota. Reporting by Chen Aizhu in Singapore, Siyi LIu in Beijing Newsroom and Trixie Yap. Editing by Florence Tan and Helen Popper.
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Indonesia removes the requirement for benchmark prices to be used in mineral and coal sales
A mining ministry order reviewed on Monday revealed that Indonesia has removed the requirement for minerals and coal sales to be priced at government benchmark prices. The decree, which was issued earlier this month by the government, allowed miners the option to sell coal and minerals below benchmark prices set by the government, but the production levies, and taxes resulting from these transactions, would be based upon the benchmark prices. Jakarta mandated the use of benchmark prices for coal transactions as of March 1. The intention was to have a greater control over the value domestic and international transactions of the fuel commodity. The price was already used to calculate royalty payments before that. Both buyers and sellers preferred the Indonesian Coal Index for pricing shipments, because it is opaque, less often updated, and more expensive. Indonesia also publishes benchmark prices for nickel, copper, tin and cobalt, among other things. Indonesia exported 238 millions tons of thermal coal during the first half of 2014, an increase of 20% from a previous year. (Reporting and editing by Jan Harvey; Bernadette Christopher)
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Dollar strength causes gold to fall from two-week peak.
Gold prices fell on Monday, as the dollar strengthened. This was a retreat from the two-week high reached in the previous session following comments by U.S. Federal Reserve chair Jerome Powell that boosted bets for interest rate reductions. As of 0914 GMT spot gold was down 0.3% to $3,362.56 an ounce after reaching its highest level since August 11, on Friday. U.S. Gold Futures for December Delivery eased 0.3% at $3,407.30. Gold became more expensive to other currency holders due to the 0.2% increase in the dollar index. Powell said on Friday that the Fed may cut rates at its meeting next month. He noted that the risks for the job market are increasing, but that inflation remains a concern. A decision is not yet set in stone. UBS analyst Giovanni Staunovo said: "Powell indicated to me that he only expected a 25-bps reduction for September. So there is an adjustment based on this, which supports the dollar and weighs on gold." The markets now price in a 87% chance that the rate will be cut by a quarter point at the September meeting, compared to Nearly 90% CME FedWatch Tool predicts a 48-basis-point reduction in the aggregate by year's end, following Powell's Friday comments. "Another large cut depends on the incoming U.S. economic data. It must indicate a slowdown of economic activity which we anticipate. Staunovo said that gold is expected to reach USD 3,700/oz by mid-2026. Investors await the U.S. data on personal consumption prices due out Friday, which is expected to show core price inflation. Creeping up The rate of inflation has reached its highest level since late 2023, at 2.9%. In an environment of low interest rates, gold tends to increase in value. This reduces the cost of holding bullion that does not yield. Silver spot fell 0.2% at $38.75 an ounce. Platinum dropped 0.9% to $1349.35, and palladium declined 0.7% to $1118.26. (Reporting by Ishaan Arora in Bengaluru; Editing by Mark Heinrich)
The 'Why' behind rallies and rate cuts
Wayne Cole gives us a look at what the future holds for European and global markets.
Asian markets have managed to cheer Jerome Powell’s apparent dovishness last week. The Nikkei is up, and Chinese stocks are continuing their recent rally.
The blue-chip index in China has risen almost 10% this month, reaching new heights not seen since mid-2022. This is despite the fact that domestic demand remains weak and companies lack any pricing power.
The power of momentum is indisputable. Why do shares go up? People are buying shares. Why do they buy? They're going up.
After Friday's euphoria the mood of European and U.S. stocks has changed. This may be due to the realization that the U.S. economic situation must worsen for the Fed, even though inflation is heading towards 3% or higher.
It's important to understand the "why". The "why" is important. It's not enough to relax policy because inflation has cooled. You also need to do so to help the economy and prevent an increase in unemployment. Powell said that the tariffs would likely have a temporary impact on prices. However, this could sound like the label "transitory", which was given to the initial price spike post-COVID.
A reading of 3.0% would be a sticker shock to the long end Treasury curve. This week the Street will also have to deal with $183 billion of new supply, a huge amount for a market as large as this one.
Nvidia, a company with a $4 trillion market capitalization that is close to the value of the Nikkei index, will report on Wednesday.
The bar is set high, as the expectations are a 48% increase in earnings per share based on revenues of nearly $46 billion. Options may imply a chance for a 6% change in share price depending on results.
Last week, it was noticeable that the tech sector stumbled as people began to question whether or not hundreds of billions in AI investments will ever yield a return. Or is this just another dotcom bubble?
The proposed deal between President Trump and Nvidia, in which Nvidia pays 15% of its profits on certain chips sold to China as a reward for export licenses, will certainly be watched closely. Analysts are unsure of the constitutionality and few details are available. But that's State Capitalism in America for you.
Market developments on Monday that may have a significant impact
Ifo Business Survey for August. U.S. July New Home Sales, Chicago and Dallas Fed Manufacturing Surveys
Federal Reserve Bank of New York president John Williams and Fed Bank of Dallas president Lorie Logan both speak
(source: Reuters)