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Gold prices fall for the third consecutive month as inflation worries linger
Gold prices fell for the third consecutive month as fears about rising energy costs fueled expectations of higher rates. As of 1151 GMT, spot gold was up by 0.9% to $4,532.03 an ounce. On Thursday, gold fell to its lowest level in two months, $4,365.76, but it closed higher. Metal has dropped?around 2 percent so far in this month. U.S. Gold Futures for August Delivery rose by 0.7% to $4.562.60. Gold remains negatively correlated to oil which impacts inflation and monetary policy. "Gold is positively correlated to lower oil prices, which reduces the likelihood of rate increases," said UBS analyst Giovanni Staunovo. Oil futures dropped more than 1%, and were on course for their steepest weekly drop since early April. This was after reports that U.S. officials and Iranian officials 'agreed on Thursday to extend the ceasefire and remove restrictions on shipping through Strait of Hormuz. The agreement has not yet been approved by Donald Trump, the U.S. president. Iranian state media also said that it was still in its preliminary stages. The 'Iran War' has led to higher energy costs in the U.S., which have accelerated inflation. The surge in prices confirmed economists' belief that the Federal Reserve will hold interest rates at the same level well into next, with some expecting a rate increase by the end this year. Gold is considered to be a 'hedge against inflation', but the non-yielding investment tends not to perform well in environments with high interest rates. "May 2026 was a time of consolidation on global markets after a turbulent first quarter." Geopolitical tensions, inflation fears and easing safe haven demand continued to influence sentiment. However, a firmer outlook on interest rates and a softer outlook for the economy impacted precious metals in May," wrote precious metals trading company?Rotbart & Co. Spot silver remained at $75.61 per ounce, platinum fell 0.1% to 1,920.75 and palladium rose 0.8% to 1 378.67. Palladium and platinum were on course to lose money in the month of March, but silver was expected to gain.
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Oil tumbles, stocks gain on US-Iran deal hopes
Oil prices fell and were headed towards a weekly decline as traders awaited clarification on the efforts to reopen Strait of Hormuz, and extend an?U.S.Iran ceasefire. United States and Iran reportedly agreed to lift shipping restrictions and extend their ceasefire, according to sources. However, U.S. president Donald Trump is yet to approve this deal. Iranian state media also said that it was not finalized. Oil futures dropped around 2%, and are on course for their biggest weekly drop since early April. MSCI's global stocks index rose by 0.4%, reaching a new record high. Chipmakers led the gains after Dell's upgraded forecasts boosted AI sentiment. Benchmarks in Tokyo, Seoul, and other cities rose by 2.5% and 3.5% respectively. Jason da Silva is the director of global investments strategy at Arbuthnot Latham. Gains in other countries were modest. Wall Street futures were largely flat, but European stocks gained 0.5%. S&P 500 closed Thursday at a record 7,563.63. Dollar was set for a?small weekly decline due to lower U.S. Treasury rates. Analysts said, however, that the drop in yields could be limited as a U.S. Iran deal is unlikely quickly to reverse inflation pressures caused by elevated fuel prices. Jason Wong is a senior?market analyst at BNZ Wellington. He said that the?market has already taken the view that a?deal's going be done, and the Strait will be open. The main point is that it eliminates the tail risk of an extremely, very bad outcome. I don't believe it's an okay to let oil fall $20 or Treasurys drop 20 points. Investors also monitor other geopolitical risk. NATO member Romania reported on Friday that two people were injured by a Russian drone during an attack overnight on Ukraine. This was the first time a drone has hit a heavily populated area of Romania in this war. KIWI TRYS TO LIFT OFF WHEN YEN IS SQUEEZED Global bond yields have fallen this week. The U.S. 10-year Treasury yield is now at 4.4453 percent. The euro zone's largest four economies saw their inflation rate rise above the European Central Bank target of 2% for the third consecutive month in May. This was due to a rise in fuel prices triggered by the "Iran War" that began to affect other prices. Overnight U.S. consumption, income and home sales data came in?below expectations?, with inflation running hot, but just a bit below forecasts. In Japan, core annual inflation in Tokyo was below the central bank’s 2% target in May for the fourth consecutive month. However, a rebound in factory activity indicated resilience and supported a rate hike in June. The yen remains under pressure after sliding back to levels that prompted suspicions of intervention. The yen was just below the 160 mark, which is considered a key level for policymakers. The Ministry of Finance announced on Friday that the Japanese authorities spent 11.7 trillion yen (roughly $73.5 billion) between April 28 and May 27 on currency interventions. This is a small fraction of their $1 trillion war chest. The euro dipped 0.1% to $1.164175. The New Zealand dollar has been a major mover this week, rising about 2% against the U.S currency after the Reserve Bank of New Zealand held rates steady on Wednesday but delivered a more-hawkish-than-expected outlook.
