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Gold gains following US PPI data and focus on Middle East tensions
The gold price reversed its earlier declines on Wednesday, after U.S. producer prices unexpectedly dropped in June. However, escalating Middle East tensions?limited gains as they kept inflation and interest rate concerns alive. By 1258 GMT, the spot price of?gold? rose 0.3% to $4067.60 an ounce at 858 AM EDT. U.S. gold futures rose 0.2% to $4 075.80. Phillip Streible is the chief market strategist for Blue Line Futures. He said that gold has recovered from its earlier losses as PPI was lower than expected. This eases some concerns regarding multiple interest rate hikes by the Fed this year. According to the Bureau of Labor Statistics of the Labor Department, last month's Producer Price Index fell 0.3% after a downwardly-revised 0.6% rise in May. The PPI was expected to remain unchanged by economists polled, after a 1.1% increase in May. CME FedWatch Tool data shows that traders expect a 9.1% chance of an increase in interest rates at the Federal Reserve meeting on July, as opposed to 16.6% before data. Data on Tuesday also showed that U.S. consumer prices slowed down more than was expected in June. The U.S. announced that it had begun a second wave of attacks against Iran, after reimposing a naval blocade?of Iranian ports. Iran, meanwhile, threatened to cut off even more regional energy exports. Oil continued to rise on Wednesday. Recent developments in the 'Strait of Hormuz' have simply re-ignited fears about unchecked price pressures. If tensions escalate further and oil prices rise, gold could be exposed to downside risks, said Lukman tunuga senior research analyst of?FXTM. A solid break below this level may open the doors to $3,950 or $3,000. If $4,000 is a reliable support level, the price may rise back to $4,100." Fuel costs may continue to drive inflation, prompting central banks to keep rates at high levels for longer. This could also affect gold's appeal as an asset that doesn't yield. Platinum gained 0.4%, bringing the price to 1,638.24. Spot silver fell 0.1%. Palladium dropped 0.1% to $1.303.50. Reporting by Ashitha Shivprasad in Bengaluru and Sukanya Mittra; editing by Shilpa Majumdar
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Russian government prioritizes fuel for vehicles serving food retail chains
Alexander Novak, the Deputy Prime Minister, said on Wednesday that Russia is considering prioritising fuel supplies to vehicles servicing large food retail chains. The government is concerned about fuel shortages, which are a result of the Ukrainian drone attacks against Russia's oil refineries and energy infrastructure. Two industry sources and a? After Ukrainian drone attacks caused a stoppage at large oil refineries, Russian gasoline production fell to an amount?equivalent only to around 65% the seasonal average consumption. "We discussed the importance of prioritizing fuel supplies for vehicles that deliver food products to major retail chains. Novak stated that it is crucial to avoid food spoilage and to avoid additional costs which could be reflected on consumer prices. Fuel cards are usually issued by the authorities for drivers to use when filling up their vehicles. He said that the task force set up by the government to combat the fuel shortage discussed diesel supply to the agricultural industry. The decline in fuel production in Russia will have an impact on the country's economy in the second quarter 2026, according to the central bank of Russia.
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German Government Plans EUR 13.3 Billion Energy Relief Package for 2027
The German Finance Ministry announced on Wednesday that the government will provide energy cost relief packages for businesses and consumers in the amount of EUR13.3 billion ($15.2 billion) by 2027. These funds are to be drawn from KTF (the Climate and Transformation Fund). The package includes a subsidy to electricity grid fees, and relief for energy-intensive industry through an industrial electricity pricing scheme, as well power-price compensatory measures that help offset costs associated with carbon pricing. According to the KTF business plan for 2027, and the financial planning of the government up to 2030, by 2030, EUR13.2 billion will be redirected to the core budget. Since the beginning of the Iran War, energy costs have increased sharply. This has put pressure on Germany's manufacturing and energy-intensive industries. German companies, such as automakers and steelmakers had complained about high energy costs before the war. The amount of relief granted is EUR2.5billion higher than that planned for 2026. More than EUR5.5billion has been allocated to grid charges. EUR5billion to compensations on power prices and approximately EUR2.5billion to industrial electricity rates. CUTS ELSEWHERE INSIDE CLIMATE FUND The government reduces spending in other areas of the climate fund at the same time. Finance Ministry said that funding for KTF programs not committed will be reduced by 30% in general, but some projects will be exempt. The support for electric vehicle transition, for instance, will be cut by 10% or EUR200million through 2029. Existing commitments will not be affected. The federal government approved the?proposed budget for 2027 and financial planning until 2030 last week. This plan did not include any plans for the KTF. The KTF budget will be able to close its deficits by utilizing the EUR2.7 billion that would have been generated from emissions trading revenue in 2027. The ministry announced that EUR22.5 billion of the KTF's planned EUR40.3billion spending?in?2027 has already been allocated?for modernisation project. The economic plan will be approved by the parliament along with the federal budget towards the end of November.
