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Gold prices rise amid fears of Middle East conflict
Gold as a safe-haven asset gained on Monday due to escalating fears of a prolonged conflict in the Middle East following?U.S. Israeli and U.S. strikes against Iran have boosted the price of safe-haven gold. Gold spot gained 2%, to $5,384.41 per ounce, by 1406 GMT, after reaching a session-high of $5,418.50. Prices reached a record high of $5,594.82 in January. U.S. Gold Futures increased 2.9% to $5.397.40 per ounce. David Meger is the director of metals trading for High Ridge Futures. "I believe that it is the uncertainty that will more than likely'support prices. The U.S. and Israeli air war against Iran has continued to expand with no end in site. Israel responded to Hezbollah's?attacks, while Tehran fired missiles, drones, and rockets at Israel, Gulf states, and a British airbase in far-away Cyprus. SP Angel analysts noted that the increasing geopolitical fragmentation prompted BRIC Central Banks to reduce their exposure in dollar-denominated asset to gold. They added that they expect that this trend will continue. Gold, which has long been regarded as the safest asset during times of uncertainty, is up nearly?25% this year. The rally is a continuation of its 64% rise in 2025. This was fueled by central bank purchases, inflows to exchange-traded funds and a shift towards looser U.S. financial policy. BNP Paribas, meanwhile, said that it sees the physical gold investment demand as being a major driver for this year. The bank said that physical gold ETFs had already amassed about 2 million ounces of gold this year, and they expect Chinese investors to buy more than in 2025. This week, the market is going to be watching for the ADP Employment Report, the weekly claims of joblessness and the non-farm pay reports. Silver spot?eased by 0.6% to $93.23 per ounce, after reaching its highest level since January 30. Spot palladium fell by 1.1%, to $1,767.00, while spot platinum dropped 1.7%, to $2,324.40. Ashitha Shivprasad reports from Bengaluru. Additional reporting is by Noel John, Kavya Baliaraman and Kavya Balaraman. Editing is by David Goode.
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Asia's margin on naphtha reaches four-year high due to supply concerns
Profit margins for Asia's naphtha refinery As the Middle East conflict entered its third day, global?traders and shippers were spooked. Feedstock prices have risen and Asian buyers will have few options for alternative supplies if the disruption continues, according to a Singapore-based official of a major European trader. This is after U.S. The official said that "they (petrochemical manufacturers) will soon have to reduce their operating rates." Estimates from traders indicate that nearly 4 million tons of Asia bound naphtha traverse the Strait of Hormuz every month. A?third of this lands?in South Korea. The Asian naphtha refinery margin LSEG data show that Brent crude prices rose to $134.30 a metric tonne on Monday. This was the highest price since April 2022. Benchmark naphtha price On Monday, the price of a metric tonne jumped to $733 from $645.50 during the previous session. Haldia Petrochemicals in India, the largest?naphtha purchaser for the country, said on Monday that it would increase sourcing domestically if the war continued. The company sources its 700,000 tons of ethylene cracker's light naphtha primarily from the Middle East. It supplements this with supplies from local refiners when specifications match. In the last two months, Russia has increased its naphtha flows to port storage hubs and ship-to-ship transfer (STS) hubs as key buyers have scaled back their imports due to Western sanctions. Reporting by Mohi Nairayan, Editing by Kirby Donovan
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Gold prices rise by more than 2% after strikes against Iran prompt a rush for safe havens
Gold prices rose by more than 2% on Monday as U.S. and Israel strikes against Iran continued - with no end in sight. This stoked fears of a wider geopolitical & economic uncertainty, which sparked a flight into safe havens. Gold spot prices rose 2.1% at 1255 GMT to $5,388.59 per ounce, after reaching a four-week high in the previous session. The metal reached a high of $5,594.82 in January. U.S. Gold Futures increased 3%, to $5404.20 an ounce. Ricardo Evangelista, ActivTrades analyst, said: "We're seeing an increase in'safe-haven assets. This is reflected both in the gains of gold as well as the losses in risk-related assets such stocks." The global shares fell on Monday as the conflict in the Middle East appeared to be a long-term