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Hitachi Energy India aims to grab a bigger share of the data centre boom by implementing 'grid-to rack'
Venu Nuguri, the CEO and Managing Director of Hitachi Energy India, told?that they plan to capture 30% of the data centre industry's overall spending, up from their previous goal of 10-15%. According to consulting firm IMARC Group, India's data center market is expected to grow from $5.55 billion to $13.11 billion between 2025 and 2034. This growth will be driven by digitalization, cloud adoption, and increasing AI workloads. Hitachi Energy India is a subsidiary of Hitachi Energy in Zurich. It manufactures and supplies power equipment, grid technology, and data center solutions for several industries. It controls about half the high-voltage direct-current (HVDC), or bulk electricity, market in India. The company had previously estimated that it could reach between 10%-15% (of the total data center spending) in the country through its equipment and software offerings. Nuguri's "grid to rack" solution integrates power infrastructure from grid level connection to server rack distribution. Nuguri stated that the solution would increase the market addressable by the company by 10%-15% from the total data centre segment. Hitachi Energy India announced this week a 20 billion-rupee investment ($210.53 millions) in a?large greenfield power transformer facility located in Gujarat in western India. This brings the company's cumulative capex up to 40 billion rupees, spread across 19 factories in eight locations. The company ended 2026 with an order backlog of 296 billion rupees, a record. Nuguri stated that the firm was "actively" looking at acquisitions, including data centres, digital layer, power consulting and others, to fill in capability gaps. According to the Ministry of Power, India's peak?power?demand reached a record 270.8 Gigawatts in may, an increase of 68% over 148 GW from 2014. Data showed that demand?is expected to double to 458 GW in 2032. Nuguri, the CEO of Nuguri, said this is a structural tailwind which the company considers to be one of its main growth drivers. $1 = 95.0000 Indian Rupees (Reporting and editing by Abhinav Paramar in Bengaluru)
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Analysts raise oil forecasts as energy flows slow down
A monthly poll released on Friday showed that analysts have raised their oil price forecasts to 2026 for the third time since the Iran War began in February. They cite an 'extended timeline' for normalising energy flows back to pre-conflict levels. According to a?survey? of 33 economists, analysts and other experts, Brent crude will average $90.44 a barrel by 2026 compared to the $86.38 per barrel forecast last month. U.S. crude oil was projected to average $84.63 per barrel, up from the April view of $80.07. The forecasts are up about 40% compared to February estimates, which were $63.85 per barrel for Brent and $ 60.38 per barrel for WTI. These estimates were published just a day prior to the U.S.-Israeli strike on Iran. Brent and WTI are at four-year highs of more than $126.41 a barrel and $119.8 a barrel respectively, since the war began. The closure of the Strait of Hormuz caused sweeping disruptions in energy supplies. Prices remain below 2008 record highs of more than $147 per barrel. "It is unlikely that prices will reach new records in this year." Surabhi Menon, EIU India, said that even though prices are forecast to continue increasing until July this year, the increase will only be marginal compared to current high levels. This is based upon the assumption that war in Iran will remain in the current state (with the Strait of Hormuz shut and a ceasefire) until the end of July at the very least. Kpler data showed that the monthly crude oil exports of the Middle East region, which is the largest oil exporting area in the world, dropped to less than half their previous level, at about 8.8 million barrels a day, since March. Thomas Wybierek is an analyst with NORD/LB. He said that the disruptions will last longer than expected, and the trade flow through the Strait of Hormuz could reach levels similar to those before the crisis. Even if a short-term ceasefire is reached or a type of peace contract is signed, the amount of oil and gas delivered by sea will not be the same in 2026. Analysts polled predict that the global oil market will face a significant supply deficit by 2026. Estimates range from 500,000 to eight million bpd. In May, the Organization of Petroleum Exporting Countries forecast a 1.17 million bpd increase in the global?oil?demand in 2026. This is down from the 1.38 million bpd previously expected. The U.S. Energy Information Administration also predicted a decline in demand of about 420,000 bpd. "The?drag on demand is increasing due to weaker macro-conditions. The?consumption is being impacted by higher prices, weaker trade flows and GDP downgrades. The conflict has the effect of tightening up supply and slowing down demand growth," Crisil analysts said. Analysts expect a rise in non-OPEC oil production, as inventories are expected to be reduced. This will keep global stock levels under pressure. Four sources have said that the seven leading OPEC+ countries are likely to agree on a modest increase in July production when they meet next week. Tobias Keller is an analyst at UniCredit. He said: "The constraint that has to be met by the government is not quotas, but rather the inability of moving incremental barrels across Hormuz. This means that output policy will remain largely symbolic, while exports are still impaired."