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Buffett: Gates Foundation decision not to accept donations was not a shock
Warren Buffett stated that it was no surprise to him when he informed Bill Gates of his decision to cease donating to the Gates Foundation. This ended their?two decade philanthropic relationship. Buffett, 95, did not include the Gates Foundation as part of a $6 billion donation to Berkshire Hathaway announced on Tuesday. This was in response to revelations regarding interactions between Bill Gates - the Microsoft cofounder and philanthropist - and the late sex offender Jeffrey Epstein. Buffett, the chairman of Berkshire, told CNBC's?on Wednesday that Gates and Buffett spoke three weeks ago, when Gates was in Omaha. The meeting was held after the Department of Justice released in February documents about Gates' relationship with Epstein. Gates also met with the Congress last month. Gates has expressed regret over Epstein and his involvement in the case. Buffett said, "I reevaluated the whole situation." It was not a shock. He said: "I'd read everything." I'd read it all. His children Susie Howard and Peter will continue to donate Berkshire shares, which includes the $6 billion donation, to four family foundations. Epstein, who was arrested on charges of sex-trafficking in August 2019, died in a Manhattan prison?cell. The medical examiner in New York City ruled the death a suicide. Buffett has donated Berkshire Stock worth more than $47.5 billion to the Gates Foundation.
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Rate outlook is clouded by inflation fears and gold falls as tensions in the Middle East fuel inflation concerns
Gold prices fell on Wednesday as escalating tensions continued to?stoke inflation concerns, reinforcing the expectation of higher U.S. rates. Spot gold dropped 0.6% at $4,030.50 an ounce as of 1130 GMT. Tuesday, prices had risen more than 2% after weak U.S. inflation figures. U.S. Gold Futures for August?delivery fell 0.8% to $4.036.20. The Islamic Revolutionary Guard Corps of Iran has threatened to shut all export?corridors that benefit Washington after Tehran closed the Strait of Hormuz, and the U.S. reimposed its?naval blocade of Iranian port. After closing Tuesday at an all-time high, oil prices have risen. UBS analyst Giovanni Staunovo stated that "higher U.S. oil, gasoline, and diesel prices are likely to result in higher inflation numbers for the next print in August. This could keep some Fed officials' tone on the hawkish, which does not help gold." Staunovo said that "in the near term, oil and gasoline prices in the U.S. will continue to affect gold as it is a major driver of U.S. Inflation." Gold is affected by higher interest rates, which increase the cost of owning the asset. Fed Chair Kevin 'Warsh' told lawmakers that the central bank has "no tolerance" for "persistently high inflation," hinting at the CPI data not being all that swell. According to the CME FedWatch Tool, traders have priced in a 61% chance of a September rate hike. Investors are now awaiting the U.S. Producer Price Index due at 1230 GMT?Wednesday to gain insight into inflation levels and the outlook for monetary policy. Silver spot fell 1.1%, to $57.96 an ounce, and platinum dropped 0.84%, to $1,617.97. Palladium fell 1.2% to $1289.45 after rising 5% the previous session. (Reporting by Sukanya Mitra in Bengaluru; Editing by Diti Pujara)
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Copper prices fall on the back of weak Chinese data but losses are capped by concerns about supply
Copper prices fell on Wednesday, despite disappointing economic data from China's top metals consumer. However, supply concerns due to mine disruptions and the Middle East conflict helped to limit losses. The benchmark three-month copper price on the London Metal Exchange fell 0.2%, to $13,610 per metric ton at 0945 GMT. It had reached a three week high in the previous session. Official data revealed that the GDP growth of China, the second largest economy in world, has slowed to a low of 3.5 years, due to weak domestic demand. Ole Hansen is the head of commodity strategy for Saxo Bank, a Copenhagen-based bank. Hansen said that the downside of the market was limited, in part due to persistent supply problems. The Shanghai Futures Exchange's most traded copper contract pared earlier gains and ticked 0.1% higher, to 104 220 yuan (15,392.11) per ton. Rio Tinto reported a 7% drop in copper production for the quarter ending June. The company said that a furnace failure at its U.S. Kennecott Mine will affect production during the second half. Hansen said, "We continue to be reminded of the potential risks on the supply-side and the high prices for energy will just increase the focus on electricification." The oil prices rose by another 2% on Tuesday after the U.S. reinstated a naval embargo on all Iranian ports, and Iran threatened to close other export routes. Hansen stated that "the long-term bullish'story for copper has most definitely not been negatively affected by the events in the last few months." Other metals include?LME Aluminium, which fell by 0.5% to $3.160 per ton. Zinc also dropped by 1%, to $3.561, while lead was down 0.6% at $1.855. Nickel was down 0.2% at $16,740, and tin lost 0.9%, to $53,340.
