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Gold prices rise as Treasury yields and oil prices ease
Gold prices increased?1% Wednesday as the oil market was pressured by hopes of a?a?resolution in the Iran conflict. This helped to ease inflation concerns and pushed U.S. Treasury yields down from recent highs. Gold spot rose 1.1%, to $4,531.9 per ounce at 14:10 pm. ET (1810 GMT). Earlier in the session, prices fell to their lowest levels in over seven weeks. U.S. Gold Futures for June Delivery?settled at $4,535.30, up 0.1%. We've noticed a respite from the continuous increase in yields. As a result of this, gold prices have bounced off their recent lows, said David Meger. Director of metals trading, High Ridge Futures. The yield on the benchmark 10-year U.S. Treasury Note ticked down after reaching its highest level since Jan 2025 on February 2. The higher the Treasury yield, the greater is your opportunity cost to hold non-yielding gold. Meger said that "any type of resolution of the 'war' or opening of the Strait of Hormuz could be positive for the Gold Market in that it would lead to a reduction of interest rates, which would then be helpful or opportunistic to the market." Brent crude futures fell after U.S. president Donald Trump said again that the war with Iran will end "very soon." Investors remained cautious about the outcome of the peace talks, as Middle Eastern supply disruption continued. Minutes of the Federal Reserve meeting in April showed that officials had warned that the Iran war might fuel inflation. This boosted support for a rate hike. Gold that does not yield, despite being an inflation hedge is less effective in environments with high interest rates. According to CME’s FedWatch tool, investors are pricing in a 48.6% probability that the Federal Reserve will?raise interest rates in December and an 89.6% likelihood it will maintain current rates at its June meeting. Citi also said that it was'staying cautious in the near term on gold, with a zero to three-month price target of $4300/oz. Silver spot rose by 3.1%, to $75.06 per ounce. Platinum gained 1%.6 at $1,952.30 and palladium increased 1.5% to $1,373.62. (Reporting from Anjana Anil, Bengaluru; additional reporting by Anmol Chaubey; editing by Kirsty Donovan and Shakesh Kuber).
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EU opens the door to a finalised US trade agreement and prevent Trump tariff hike
The European Union reached a provisional agreement with Washington on Wednesday regarding legislation that would remove import duties from U.S. products. This is a crucial part of the trade deal signed in July. It will likely prevent higher U.S. Tariffs on EU Products. According to the agreement reached at?U.S. Under the deal struck at?U.S. After nearly 10 months, the European Parliament, which represents the EU government, and the Council, an EU-wide body, have agreed on a text that will allow EU duty reductions into effect. After five hours of negotiation, they agreed on strengthened provisions that would suspend concessions if Trump violated the agreement?and a sunset provision to terminate the deal by the end of the year 2029 without new legislation renewing it. Andrew Puzder, the US ambassador to the EU, congratulated them on the deal. In a blog post, he wrote: "We are encouraged by this step (while reviewing the details carefully)." This internal EU agreement should calm the tumultuous world's biggest?trading partnership, which involves an annual exchange rate of $2 trillion worth of goods and services. It comes a week following Trump's trip to China, where he made some nice remarks but did not make any major breakthroughs. The EU relies on the U.S. for about 20% of its exports. But Trump wants to cut the $200 billion goods trade deficit. Zeljana Zovko is the European People's Party's lead negotiator on the U.S. trade deal. She said, "I'm proud to announce that Europe avoided a damaging increase in?transatlantic tensions, and has protected European businesses, investments, and millions of jobs both on sides of the Atlantic." "The EU is a leader in defending our interests, and it walks the walk." Once approved, this will boost transatlantic cooperation and stability," European Trade Commissar Maros Sefcovic said on X. The American Chamber of Commerce within the EU expressed relief at the signing of the agreement. It said that it was an important step for companies who rely on stable trading and investment relationships across the Atlantic. SpiritsEurope also praised the agreement, stating that it would increase stability and predictability. German Economy Minister Katherina reiche said that it would provide planning certainty for business. TRUMP SET JULY 4 DEADLINE Trump said that he would increase tariffs on EU cars to 25%, up from 15% currently. He had previously threatened to do so. After Trump's threats of imposing?new tariffs? on European allies if they did not support his acquisition of Greenland, and after the U.S. Supreme Court ruled against his global tariffs, EU