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Dollar and oil prices fall as optimism about peace in the Middle East pushes gold prices higher
Gold prices rose Thursday as hopes for a resolution to the Middle East conflict led to a drop in oil and dollar prices, which eased fears of inflation and rate hikes. As of 1156 GMT, spot gold rose 1.7% to $4,506.19 an ounce. U.S. gold for August delivery rose 1.5% to $4533.60. Dollar eased making greenback bullion prices more affordable for holders other currencies. The Trump administration announced on Wednesday that Israel and Lebanon had agreed to implement a truce to end hostilities. This boosted?hopes of a broader agreement to end the U.S. - Israeli war against Iran. The Republican-led U.S. House of Representatives also?approved resolutions to prevent U.S. president Donald Trump from continuing his war against Iran. "A successful diplomatic result would allow crude flows to resume, and ease inflationary concerns." "An easing of geopolitical fears and lower oil prices could be a factor in helping bullion to extend its recovery," Nikos Tzabouras said, a senior analyst at Jefferies owned Tradu.com. Oil prices fell following the announcement of a ceasefire between Israel and Lebanon. Since the Iran conflict started in late February, gold prices have dropped by about 16%. The rise in crude oil prices can cause inflation and increase the probability of higher interest rates. Gold is often seen as an inflation hedge, but higher interest rates can weigh down on this non-yielding material. Metals Focus, a consultancy, expects gold to resume its bull market in the second half 2026. However, it sees total demand for gold falling by 2% due to double-digit losses from jewellery and central bank purchases. The near-term outlook for gold remains challenging. The precious metal may slip further into bear territory in the coming days. The combination of geopolitical risks and interest rates that are higher for longer benefits the U.S. Dollar, which is a strong headwind to?gold," Tzabouras stated. Investors are now awaiting the U.S. Nonfarm Payrolls Data for?May, due on Friday, to gauge Federal Reserve's monetary policies. Silver spot rose by 2.4%, to $74.44 an ounce. Platinum gained 2.1%, to $1.897.60. Palladium increased 1.8%, to $1.325.14. (Reporting and editing by Emelia Sithole Matarise and Shailesh Kumar in Bengaluru)
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Prices for ASIA RICE in Vietnam are rising on El Nino fears; Bangladesh rates remain high during heatwave
Vietnamese export prices for?rice rose this week on concerns about potential El Nino-related impacts on production. Meanwhile, rates in Bangladesh remain high as the country struggles with a heatwave. Vietnam's 5% broken rice On Thursday, the price was $415-$420 a metric ton. This is up from $405-410 a week earlier. Prices are rising due to concerns about the possible impact of El Nino in Asia on rice production, said a trader in Ho Chi Minh City. He added that Vietnam is prone often to harsh weather conditions. World Meteorological Organization stated that there is a 80% chance for an El Nino to develop between June and August and a 90% probability it will last until at least November. Data released by the government on Wednesday showed that Vietnam exported 925,000 tonnes of rice in May. This is a 19% increase compared to a year ago. The total amount of rice exported by Vietnam in the first five months of the year was 4.3 million tons. This is a 2.4% rise from the previous year. A mild to moderate heatwave in Bangladesh is straining the current harvest. Farmers say that temperatures in the high 90s are impacting yields in some areas and have accelerated dehydration. More than 200,000 tons of rice have been damaged by heavy pre-monsoon rainfall, causing a further shortage. India's 5% Broken Parboiled Variety The price of a ton was quoted at $337-345 this week. This is unchanged from last week. The price of Indian 5% Broken White Rice was $338-$344 per ton. Other suppliers have limited excess stocks. In anticipation of a lower?production due to El Nino next season, they are raising their prices. Indian prices, on the other hand, remain stable due to ample supplies," said New Delhi-based dealer. Thailand's 5% broken rice The price was $450, compared to a range between $450 and $460, traders in Bangkok reported. A trader stated that prices were firm because of the rising price of broken grain used as animal feed. This has increased costs. The trader stated that markets are waiting for the next crop to be harvested in three months.