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Chicago grains are mixed as the markets evaluate US-Iran ceasefire agreement
Chicago wheat and corn futures declined on Friday, while soybeans rose. The'market' assessed the impact of the possible new ceasefire agreement between the United States an Iran. The weather conditions in the U.S. grain belts were also a major topic. Crude oil futures have been a major factor in recent grain prices. This is because reports indicated that the U.S. had agreed with Iran on a possible ceasefire extension. The markets expect that any?U.S. Iran peace deal would cause a sharp fall in commodity prices. Chicago Board of Trade's most-traded Wheat fell?0.1% at 1055 GMT to $6.23-1/4 per bushel. Corn dropped 0.3% to $4.54-1/4 bushels, while soybeans rose 0.3% to $11.99. "Wheat and corn are mixed today, as the market assesses exactly what a potential?U.S./Iran sixty day ceasefire will mean, since technically, there has been an?easefire? since April," Matt?Ammermann said, commodity risk management at StoneX. The Midwest weather in the United States continues to be favorable with some much-needed heat. This is weakening the wheat crop, but rains are soon needed for U.S. soybean and corn crops. Soybeans were also encouraged by the expectation of a strong demand for biofuels to be blended with U.S. fuels, under?the Renewable Volume Obligations (RVOs). Ammermann stated that "Soybeans are continuing to trend higher. However, the bean oil story remains positive for the complex because U.S. cash bean oil supplies are in high demand due to?RVO obligations as well as record crush margins at the moment." Wheat gains have been limited by the upcoming harvests in the Northern Hemisphere. The U.S. crop was affected by drought but many other countries are on track to have good crops. According to traders, China may start purchasing U.S. farm products and soybeans under the new trade deal. Russia's Agriculture Ministry said Friday that the country is anticipating a?decent 2026 grain crop,? signaling export competition with the U.S.
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Colombians vote on peace, economy and economic issues
Colombians will vote on Sunday, in what could be 'the first round' of a presidential elections. This is amid a deep polarization among those who want to continue with the current leftist government versus those who are pushing for change to restore economic growth and security. Ivan Cepeda is the leading candidate in the polls for the leftist Historic Pact Coalition. He has pledged to support President Gustavo Petro’s social programs, and to pursue peace with illegal armed group to end a six decade internal conflict. Cepeda is a 63 year old philosopher who has been a congressman since 2010. He has proposed tax reforms that would broaden the tax base and levy wealth tax?as well as reduce exemptions from large companies in order to fund social expenditures. Cepeda has stated that he's open to suggestions from the left on how to reform the "constitution". Cepeda's communist leader father, killed in paramilitary attacks in 1994, is facing a divided Right?led by Abelardo de?La Espriella, an independent businessman, and Senator Paloma valencia, backed by former President Alvaro Uribe. A HARSH APPROACH TO ARMED GROUPS De La Espriella is a 47-year old political outsider whose fans call him "The Tiger." His campaign has focused on security, shrinking state and reviving economy. His proposals include a tough response to crime and drug trafficking, as well as illegal armed groups. He also proposes strengthening the armed services and building mega-prisons. He wants to "cut taxes" and revitalize the oil and mining sectors. Valencia, 48, is a lawyer running for the Democratic Center Party, which is a right-wing party. She has also stressed security and economic recovery. She has pledged to fight illegal armed group, stop Petro's peace negotiations, reduce?corporate tax to boost employment? and pursue reforms in healthcare, justice, and pensions. The polls show that centrist candidates such as former Antioquia governor Sergio Fajardo, and former Bogota mayor Claudia Lopez have a lower rating than in previous elections. According to surveys, it's unlikely that any candidate will receive more than 50% on Sunday. This means the top two candidates would go on to compete in a runoff vote on June 21. Whoever wins will face many challenges including stabilizing the public finances in Latin America's 4th largest economy, reducing poverty and violence related to internal conflict as well as addressing social needs. Over 41 million Colombians can vote at polling stations that open in the morning (1300 GMT), and close eight hours after. Reporting by Luis Jaime Acosta. Editing by Julia Symmes Cobb and Rod Nickel.