affair, which could disrupt the global economic recovery. It also could reignite inflation fears. Iran retaliated against U.S. and Israeli attacks by destroying air traffic in the Gulf and stopping oil and product tankers from passing through the Strait of Hormuz. Israel increased its attack on Hezbollah militants backed by Iran in Lebanon on Monday. This year, gold has risen in value due to the increased global economic uncertainty and political turmoil. Gold's latest rally is a continuation of its 64% increase last year. This was driven by central bank purchases, inflows to exchange-traded fund and expectations that the U.S. will ease monetary policy. Carsten Menke, a Julius Baer analyst, said: "The situation is still highly uncertain. The escalation fuels the bullish sentiment in gold and silver markets. This provides support for prices and stability to a portfolio in a period of increased volatility on financial markets." BNP Paribas raised its gold price forecast for 2026 by 27%, to $5,620 an ounce. It also said that prices would peak at $6,250 per ounce before the end of the year due to persistent geopolitical and macro-economic uncertainty. Investors are focusing on the U.S. labour statistics due to be released this week. These include the ADP Employment Report, the weekly jobless claims and the non-farm?payrolls report. Silver spot was also up 1.4%, at $95.10 per ounce. It had reached its highest level in a whole month earlier in the day. Spot platinum dropped 0.3% to $2.358.33 an ounce while palladium rose 0.6% to $1.797.47. (Reporting from Bengaluru by Noel John; Additional reporting by Ashitha Shivprasad, Kavya Baliaraman and Sumana Niandy; Editing and Diti Pjara.)
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McGeever: The war in Iran traps Treasuries' investors in an oil stagflationary dilemma.
U.S. Treasuries have just had their best month since last year. Investors must now decide whether the sudden outbreak of war in 'the Middle East' will boost bond demand or if a surge in oil prices, which is accompanied by inflationary pressures, will cause it to crash. The U.S. and Israeli attack on Iran, which killed the Supreme Leader Ayatollah Khamenei,?marked a dramatic escalation of regional tensions. The simmering conflict has already helped to push Brent crude oil above $70 per barrel in recent weeks, and also sparked investor interest in Treasuries, pushing the 10-year yield down below 4%. These two moves both accelerated dramatically in the early trading of Monday. Brent oil soared by as much as 14 percent, and Brent broke through the $80/bbl mark, amid fears of disruptions in supply from one of the world's largest producing regions. The 10-year Treasury yield fell to 3.90% - its lowest level since last April. The buying frenzy cooled down, particularly at the short end, where the yield on the 2-year Treasury note flipped and traded 6 basis points higher. Bond investors face a dilemma: should they buy Treasuries as a hedge against a possible slump in risky assets due to a spike in geopolitical risks, or sell them in anticipation of inflation and a possible Federal Reserve response from the soaring price of oil? Which half of "stagflation's" dynamic will win out? FLIGHT TO SAFETY Investors' first instinct was to "run for cover". The allure of Treasuries, and other high-rated government bonds, seemed overwhelming as stocks fell around the globe. On Monday, the majority of Asian and European benchmark equity indexes dropped between 1% to 2%. European yields also initially declined. It's understandable given the potential impact of high oil prices on the economy. Jordan Rochester, a Mizuho analyst, estimates that an increase of $10/barrel will knock off 10-20 basis point growth in the next year. Oil has already risen by $20/bbl over the past six weeks and could soon reach $100/bbl. The global economy would be severely affected if crude rose above this threshold and stayed there. The "bull" case is strong for Treasuries, especially when you consider the looming threat of artificial intelligence on white-collar employment in the next few years. OIL NOW +13 % YEAR-ON-YEAR The "risk-off" trade that immediately followed the U.S. - Israel strikes sparked a flood of demand for Treasuries. However, a persistent rise in oil prices ultimately pushes all other prices higher. Analysts at Rabobank note that a significant increase in oil prices is inflationary. "Just as it was during the Russian invasion of Ukraine," they say. According to economists, a $10 increase in oil can boost the annual inflation rate by up 0.2 percentage points. This might not seem like much. The Fed's preferred annual inflation