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Brunei Sultan announces Cabinet Shake-up and appoints Sons as Ministers
Brunei ruler announced major cabinet reshuffle Thursday. He created new key 'portfolios' and appointed two of his sons to ministerial positions, in a possible succession plan for the oil-rich tiny sultanate. This is the first reshuffle since 2022, and Brunei on the island of Borneo faces pressure from a global oil crisis sparked off by the U.S./Israeli war against Iran. The diamond jubilee of Sultan Hassanal Bolkiah - the longest-reigning monarch in the world who was crowned in 1967 – is also a year away. After undergoing knee surgery in January, the 79-year old, who has multiple roles in government and holds multiple positions, made limited public appearances in this year. In a television broadcast, Sultan Hassanal announced that he will continue to hold key roles as prime minister, defense minister, and finance minister. Prince Abdul Malik would become the first minister in the Prime Minister's Office. Prince?Abdul Mateen, a polo fan who is well-known on social media, was named?foreign Minister, a position previously held by the sultan. Crown Prince Al-Muhtadee Billah, his eldest son, retained his position as Senior Minister in the Prime Minister’s Office. Sultan Hassanal announced three new ministerial positions to improve policy coordination within the government. He said that the Primary Resources and Tourism Ministry will also be reorganized as the Ministry of Economy, Trade and Industry. He said that the aim was to "accelerate development of priority industries, strengthen economic diversification, support sustainable growth, and create meaningful job opportunities." In the reshuffle, the most women have been appointed to the cabinet, including three deputy ministers and the minister of education. Brunei is one of few countries that has benefited from the war in Iran. Its crude oil, refined product?and gas exports have increased in recent weeks. It faces rising subsidy costs to keep pump prices low in the region. Brunei banned foreign-registered cars with fuel tanks that were less than three-quarters filled from entering the nation last month in an effort to curb cross-border smuggling and conserve domestic supplies. The energy department announced on Wednesday that the government has established a special panel to monitor and coordinate the measures taken by the government to address the effects of conflict in the Middle East. (Reporting and writing by Ain Bandial, Editing by David stanway; Writing by Rozanna latiff)
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India and Venezuela have a 'perfect complementarity' in the energy trade amid Gulf Crisis
India and Venezuela tried to strengthen their ties on Thursday in the 'energy sector. New Delhi said that Caracas views it as a 'preferred partner in this sector, at a moment when global oil supplies are disrupted due to the Middle East Crisis. Venezuela's interim president Delcy Rodriguez, along with a large delegation of ministers, is in India and met with Indian Prime Minster Narendra Modi Thursday. Rudrendra Tandon (East), Secretary in the Indian Foreign Ministry, said at a press briefing that the discussions between the two parties focused on cooperation in both upstream- and?downstream-energy projects. Tandon stated, "We work with a government friendly to India and that is interested in a partnership." "We are willing to reciprocate." Venezuela has been a friend for many years. We have worked closely together at the international levels, so it's just a return to normal. Tandon stated that Venezuela views India as a "preferred" partner in the energy industry. During her visit, which ends on June 7, Rodriguez will visit oil refineries in India. Mumbai, the financial capital of India, is where she will also meet with top leaders from the Indian energy sector. INDIA IS AN IMPORTANT BUYER VENEZUELAN OIL Reports indicate that India, with its purchases of 427,000 barrels of Venezuelan crude per day, was second only to the United States in terms of imports of Venezuelan oil. Reliance Industries, a subsidiary of India's Reliance Group, has become one of the top three buyers of Venezuelan oil in recent months. Kpler data shows that Venezuela is on track to become India's fourth largest oil supplier in May. Rodriguez's visit coincides with India's struggle to deal with the supply disruptions brought on by the U.S./Israeli war against?Iran. This conflict has effectively closed the Strait of Hormuz, a major conduit which carried 40% of South Asia's crude 'oil imports. India stopped purchasing Venezuelan crude oil last year after U.S. president Donald?Trump imposed a 25% tariff on countries that bought the South American nation's crude. The country resumed its purchases after sanctions were lifted in February following the signing of a landmark oil supply agreement between Washington and Caracas. The agreement was reached in January after the U.S. captured President Nicolas Maduro. Washington controls the proceeds of Venezuelan oil sales via bank accounts managed by the Treasury Department. Commercial terms are also governed by its guidelines. Reporting by Saurabh and Shilpa jamkhandikar; writing by Hritam Mukerjee, editing by YPrajesh