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Gold prices fall for the third consecutive month as inflation worries linger
Gold prices rose?on Friday, fueled by hopes of a possible U.S. Iran ceasefire. However, they were on course for their third consecutive monthly decline due to concerns over energy-driven inflation. As of 1005 GMT, spot gold was up by 0.8% to $4,528.19 an ounce. On Thursday, gold fell to its lowest level in two months, $4,365.76, but ended higher. Metal prices have fallen by 2% so far this month. U.S. Gold Futures for August Delivery rose 0.6% to $4,59.10. Gold remains negatively correlated to oil, which impacts on inflation and monetary policy. "Gold is positively correlated with lower oil prices, as it reduces the likelihood of rate increases," said UBS Analyst Giovanni Staunovo. After reports that U.S. officials and Iranian officials had reached an agreement to extend the ceasefire on Thursday and lift shipping restrictions through the Strait of Hormuz, oil futures dropped more than 1%. The agreement has not yet been approved by Donald Trump, the U.S. president. Iranian state media also said that it was still in its preliminary stages. The Iran 'war' has led to higher energy prices in the U.S., which have accelerated inflation. The surge in prices confirmed economists' belief that the Federal Reserve will keep interest rates the same well into next, and some are even anticipating a rate increase by the end this year. Gold is a non-yielding investment that tends to be under pressure when interest rates are high. "May 2026 was a time of consolidation on global markets, following a turbulent quarter. Geopolitical tensions, inflation fears and other factors influenced sentiment. However, the precious metals market was impacted by easing safe haven demand as well as a firmer outlook for interest rates. Spot silver dropped 0.2%, to $75.51 per ounce. Platinum fell 0.3%, to $1.917.96. Palladium rose 0.4% to $1373.88. Silver and palladium are on course to gain monthly, while platinum is headed for a loss.
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Fed's Schmid warns that oil shocks are not temporary
Jeffrey Schmid, President of the Federal Reserve Bank of Kansas City, said that the already high levels of inflation make it difficult to assume that the current energy shock will only have a temporary effect on prices and can be ignored. "My main concern is the inflation which has been too high and above target for a long time," Schmid stated in a text of a talk to be given before a conference held in Iceland. I place little weight on the assumption that the recent rise in prices will be temporary within a reasonable time frame. As such, "my focus remains on inflation in setting the right course for policy," he said. Schmid didn't say how inflation concerns influenced his expectations for monetary policy. FED RATE OUTLOOK SHIFTS Market participants are now expecting an increase in interest rates, rather than a rate cut later this year. Fed officials said that tighter monetary policies are on the table, if inflation doesn't decline. Some Fed officials have said that tighter financial conditions and the end of market expectations for rate cuts provide enough restraint to allow officials time to evaluate the data. Fed officials are expecting inflation pressures will ease this year. However, they base their outlook on the hope that President Donald Trump's Iran war will be resolved quickly. U.S. Energy Producers Caution Schmid noted in a speech that the U.S. was less vulnerable to energy shocks than it had been previously, but the higher gas prices still affect the ability of consumers to spend. He also said that U.S. oil companies are not producing more oil despite the higher prices. The official stated that "my discussions with firms in the region indicate a high level of caution," adding that "over the past decade my contacts have moved towards a far greater 'capital discipline, and are reluctant to increase their production while prices remain uncertain." In his remarks, the bank president said that "most indicators indicate continued steady growth" and "I think the labor market has reached a balance, despite the potential disruptions, but not yet realized, of AI."
MORNING BID EUROPE - Another day, another Iran Deal Moment
Tom Westbrook gives us a look at what the markets will be like tomorrow in Europe and globally.
Markets will have to wait until the weekend, as sources claim that the U.S. has reached an agreement with Iran to extend their ceasefire and reopen the Strait of Hormuz. The final step is now up to U.S. president Donald Trump.
As of now, the market has been relatively quiet in Asia. The dollar held steady, and bonds maintained gains from earlier in the week. Investors hope that higher fuel prices will give Trump less room to walk away.
Markets are concerned that rising borrowing costs will increase economic stress and put pressure on risk assets.
The European Union will release its inflation figures on Friday. Although the?rises? are expected to be relatively small, they are likely to reinforce expectations of a rate increase in June.
Tokyo's inflation rate remained below Japan's target of 2% for the fourth consecutive month, according to figures released on Friday. However, a rebound in manufacturing output keeps the argument for a rate increase in Japan next month alive.
The yen traded just above 160 per dollar. This level has traders apprehensive and unwilling to test the authorities' resolve to defend the currency.
Meanwhile, AI euphoria carried stocks higher.
Dell raised its AI server revenue estimate and the stock price rose 39% after hours. In Hong Kong, Lenovo, the computer maker, has seen its stock price soar by 39% in after-hours trade. This is the largest weekly gain since 1997.
The following are key developments that may influence the markets on Friday.
- Inflation in Germany, France and Italy
Canadian GDP
- US-Iran deal progress
(source: Reuters)