measure is already at 3%, and it's creeping up. So every increase counts. Mizuho’s Rochester said oil at $100-$130/bbl for any period of time would take Fed rate reductions?completely out of the picture, and probably trigger a mild cycle rate-hiking "at the least". The broad-based price pressures are already pushing prices higher in the U.S. The data on producer price inflation for January, released last Friday, was hotter than anticipated. And the deflationary pressure from oil is now turning into an inflationary one. Brent crude's price increased last week. It will be the very first time since 2024 that oil will have a positive base effect on inflation calculations. Brent crude was nearly 30% cheaper in early January than it had been a year before. It is now 13% higher than it was a year ago. This is a major shift in the inflation models that will cause Fed officials to be on alert. If the $100/bbl oil price is sustained, it could result in a CPI increase of 0.8-1.5% if the increased gasoline prices are fully reflected. It is possible that this figure could be significantly underestimated, if rising oil prices also increased housing, transportation, food, and other costs. Treasuries have fallen from the highs they reached on Monday morning. The conflict in the Middle East, which appears to be spreading, is highly fluid. As a result sentiment can change in an instant. The jobs of Treasuries' investors just got harder. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Russell: The key to a boost in crude oil production from OPEC+ is the duration of the disruption caused by Hormuz.
The OPEC+'s decision to increase crude oil production by 206,000 barrels a day (bpd), starting in April, is the least significant decision that the group has taken during its nearly decade-long existence. Addition of 0.2% to global oil demand in a month is a mere symbolic gesture, given the escalating conflict in 'the Middle East' that is already causing serious disruptions in supply. The eight OPEC+ members who are voluntarily reducing their production could not have done much at the meeting held on Sunday to assure market participants of supply security. Analysts had predicted that the increase in barrels would be 137,000, but the actual number was 206,000. If there's any significance to this meeting, it is the symbolic message of the group stating they could add more barrels if necessary. The OPEC+ decision to increase output was not enough to keep crude prices from spiking at the Monday open. Brent futures rose as much as 13.6 percent to a 12-month-high of $82.37 a barrel, before easing back to $79.10 by early Asian trade. How will the top importers respond to the disruption of crude oil supplies from the Middle East? The fog of war is always a source of uncertainty. This is also true for the recent bombings and missile attacks by Israel and the United States on Iran and their retaliatory strikes against neighbouring Gulf nations. The decision by Iran to attack civilian targets in the United Arab Emirates may prove to be a strategic mistake or a brilliant move. Much depends on how long Tehran will continue the attacks, and?how long the UAE is able to successfully defend a civilian and expatriate population that's likely to become increasingly concerned. For crude oil markets it is worth looking at what's known and the most likely reactions to the current situation. Ship owners and insurers do not want to take a risk with their vessels during a major conflict. It's good to know that Iran doesn't appear to have actively blocked the narrow waterway which carries nearly 20% of the global crude and products supply. When the shooting ceases, tankers can move quickly through the Strait and ease any supply bottleneck. CHINA AND INDIA Other factors will also likely alleviate some of the concerns about supply. First, China, which is the world's largest crude importer, will likely reduce arrivals over the next few months. LSEG Oil Research estimates that China's imports were strong in the last few months. January's arrivals are estimated to be 11.61 million bpd. February's arrivals are estimated at 13.42 millions bpd. This would surpass the previous record of 13,18 million bpd set in December. By the time the cargoes that are being arranged now arrive in May and/or June, it is likely that China's prices will have risen by up to 2,000,000 bpd. India, Asia's largest crude importer will return to purchasing Russian crude, despite having agreed with U.S. president Donald Trump to drastically cut Russian imports. India's top priority in any Trump deal will be to ensure that it has a secure supply, particularly since Trump's