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Oil prices drop after Broadcom's dive
The world stock market?was facing a second consecutive day of declines on Thursday, as a glitch with the AI rally and renewed fighting between the U.S.A. and Iran dampened?the mood. Meanwhile, oil prices eased following the agreement by Israel and Lebanon to a 'ceasefire. Europe's stock exchanges started the day steady as crude and bond yields fell. However, Wall Street futures pointed lower and Asia had a tough session due to weakness in technology stocks. The stock market in Korea fell as much as 2,6%. In Japan, the Nikkei225, Hong Kong, and Taiwan, all of these markets ended lower between 1,4% and 1,7% following a 13% drop in Broadcom's share price in extended U.S. trade on Wednesday. The firm's revenue numbers for the second quarter were below expectations. However, it did not change its long-term sales forecast, which disappointed traders who saw it as an unusual sign that a major AI chipset maker may be losing steam. James Athey, Marlborough Fund Manager said: "You've seen a little softness on the equity markets after Broadcom. This suggests that we need some time to consolidate a very solid rally." It wasn't just about hoping and expecting, but it also raised the idea that the demand for chips will not continue to grow exponentially in the future. Brent crude was almost?1% less expensive at $97 per barrel after Lebanon, Israel and the Iran-aligned Hezbollah agreed to a ceasefire. There were few signs of a U.S. - Iran?peace agreement being imminent despite U.S. president Donald Trump's claim that progress could be made by the weekend. Kuwait briefly suspended air traffic after an attack. Bahrain reported intercepting three missiles as well as several drones. Abbas Araghchi, Iran's Foreign Minister, posted on Twitter that "no progress has been made" in the talks with the U.S., and that any hostile act would be met with a swift, decisive reaction. COORDINATED MOVEMENTS The yen has risen to 159.9 dollars per yen, allowing the Bank of Japan to take a breather from its 160-dollar threshold, which is the trigger for FX interventions. Minoru Kihara, the Chief Cabinet Secretary in Tokyo, said that the central bank should coordinate with the government following the recent comments by BOJ Governor Kazuo ueda that an interest rate increase is imminent this month. The U.S. Dollar Index, which measures the strength of the greenback?against six currencies?, was broadly stable near a 2-month high, at 99.45, after Wednesday's better than expected U.S. ISM Services Sector PMI data. The figures showed that businesses had preemptively ordered and built up inventories in anticipation of shortages or higher prices after the Iran War. The Republican-led U.S. House of Representatives approved a resolution Wednesday that would prevent Donald Trump from continuing his war against Iran. It is only symbolic as the measure must still be passed by the Senate. A two-thirds vote in both chambers would also be required to override a veto that was almost certain. The yield on the 10-year Treasury note in the United States was unchanged at 4.489%. In Germany, however, it fell by 1.5 basis points to 3.02%. This is ahead of a rate hike expected from ECB next week. Gold and the Aussie dollar also got a boost after a recovery in resource exports helped Australia's balance of trade return to positive territory. Bitcoin, however, fell 2.4%, dropping below $64,000. It has now fallen almost 25% over recent weeks. (Reporting and editing by Jan Harvey; Reporting by Marc Jones)
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Dollar and oil prices fall as optimism about peace in the Middle East pushes gold prices higher