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Germany launches water monitoring system after Rhine drought strikes industry
On Wednesday, Germany launched a national information system to monitor water levels in the country. The aim is to better manage water supplies as climate change puts more pressure on Europe's biggest economy. Thyssenkrupp is forced to cut production due to a drought on the Rhine, highlighting the importance of the new platform. Carsten Schneider, Minister of the Environment, said that "Water is our most precious resource" when he launched the Low Water Information System (NIWIS). Schneider, citing studies, warned that if Germany does not take action, water scarcity will cost it EUR625 billion ($714billion) by 2050 or EUR25billion annually. ECONOMIC IMPACT Schneider stated that Germany has lost 60 billion cubic meters of water in the last?25 years as a result of climate change. He said that water availability is becoming an important factor in business decision-making. The debate over attracting data centres or tech companies is not just about skilled workers and energy anymore, but also about water availability. The NIWIS platform consolidates data from federal and state sources on river levels, soil moisture and groundwater, replacing a patchwork system of regional systems. RHINE DISRUPTION Low Rhine water levels have caused cargo transport to be disrupted. Thyssenkrupp said that on Wednesday it had'slightly reduced blast furnace production because of restricted raw materials supplies and suspended their own barge operations. Water?levels at Kaub near Koblenz in western Germany, were 42 cm (16 inches) high on Tuesday. They are expected to continue falling. The record low of 25 cm was achieved in October 2018. Munich, Germany’s southern metropolis, has implemented water restrictions until 1 August following heatwaves. Violations can result in fines up to EUR50,000. $1 = 0.8754 Euros (Reporting and editing by Rene Wagner and Kirsti Knolle)
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Rate outlook is clouded by inflation fears and gold falls as tensions in the Middle East fuel inflation concerns
Gold prices fell on Wednesday as escalating tensions continued in the Middle East to fuel inflation concerns, thereby reinforcing expectations for higher U.S. rates. Spot gold dropped 0.7%, to $4.027.49 an ounce at 0843 GMT. Prices rose by over 2% on Tuesday to a high of $4100.19 an ounce, after weak U.S. inflation figures. U.S. gold futures for August delivered?slid by 0.9% to $4.035.00. After Iran closed the Strait of Hormuz, and after the U.S. imposed a naval ban on Iranian ports, the Islamic Revolutionary Guard Corps of Iran threatened to shut all export corridors that would benefit Washington. After closing at an all-time high on Tuesday, oil prices have risen. The UBS analyst Giovanni Staunovo said that higher U.S. crude prices, gasoline and diesel will lead to high inflation figures in the next print of August. This could keep some Fed officials' tone on the hawkish, which does not help gold. In the short term, oil and gasoline prices in the U.S. will continue to have an impact on gold. It remains a major driver of U.S. inflation." Staunovo?added. Gold is affected by higher interest rates, which increase the cost of owning the asset. Fed Chair Kevin Warsh said on Tuesday that the central bank has "no tolerance" for persistently high inflation, hinting at the fact that CPI data is not so good. According to the CME FedWatch Tool, traders are pricing in a 59% probability of a rate increase in September. Investors are now awaiting the U.S. Producer Price Index due today at 1230 GMT for?insights on inflation levels and monetary policy outlook. Silver spot fell 0.5%, to $58.314 an ounce, while platinum rose 0.2%, to $1,634.36. Palladium increased 0.8% to $1315.05 after rising 5% the previous session. (Reporting by Sukanya Mitra in Bengaluru; Editing by Diti Pujara)
Machado, Maduro's opponent, vows to return and wants elections
Maria Corina Machado, Venezuela's principal opposition leader, has promised to return to Venezuela as soon as possible. She praised U.S. president Donald Trump for toppling Nicolas Maduro her rival and declared her movement prepared to win an election free of charge.