choice of war with Iran is likely to cause India supply problems. Importing countries may release their strategic reserves, while exporting nations will try to maximize production and shipments. The Strait of Hormuz is also a major route for liquefied gas (LNG), which accounts for about 20% of global LNG shipments. Importing countries can also adjust their demand in the event of a spike in prices due to disruptions to supply. China, for example, is likely to reduce its spot cargoes and possibly even resell long-term shipments. Even Europe, which is a continent with price-sensitive buyers such as India, can reduce imports to slow down the replenishment of stocks depleted by the winter peak demand. How long will the shooting war continue? This is the key question for crude and LNG markets. Both sides are likely to run out of essential munitions, but can probably sustain some type of conflict over an extended period. Trump and other leaders may be more likely to face increasing pressure from the public if oil prices continue to rise and remain high. 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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BlackRock's GIP & EQT to purchase AES Corp for $33.4 billion
A consortium led by BlackRock's Global Infrastructure Partners, and equity firm EQT AB agreed to a deal on Monday that would see the U.S. based power company AES Corp acquired for $33.4 billion including debt. This deal shows how utilities are prime targets for takeovers as artificial intelligence reshapes the electricity market. AES shares were down by?more that 17% during premarket trading. AES stated that it would have improved access to capital in order to invest in "critical energy infrastructure" assets and provide "reliable energy solution" to its customers. AES Indiana, AES Ohio and AES West Virginia will continue to be locally managed and operated regulated utilities with "continued commitment and investment" in the community. The consortium will buy AES at $15.00 per share, which represents a total equity valuation of $10.7 billion. The price of the shares represents a discount of 13% to AES last close, but still represents a premium of 35.5% to the closing price for the stock on July 8 before the first media report about a possible acquisition. GIP is expanding its?utility footprint. This includes a $6.2 billion take-private deal with CPP Investments for Allete in 2024. It also bought a natural-gas plant in Pennsylvania for $1 billion and acquired a 774 megawatt Potomac Energy Center in Virginia. The transaction is expected to close in late 2026 or early 2020. (Reporting and editing by Pooja Deai, Sriraj Kluvila, Maju Samuel, Pooja Saha in Bengaluru, Katha Menon, Pooja S., in Bengaluru)
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Hudbay Minerals buys remaining Arizona Sonoran stake from Arizona Sonoran for $1.48 Billion
Hudbay Minerals announced on Monday that it would 'buy the shares in Arizona Sonoran Copper Company it doesn't already own for $1.48 Billion. The?Canadian mining company is expanding?its footprint?to?capitalize?on?the increasing demand for?the red metal. Hudbay Minerals shares listed in the U.S. fell by 1% before market. Copper, an important metal used in the construction and power industries, will benefit from a surge in demand due to electric vehicles and AI infrastructure. As countries around the world increase their efforts to reduce reliance on China, miners are consolidating. Anglo American announced a merger with?Teck Resources worth $53 billion in stock last year to become the fifth largest copper producer in the world. Hudbay holds nearly 10% of ASCU. ASCU shareholders will receive 0.242 Hudbay shares for every ASCU share, which is C$9.35. The price of the shares offered is a 29.5% premium to ASCU's Friday closing price. Hudbay would own 100% of the Cactus Project, which will be a major copper cathode producer once it is online. The acquisition will also'strengthen Hudbay by boosting long-term production profile, expanding its U.S. growth pipeline and increasing exposure for rising demand for critical minerals produced domestically. Hudbay shareholders are expected to own 89% of combined company by the end of the second quarter in 2026. Hudbay anticipates producing?about 92,000 tonne a -year? from its Copper World Project?by 2030, and approximately 103,000 tonne a-year? from Cactus after that. (1 Canadian dollar = $1) (Reporting and editing by Krishna Chandra Eluri, Leroy Leo, and Dharna Baffna)
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Haldia in India has plenty of naphtha and plans to increase local purchases amid the US-Iran conflict.