The gold price rose?on?Thursday as the dollar and oil fell on hopes for a?resolution of the Middle?East?conflict, easing concerns about higher inflation and rate hikes. As of 0856 GMT, spot gold rose 0.7% to $4,464.79 an ounce. U.S. gold for August delivery rose 0.6% to $4491.80. Dollars fell, making greenback bullion cheaper for holders of other currencies. The Trump administration announced on Wednesday that Israel and Lebanon had agreed to implement ceasefires to end hostilities. This has boosted hopes for a wider deal to end U.S.-Israeli conflict against Iran. The Republican-led U.S. House of Representatives also approved a measure to prevent U.S. president Donald Trump from continuing his war against Iran. "A successful diplomatic result?would enable crude flows to be resumed and ease inflationary concerns." "A successful diplomatic outcome?would allow crude flows to resume and ease inflationary fears," said Nikos. Tzabouras. He is a senior analyst at Jefferies owned Tradu.com. Oil prices fell following the announcement of a ceasefire between Israel and Lebanon. Since the Iran conflict started in late February, gold prices have dropped by about 16%. The rise in crude oil prices may cause inflation and increase the likelihood of higher interest rates. Gold is often seen as an inflation hedge, but higher interest rates can weigh down on this non-yielding material. The consultancy Metals Focus expects the bull market in gold to resume in the second half of 2026. However, it sees total demand for gold falling by 2% due to double digit losses in jewellery purchases and central bank purchases. The near-term outlook for gold remains challenging and it could slide deeper into "bear territory" in the days to come. The combination of geopolitical risks and interest rates that are higher for longer benefits the U.S. Dollar, Tzabouras said. Investors are now awaiting the U.S. Nonfarm Payrolls Data for May, due on Friday, to gauge the Federal Reserve’s monetary policy direction. Silver spot rose by 0.8%, to $73.31 an ounce. Platinum gained 1.3%, to $1.883.15, while palladium increased 0.5%, to $1.30806. (Reporting and editing by Emelia Sithole Matarise in Bengaluru)
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Russia admits first time oil production is down and blames it on 'unscheduled Maintenance'
Alexander Novak, the Deputy Premier, said that the Russian oil production had fallen since the beginning of the year. He blamed the drop on unplanned refinery maintenance. Novak's remarks mark the first time that a Russian official acknowledged a decline in production this year. In April 2023 the world's third largest oil producer stopped publishing data about oil production, less than a year after it began its war with Ukraine. Novak didn't specify the reason for the refinery repairs, but Ukraine intensified its attacks on Russian refineries over recent months. Novak, a reporter at the St Petersburg International Economic Forum, said that the current production was indeed lower than what it had been?at the start of the year. This is because a number our oil refineries have unscheduled repairs. As a matter of course, we use our export infrastructure at its fullest capacity. The production will return to previous levels as the refineries resume full operation. According to the International Energy Agency, Russia's crude production dropped by 460,000 barrels per day in April compared to a year ago to 8.8 million bpd. Novak said that despite the United Arab Emirates' departure, the OPEC+ group still played a significant role on the global market for oil. He said that "in 'any case, OPEC, and our 'agreements which have proved their 'effectiveness, helps smooth fluctuations and volatility on global markets." Reporting by Vladimir Soldatkin, Olesya Astakhova; Writing by Felix Light. Editing by Mark Trevelyan, Jason Neely.
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Nine people killed in Gaza by Israeli strikes, say medics
Health officials reported that Israeli strikes in Gaza Strip on Thursday killed nine Palestinians including five members of the same family. Medical personnel in Gaza reported that Israeli planes had struck four apartments, among them the home of a family, just before dawn. At least 15 others were injured. The Israeli military didn't immediately comment on these attacks. The footage showed furniture that was damaged and burned in a building which had been blown out. The blast had thrown debris across the road. The video, which was circulated in Palestinian social media but could not be verified immediately, shows people entering an apartment with blankets and recovering bodies. "We were awakened by the strike around 2:30 in the morning. We found bits of flesh and people were asleep. Khalil Battaran, a neighbor of the family that was killed, said, "They say the war has ended but it isn't over." Gaza medics confirmed that only a girl survived the attack on a family home. "There is no safety in Gaza... They fire on us every day from there, and hit us with missiles. "It's futile," Batran continued. Negotiations have stalled. The ceasefire brokered and negotiated by Donald Trump, President of the United States, has not stopped Israeli attacks. Israel now controls more than half of the enclave after the conflict began in October 2023 with Hamas' attacks on southern Israel. The indirect?talks about implementing the second stage of the deal which includes Hamas disarmament, and Israeli army withdrawls, has