"I plan to return to Venezuela as quickly as possible," said Machado. Machado is a 58-year-old lawyer and mother of three who fled Venezuela in October in disguise to accept the Nobel Peace Prize. She dedicated it to Trump.
She told Fox News late Monday that she believed the transition should continue. "We won an election in?2024, by a large margin under fraudulant conditions. We will get over 90% of votes in free and fair elections.
Machado stated that she hadn't spoken to Trump since the Nobel Prize was announced on October 10. He said that the United States must help Venezuela resolve its problems before holding new elections.
We must first fix the country. It's impossible to hold an election. Trump said that there was no way people could vote.
VENEZUELA IS STILL RULED BY SOCIALISTS AND PARTY LIYALISTS
Machado, in her first interview since Maduro's capture by the U.S. last weekend, did not reveal her location, nor any details about her plans to return to Venezuela where she is wanted for arrest, and Socialist Party supporters remain at power.
Trump's lack of support for Machado has disappointed opposition activists as well as the diaspora, which is one fifth of Venezuelans who left the country during the economic collapse under Maduro or his predecessor Hugo Chavez.
Trump, the opposition and some international observers believe that the opposition lost the 2024 elections, in which Machado had been banned from running and an ally was chosen instead. However, Trump says she does not have support in Venezuela.
The?U.S. The?U.S.
Machado stated that Delcy Rodriguez is "one of the principal architects of torture and corruption." Machado said that Delcy Rodriguez is a "main ally, liaison, and agent of Russia, China and Iran. She's not someone who can be trusted by investors from around the world, and she has been rejected by Venezuelans."
GRATITUDE AND THANKS TO TRUMP
Machado has been a 'full-throated' defender of Trump. She said she would personally award him the Nobel prize.
"He has proved to the world what his means. "January 3rd, will be remembered as the day that justice overcame a tyranny", she said about Saturday's raid in Venezuela.
"I want to express today, on behalf of Venezuelans, our gratitude for his courage and the historical actions that he took against this narco terrorist regime. It's an important step in the direction of a democratic transformation."
Machado said that Venezuela, with the world's largest oil reserves and the U.S., as its principal ally, would become the hub of energy in the Americas. It would also restore the rule of law, establish open markets, return exiles to their homelands and offer security for foreign investment.
Sources said that for now, Trump was told by the CIA, that Rodriguez and senior officials?from Maduro’s government are best suited to maintain stability.
The government has ordered the arrests of those who have collaborated in the capture of Maduro. In a sign that the atmosphere is tense in Venezuela, fourteen journalists were briefly detained on Monday while covering events in Caracas.
Video footage verified by shows shots fired into the night skies in Caracas. A Venezuelan official claimed that this was done by police to discourage unauthorised drones.
In a message to reporters, Simon Arrechider, vice minister of communication, said: "There was not a confrontation. The entire country is calm."
MADURO PLEADS NOT GUILTY IN NEW YORK ?COURT
Maduro, who is 63 years old, denied the charges of narcotics on Monday. He claimed to be a "decent person" and that he was still President of Venezuela, while shackled around the ankles in orange and beige prison garb.
Cilia Flores pleaded guilty to being captured with him. The next court date is March 17,
Maduro faces four criminal charges: narcoterrorism, cocaine importation conspiracies, and possession of machine guns and destructive devices.
He has denied these allegations for years, claiming they are a ruse to hide imperialist intentions on Venezuela's oil resources.
Venezuela is the country with the largest oil reserves in the world - 303 billion barrels of heavy crude, mostly in the Orinoco area. The sector has been declining for years due to mismanagement, lack of investment and the?U.S. The sanctions have resulted in a 1.1 million barrels per day average last year. This is a third less than the output of the 1970s.
Maduro's Vice President, Rodriguez, was sworn in to be the interim leader. Officials in Caracas are torn between angered defiance and possible cooperation with Trump who has threatened a military strike again if they do not please him.
Russia, China, and Venezuela's socialist allies have condemned Trump's actions. It is the largest U.S. invasion in Latin America since 1989's invasion of Panama. Legal experts have questioned the validity of this action, and many allies are calling for adherence to international law and dialogue.
Trump said that the U.S. now controls Venezuela and is working with private companies to revive the oil industry. (Reporting and writing by Bureau worldwide, editing by Timothy Heritage).
(source: Reuters)