India's Haldia Petrochemicals, whose chief executive spoke on Monday, has a?sufficient supply of naphtha at its plant and a?supply already at sea. It does not expect that the U.S./Iran conflict will disrupt immediate production. Navanit Narayan, CEO of Navanit Narayan said that if the conflict continues they would increase sourcing in the domestic market. Marine insurers have canceled war risk coverage for vessels and oil shipping prices are expected to rise further following the conflict that has left three tankers damaged and a seafarer dead, as well as 150 ships stranded in the Strait of Hormuz. Haldia Petrochemicals purchases naphtha primarily from Middle East refiners and partially from local refiners for its 700 000 ton per year ethylene cracker. The manufacturing facility is located in India's Haldia, in the eastern state of West Bengal. It has a chemical processing capacity that is 491,000 tons and a polymer processing capacity of approximately?1,000,000 tons per annum. Haldia Petrochemicals is majority-owned by U.S. based private equity firm, The Chatterjee Group. It also operates a Singapore based petrochemicals?trading?arm which plans to handle up to 2,000,000 tons of trade volume this year. (Reporting and editing by Kirby Donovan; Mohi Nrayan)
Morning Bid - Middle East Maelstrom
By Mike Dolan
Mar 2 -
What's important in U.S. and Global Markets Today By Mike Dolan, Editor at Large, Finance and Markets
After the Middle East war broke out, crude oil prices rose as high as 10% over night. The joint U.S. and Israeli strikes on Iran, which took place on Saturday, elicited a'significant response' from Tehran. This has caused a halt to?traffic in the Strait of Hormuz. Prices are still high, but have slightly cooled. In the meantime, the financial markets have their first opportunity to react to an escalating conflict that has seen the death of Iranian Supreme leader Ali Khamenei, and a wave of retaliation in the region.
Below, I will go into more detail. Listen to the Morning Bid Daily Podcast - the special edition, featuring Ron Bousso of ROI Energy Columnist Ron Bousso's discussion on the conflict and its implications for the energy markets.
Middle East Maelstrom Global Brent crude oil prices initially reached $80 per barrel today, their highest level since Jan 2025. However, they have since dropped to $79 or less - still far below the $100 levels that are now regularly touted as a potential destination by many in the market if the conflict continues for several weeks. U.S. president?Trump said the campaign could last up to four weeks, which is long enough for the Strait of Hormuz to be effectively closed. This would put a significant strain on world supply. The modest OPEC+ 'output boost' in April is unlikely to help ease the supply issue, especially because the Gulf navigation will be disrupted.
For the first time since more than a decade, crude oil prices have been significantly higher year-over-year. In addition to another strong January inflation report on Friday, the prospect for rising energy prices further clouded the Federal Reserve's future, as markets did not fully price in another rate reduction until September.
The situation for U.S. Treasury is very complex.
The bond market rallied late last week due to a combination of credit worries, AI-related stock markets and safety bids on the risk of an Iran conflict. The inflation risk associated with the crude price spike has seen the 2-year yields rebound from their three-year lows, reversing the entire Friday's decline. Energy price concerns, and fears about a larger regional conflict, have jolted the currencies of major energy importers Japan and China. Stocks are down, but not too much. U.S. index futures and Asia and Europe benchmarks all fell between 1%-2%.
Chart of the Day
The 9% rise in oil prices on Monday was less dramatic than some had anticipated over the weekend. However, the length of the conflict that has now spread across the region will determine how the energy markets and the wider financial markets react. Shipping data revealed on Sunday that at least 150 tankers had dropped anchor in Gulf water, and three of them were damaged due to the escalating Iranian retaliation against U.S. - Israeli strikes.
Watch today's events
* U.S. S&P Global & ISM - February manufacturing PMIs (9.45-10.30 a.m. Eastern Standard Time)
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(source: Reuters)