stalled. Israel claims that its strikes aim to thwart imminent attacks. Israel?also claims that it allows goods and aid to flow into Gaza. Gaza's health officials, who do not differentiate between civilians and combatants, say that 930 Palestinians have been killed in Israeli airstrikes since the truce started. Hamas does not publish much information on the deaths of its fighters. Israel's military said that four Israeli soldiers were killed by terrorists in the same time period. Gaza's health authorities claim that more than 72,000 people have died in Gaza since the beginning of the war, with most of them being civilians. Israel claims it takes extraordinary steps to avoid civilian casualties. Israel said that Hamas had killed 1,200 and taken 251 Israelis and foreigners hostage during its attacks on October 7, 2023. Reporting by Nidal Al-Mughrabi from Cairo and Dawoud Ab Alkas from Gaza; editing by Jacqueline Wong, Kate Mayberry
MORNING BID AMERICAS - Summer clouds
What is important in the U.S. and international markets today by Mike Dolan Editor-at-Large of Finance and Markets
On Wednesday, the?S&P 500 did not achieve its 10th consecutive daily gain and some clouds are forming in the markets. Broadcom, the sixth largest company in the world by market capitalization, has stumbled despite the frenzy surrounding the hot chip sector. Stocks of the chipmaker dropped by more than 13% overnight after a slight miscalculation in sales and revenue estimates. This?reaction is a sign of the high bar that companies have to meet in order to impress the markets during the AI boom. According to one analyst, today's market demands perfection.
Below, I'll go into more detail. Check out my most recent column about why Kevin Warsh Fed may catch investors by surprise. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
SUMMER CLOUDS Broadcom’s missed opportunity also highlights the increasing competition in this sector. Shares of chip designers like Marvell Technology, for example, have soared over the last week. Marvell shares reached a new record after Nvidia's CEO Jensen Huang stated on Tuesday that the company is likely to be a trillion dollar company.
In the meantime, the broader economy shows few signs of slowing down, which fuels hawkish betting on the Federal Reserve’s next move. Futures are now showing almost a 50/50 chance of an interest rate increase as early as October. The Fed's "Beige Book", which describes the economic conditions that policymakers will face when they meet in October, shows activity has increased even though energy prices have increased.
The ISM business survey for May and the ADP private sector payroll numbers, which exceeded expectations by 122,000 in May, are both evidence of this.
Tomorrow, the May employment report is released. However, overall U.S. surprise?indices are at their highest level in three years. Oil prices are still high as we enter the crunch month of global crude supply. There has been little relief in the energy sector. Fighting continued in southern Lebanon, despite reports that a ceasefire had been reached between Israel and Lebanon. This gave rise to hopes of a wider Iran deal. The Japanese yen, despite warnings by BOJ sources, continued to flirt at 160 per dollar, despite the calm on the currency markets. While investors wait for a wave mega IPOs to hit the market this summer, private equity and credit markets are experiencing renewed jitters. Swiss asset manager Partners Group faces heavy redemption requests and will cap withdrawals after exceeding the 5% quarter limit. As the U.S. market opened on Thursday, U.S. index futures had a'red' hue while oil prices and Treasury rates were slightly lower than Wednesday's highs. Bitcoin is almost forgotten as regular tech stocks are now making extraordinary short-term movements that were once the domain of crypto-markets. It has lost almost 20% of its value since mid-May, and on Wednesday it fell to the lowest level since early February.
Chart of the Day Despite the fact that a ceasefire agreement between Israel and Lebanon raised hopes for a wider agreement to "end" the U.S. and Israeli war against Iran, fighting has continued in both the Gulf and Israel. The global crude oil prices are still about 35% higher today than they were before the war, and there is growing concern about diminishing reserves. U.S. crude stocks fell by 8,000,000 barrels, to 434,000,000 barrels during the week ending May 29, according to the Energy Information Administration. This is twice what analysts expected.
Watch today's events
* U.S. Weekly Jobless Claims (8:30 am EDT), Q1 Productivity?and Costs (8:30 am EDT)
* Michelle Bowman of the Fed, Thomas Barkin from Richmond Fed, Jeffery Schmid, Kansas Fed, and Mary Daly, San Francisco Fed, all speak
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(source: Reuters)