lawmakers had paused twice the necessary legislation. The EU should meet Trump's deadline of July 4, with the final vote in the European parliament expected to take place?inmid-June. Bernd Lange expressed his confidence that the European Parliament would vote for the deal, saying it provided a "safety-net" to deal with an unpredictable U.S. Administration. EU lawmakers wanted stronger guarantees. However, the two sides refused to accept the proposed "sunrise" clause under which the EU only reduced duties if the U.S. met its part of the agreement. The "sunset" clause was then pushed back from the 'end of March 2028' to the 'end of 2029. The European Commission may also suspend tariff preferences before the end of the year, if the United States maintains tariffs above 15% on "derivatives" such as wind turbines and fridges. EU governments were less keen to insert such items because they feared that it could create uncertainty and anger the Trump administration. Reporting by Philip Blenkinsop in Bengaluru and Mrinmay dey in Mexico City. (Editing by Alex Richardson and Lincoln Feast)
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Sector body: Europe must end China's price control on rare earths to encourage investment
Bernd Schaefer, an industry expert at the EIT, said on Wednesday that Europe needs to develop its own pricing system for "specialty metals" and "rare earths" in order to lessen reliance on China and increase investment in mining and manufacturing. China controls the critical mineral supply chains and sets prices on its own markets. This leaves Western developers with no benchmarks for their investment decisions, which can delay projects already costing more in Europe. The EU has set a goal to mine 10% of its strategic raw material requirements annually by 2030, and rely no more than 65% on one third country. EIT Raw Materials is an agency partially funded by the EU. It has partnered with the digital platform Metalshub to create a European Index to encourage innovation in new mineral mining, refining, and recycling projects within the EU. Schaefer stated that it would take some time to develop an index of?representative' prices. The index will provide transparent and market-based benchmarks for "critical minerals" traded outside China. This will give investors clearer signals about profitability, as well as help to underpin new project financing. "My understanding is that this would require trading a volume of a minimum 10% of the traded volume (non-China)...depending on the raw materials," Schaefer said. Schaefer stated that "What we get from China is not representative nor is it a price in strict microeconomics terms." Schaefer stated that an "index" could include traders from the United States as well as Australia, Canada, and Britain. He said that it was difficult to predict whether or not the EU would achieve its vital mineral diversification goals because of a lack?of transparent?data about volumes and growth expectations. The EU announced in December its RESourceEU 3 billion euro action plan to accelerate?diversification of the EU's supply chain and reduce its over-reliance on China. The EU has taken little concrete action, with the exception of an initial pilot stockpile that was led by Italy France and Germany. Metals such as?tungsten, gallium and?germanium have been selected by the countries to be placed in storage first. Schaefer warned that without transparent pricing and domestic processing, Europe could be left dependent on Chinese benchmarks and see any new raw materials flowing back to China's supply chains. (Reporting and editing by Elaine Hardcastle; Julia Payne)
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Trump: Iran may need to be hit harder by Trump - or not
Donald Trump stated 'on Wednesday' that the United States might 'have to attack Iran even harder? but he will wait and see if there is a deal. He repeated the "either/or", rhetoric he used six weeks ago when announcing the ceasefire. Trump said, "We'll watch what happens" during a commencement speech at the U.S. Coast Guard Academy. "We?hit them terribly. "We may need to?hit them even harder, but perhaps not." "We won't let Iran possess a nuclear weapon." "It's simple," Trump said to the cadets. He said Iran?s military might is largely gone, and the only question now is whether or not the U.S. will go back to finish it off or if Iran will sign a pact. "Everything's gone. "Their navy is gone." Their air force is gone. Everything. Only one question remains: Do we finish it? Will they be?signing? a document? Trump told graduates at the U.S. Coast Guard Academy, "Let's wait and see what happens." Trump warned earlier on Wednesday of further?attacks should Iran not agree to a deal regarding its nuclear program. (Reporting and editing by Nandita BOSE, Katharine JACKSON, Doina CHIACUL; Michelle Nichols, Caitlin WEBBER)
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Bond yields and oil prices fall amid hope for an Iran deal, while stocks rise with Nvidia's results.
U.S. Treasury rates and oil prices fell on Wednesday, as optimism grew that the U.S. was close to a deal with Iran in order to end the Middle East?war. Meanwhile, major stock indexes rose before the closely-watched results of Nvidia. Investors continue to monitor headlines in search of signs that the U.S. is making progress with Iran on ending the war. Donald Trump, the U.S. president, said that negotiations with Iran are in their final stages. He also warned of more attacks if Iran does not agree to a deal. The U.S. Dollar fell from its six-week high. U.S. crude oil fell 4.7%, to $99.22 per barrel. Brent fell to $105.76 a barrel, a 4.95% drop on the day. Shipping data revealed that there were also some signs of a easing of the Gulf pressure on Wednesday as two Chinese oil tanks left the Strait of Hormuz. The yield on the benchmark U.S. 10 year notes was down 8.2 basis point to 4.588% from 4.669% at late Tuesday. Recently, yields reached multi-year-highs on inflation fears fueled by war. Consumer discretionary led the S&P 500 sector gains, while Nasdaq was at the top of Wall Street. Jake Dollarhide of Longbow Asset Management, Tulsa (Oklahoma), CEO, said that there is a renewed sense of optimism because oil prices and yields have fallen. He said that "pessimism is on the horizon" because the Fed has been pushed into a corner by higher oil prices. Fed funds 'futures traders have priced in about 50% odds that the Federal Reserve would raise rates in December. This is a dramatic change from the markets expectations before the Iran War began in late Febuary, when they had been expecting two rate cuts for this year. The Dow Jones Industrial Average rose by 428.50, or 0.87 percent, to 49.793.42, while the S&P 500 gained 65.46, or 0.88 percent, to 7,418.45, and the Nasdaq Composite climbed 326.83, or 1.26 percent, to 26,196.48. The MSCI index of global stocks rose by 9.16 points or 0.84% to 1,100.95. The pan-European STOXX 600 Index rose 1.65%. In Europe and Japan too, longer-dated bonds were also sold off, but like Treasuries they found relief on Wednesday. The benchmark yield for the eurozone, Germany's 10-year bond, has fallen 3 basis points to 3.16% from its 15-year high on Tuesday. The benchmark 10-year U.S. Treasury rate reached its highest level in 16 months on Tuesday. Meanwhile, the 30-year Treasury rate hit its highest level since 2007. NVIDIA RESULTS Ahead Nvidia will report its first-quarter earnings after the U.S. markets close. According to the median estimate of an LSEG analyst survey, expectations remain high. Revenue is expected to increase by nearly 80%, to $79 billion. Nvidia's shares rose 1.9%. Samsung shares fell as much as 4,4% earlier before closing close to flat. After a tentative agreement was reached between the two sides, the Samsung Electronics union announced that it would suspend its strike scheduled to begin on Thursday. This could have prevented a potential disruption of the production AI chips and other products. The other chip stocks were doing better than Nvidia's results. An?index for semiconductors was up about 4%. The dollar index on currency markets fell by 0.21%, to 99.09; the euro rose 0.19%, to $1.1626. The dollar fell 0.18% against the Japanese yen to 158.76.
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Sources say that the ECB's June rate hike is almost sealed, but July is still open.
Four sources said that the case for an ECB rate hike is almost sealed, but they are likely to be noncommittal about any future move. They want to temper bets on a quick step in July. Four sources told that the ECB 'kept rates at their current level in April, but 'debated a rate hike and indicated a move would be likely on June 11, given persistently high fuel costs. Sources said that the inflation outlook has moved towards the bank's negative scenario, and there is no sign of peace in Iran. The bank will need to act at its meeting next week, as the price growth rate is already 3% and well above the target of 2%. They added that even if an agreement on peace was reached prior to the meeting, it would not be guaranteed and energy prices will remain high for a while because the market takes time to normalise. A spokesperson for the ECB declined to comment. Sources claim that no decisions have been taken yet. Sources said that a follow-up increase is not urgent as the price pressures today are much more moderate than they were in 2022 when the last "major inflation shock" hit. Also, second-round effects of the price spike have yet to be seen. A soft labour market and expensive energy will also have a negative impact on the growth of the economy and, in the end, dampen the price pressures at the medium-term horizon. This is the most important time frame for policymakers. This suggests that the bank could skip July, and wait until September for new projections. The financial?markets have now priced three hikes by the ECB in the coming year. The first one will be fully priced by July, and the third by February. Three sources said that the weakening economy was the main reason for any policy tightening. The economy has been surprisingly resilient to recent shocks. However, the current situation is weaker than previous episodes. An energy shock could also dampen growth prospects, particularly if there are shortages of certain fuels like diesel or jet fuel. Two sources have suggested that the ECB’s own projections of a slight dip in the economy may be too?optimistic, and could be subject to a?downward revision. The hope for a meaningful deal could also support the argument for delaying any further hikes, as energy prices may fall if a peace agreement is reached. The sources all agreed that the outlook for the future could change rapidly, as political decisions drive the outlook. Reporting by Balazs Coranyi and Francesco Canepa, Editing by Hugh Lawson
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Sources say that oil refining in central Russia has been halted after drone strikes by Ukraine.
According to official sources and data, almost all major oil refineries located in central Russia have been forced to halt or reduce their fuel production following recent drone attacks by Ukraine. Moscow has already banned gasoline exports from April to the end of July. Refineries which have stopped operations completely or partially, together, produce more than 83 million metric tonnes per year. This is approximately 238,000 tons of oil per day. According to anonymous sources and data, this represents a quarter of Russia's entire refining capacity. Over 30% of Russia's fuel is produced by refineries, and around 25% by diesel. The Russian energy ministry did not respond to a comment request. According to Russian officials, Ukraine has intensified drone attacks against Russia's energy infrastructure. The number of oil refineries that have been targeted by Ukraine since the beginning of the year has doubled. The strikes have also damaged pipelines and storage areas. This has?reduced Russia’s oil production - which is the third largest in the world after the U.S. Kirishi, a refinery in western Russia, the Moscow refinery, as well as facilities in Nizhny Novgorod, on 'the Volga River, Ryazan, and Yaroslavl are all included in a list of 'oil refineries that have been targeted. According to sources, one of Russia's largest refineries, Kirishi with a capacity of 20 millions metric tons annually, has been completely shut down?since 5 May. Another major refinery, Nizhegorodnefteorgsintez (NORSI), with annual ?capacity of 17 million tons, was attacked on May 20. NORSI's ability to continue partial operations is still unknown. (Reporting and editing by Guy Faulconbridge, Bernadettebaum)
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French consortium bids for EU AI Datacentre Fund
The AION consortium, which is made up of some of France's largest?tech companies and infrastructure firms, will apply for EU funding to help build a data center in France that could cost as much as EUR10 billion ($11.60 billion). The European Union executive launched in December a EUR20 billion fund for AI infrastructure to try and close the gap with the United States and China who have invested heavily into high-capacity, data centres. The AION consortium was formed last year in response to EU efforts to be more competitive internationally on AI. It includes tech companies Artefact and Bull, telecoms Orange, Iliad, including its Scaleway?data center arm, private equity firm Ardian and the French utility EDF. Benoit Guillochet, Ardian's director of infrastructure investment, said that the French project could cost half the new EU fund. He said that he would expect funding from private investors including Ardian and bank loans, as well as EU funds. Iliad announced that it is ready to invest EUR4 billion in its datacentres, including through Scaleway. Scaleway's?CEO Damien Lucas stated that the ultimate goal was to have a data center with a gigawatt capacity. This would effectively double France's computing power. The initial phase of the project, he said, would be approximately 100 megawatts. EDF announced last year it would be opening tenders for a number of its 'old industrial sites' with direct grid connections to help data centre operators speed up the process.
Bond yields and oil prices fall amid hope for an Iran deal
U.S. Treasury Yields and Oil Prices fell on Wednesday, as hope increased that the U.S. was close to a deal with Iran in order to end the Middle East war. Major?stock indices also rose before the closely-watched results from Nvidia.
Investors continue to watch headlines in search of signs that the U.S. is making progress with Iran on ending the war. Donald Trump, the U.S. president, said that negotiations with Iran are in their final stages. He also warned of more attacks if Iran does not agree to a deal. Trump said that the United States would wait for a few more days to get the "right response" from Iran. The U.S. Dollar fell from its six-week high while U.S. Crude fell $5.89 and settled at $98.26 per barrel. Brent fell $6.26 and settled at $105.02.
Shipping data revealed that there were also "tentative" signs of an easing of Gulf pressure on Wednesday as two Chinese oil tanks left the Strait of Hormuz.
The yield on the benchmark 10-year notes in the U.S. The yield on 10-year notes dropped 9.4 basis points from 4.669% to 4.576% late Tuesday. Recently, yields reached multi-year-highs on inflation fears fueled by war.
Nasdaq was the leader on Wall?Street while S&P 500 consumer discretionary sector gained the most.
Jake Dollarhide of Longbow Asset Management, Tulsa (Oklahoma), CEO, said that there is a renewed sense of optimism because oil prices and yields have fallen.
He said that "pessimism is on the horizon" because the Fed has been pushed into a corner by higher oil prices.
Fed funds 'futures traders have priced in about 50% odds that the Federal Reserve would raise rates in December. This is a dramatic change from the markets expectations before the Iran War began in late Februrary, when they had been expecting two rate cuts for this year.
The Dow Jones Industrial Average rose by 581.66, or 1.12%, to 49.945.54, while the S&P 500 gained 68.20, or 0.9%, to 7,421.81, and the Nasdaq Composite gained 344.12 or 1.33% to 26,214.83.
The MSCI index of global stocks rose by 9.25 points or 0.85% to 1,101.04.
The STOXX 600 pan-European index increased by 1.46%.
In Europe and Japan too, longer-dated bonds were also on the decline, but like Treasuries they saw some relief Wednesday.
The benchmark yield for the eurozone, Germany's 10-year bond, has fallen 3 basis points to 3.16% from its 15-year high on Tuesday.
The benchmark 10-year U.S. Treasury rate reached its highest level in 16 months on Tuesday, while the 30-year Treasury rate hit its highest level since 2007.
NVIDIA RESULT AHEAD Nvidia will report its first-quarter results after the U.S. market close. According to the median estimate of an LSEG analyst survey, expectations remain 'high.' Revenue is expected to increase by nearly 80%, to $79 billion. Nvidia's shares rose 0.9%. Samsung shares had fallen as high as 4.4% before they closed near flat. Samsung Electronics union announced that it would suspend its strike scheduled to start on Thursday, after the two sides had reached a tentative wage agreement. This could have prevented a potential disruption of the production AI chips and other. The index of semiconductors rose?3.8%, well ahead of?Nvidia's results.
On the currency market, the dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) fell by 0.22%, while the euro rose by 0.22%, reaching $1.163. The dollar fell 0.14% against the Japanese yen to 158.81.
Spot gold increased 1.3%, to $4,539.60 per ounce. Stella Qiu, Caroline Valetkevitch and Alun Johnson in New York; Stella Qiu, additional reporting; Mark Potter, Kirby Donovan and Nick Zieminski, editing.
(source: Reuters)