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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
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China's Wesizwe South African Platinum project will cut 70% of its workforce
Wesizwe Platinum announced on Thursday that it would lay off almost 500 workers or around 70% of its workforce at its Bakubung mine, South Africa. The company is transferring from a phased development to a one-stage ramp up. New platinum projects, like Bakubung? are becoming rarer. South Africa is responsible for 70% of global supplies of the metal that's used to make autocatalysts which reduce vehicle emissions. The industry is hesitant to expand production because it faces a long-term challenge from electric cars, which don't require autocatalysts. The Chinese-backed Wesizwe has abandoned its original plan to ramp up Bakubung in phases. The Chinese-backed?Wesizwe has abandoned its original plan for a phased ramp-up of Bakubung that would?have started with 1 million metric tons per year. Wesizwe announced in a press release that the?project?, which?has been in development for 15 years?, will follow a one-stage ramp up to 3.5 millions tons per annum. The company stated that "this revised strategy will require a reduction in employees to achieve and maintain the production profile envisaged in the updated Business Plan." The company added that the proposed restructuring would affect 497 employees at various levels and disciplines across the business. Wesizwe's anchor shareholder, China-Africa Jinchuan Investment said that maintaining the current "headcount" of 706 employees was not sustainable. The 'Bakubung Platinum Project' is behind schedule in its production due to a number of factors, including funding delays, COVID-19 disruptions, labour unrest and community protests, as well as a cyber attack. Wesizwe didn't give a date for the production of the project under the new plan. (Reporting and editing by Joe Bavier; Nelson Banya)
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As markets weigh US-Iran optimism, gold rises as the dollar and oil weaken.
Gold prices grew on Thursday as a result of a weakened dollar and a drop in crude oil prices. Investors also reassessed their expectations regarding a possible resolution to the U.S./Israeli conflict with Iran. As of 0739 GMT, spot gold rose 0.8% to $4,465.56 an ounce. U.S. Gold Futures for August Delivery gained 0.6% to $4493.30. Dollars fell, lowering the price of greenback bullion for holders of other currencies. Gold's gains remain very dependent on oil and the dollar. It only moves higher when they retreat, so it is highly dependent on positive U.S. - Iran headlines to sustain any?momentum, said Tim Waterer. Chief market analyst at KCM Trade. The Trump administration announced on Wednesday that Israel and Lebanon had agreed to a ceasefire in order to end hostilities. This boosted hopes for a wider deal to 'end the Iran conflict. The Republican-led U.S. The Republican-led?U.S. The oil prices fell on Thursday as the ceasefire agreement between Israel and Lebanon boosted expectations of a U.S. Iran peace deal. Increased oil prices can accelerate inflation and make interest rates stay higher for longer. Gold is often seen as a hedge to inflation but higher rates can weigh on the metal. "I don’t think we’ve seen the end?of?the bullrun,?but in general it's time for a shakeout." Matt Simpson, senior analyst at StoneX, said that he expects choppy trading as we approach the end of the year, with a slight bias upwards around $5,000. John Williams, the New York Federal Reserve president, said he did not expect inflation to be a long-term risk. He also reiterated that there was no need to change U.S. policy at this time. (Reporting by Pablo Sinha in Bengaluru; Editing by Sherry Jacob-Phillips and Ronojojo Mazumdar) Spot silver increased 0.8% to $73.26 an ounce. Platinum gained 1.1%, to $1879.75. Palladium rose 0.6%, to $1310. (Reporting and editing by Sherry Jacobi-Phillips, Ronojoy Mazumdar and Pablo Sinha from Bengaluru)
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The Indian monsoon arrives in Kerala three days later than normal
The weather office reported that monsoon rains arrived in India's southernmost State of Kerala, three days later than normal, offering relief from the brutal heat wave which has pushed power demand to record levels. Around June 1, the monsoons that are critical to India's $4 trillion economy - Asia's largest - begin to hit Kerala before spreading across the entire country by mid-July. Monsoons provide almost 70% of all the rain needed to irrigate rice, corn and cotton farms, as well as to replenish aquifers,?reservoirs, and soybean and sugarcane fields. The India Meteorological Department predicted last month that El Nino would weaken the monsoon by 2026, resulting in the lowest rainfall for 11 years. This has fueled concerns about?crops and food prices, as well as growth. IMD reported that the?southwest Monsoon' has covered all of Kerala, as well as parts of Tamil Nadu. It said that conditions are favorable for the group to continue its advance into Goa, areas of Maharashtra, Andhra Pradesh and Karnataka as well as the remaining parts of Tamil Nadu in the next two or three days. Heatwaves are affecting several Indian states, with temperatures exceeding 40 degrees Celsius. IMD last month said that India will receive rainfall below average in June, less than 92% the long-period mean. A Mumbai-based dealer at a global trading house said that the planting of summer-sown crop is unlikely to be affected by the monsoon, if it 'covers the remainder of the country on schedule', as it has in the past despite a late onset. (Reporting and editing by Christopher Cushing, Joe Bavier, and Rajendra Jadhav)
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China will reduce domestic retail prices of gasoline and diesel from June 5,
China will reduce domestic retail prices on 'gasoline and Diesel' from Friday, its second cut since the start of the Iran War which has caused global oil prices to rise and constrained global energy supplies. The National Development and Reform Commission, a state planner, announced on Thursday that the retail gasoline and diesel prices would be reduced by 525 Yuan ($77.52), and 505 Yuan ($50.52), respectively. A 50-litre fuel tank filled with?92-octane gas can be filled for about 20.5 Yuan less. After factoring in Thursday's price reductions, Beijing has raised diesel retail prices by 1,530 yuan a ton since the start of the Iran War. To protect consumers, however, the state planner also restricted the increases to half the rises implied by China’s pricing mechanism. In May, higher oil prices increased the cost of fuel for consumers. This impacted domestic gasoline and diesel consumption. OilChem data show that China's gasoline consumption and diesel production in April dropped by 16% compared to the same period last year. This was followed by a 13% drop in May. In 2025, this will be a 3.7% annual decline. According to Chinese consultancy JLC, gasoline and diesel consumption is likely to remain low in June. In a report, the company said that it expects to see gasoline demand remain pressured by high oil prices, and the displacement of?EVs, despite an increase in holiday travel. Diesel demand may increase slightly as summer harvests peak, increasing agricultural fuel consumption. JLC said that the pressure of alternative energy sources and heavy rainfall in certain areas due to El Nino could keep diesel consumption low in June. Every 10 days, the NDRC adjusts gasoline and diesel retail prices. Its rates are based on changes in global crude oil prices, as well as processing costs, taxes and distribution expenses, as well as appropriate profit margins. $1 = 6.7726 Chinese Yuan Renminbi (Reporting and editing by Christopher Cushing, Liz Lee and Shi Bu;
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Nine people killed in Gaza by Israeli strikes, say medics
Health officials reported that Israeli strikes in Gaza Strip killed nine Palestinians including five family members in separate attacks on Thursday. Medical personnel said that 'Israeli planes carried out a series of strikes on four apartments at the same time on Thursday morning, killing nine people and injuring 15. The medics reported that one of the strikes resulted in the deaths of five members of a family, including both parents. The Israeli military did not immediately comment on the two incidents. The footage showed furniture that was damaged and burned inside a building which had been blown out. Debris was thrown yards into the road. Video circulated on Palestinian social networks, but it was not verified immediately. It showed people trying to retrieve bodies from an apartment that had been set ablaze after a?Israeli strike. They were holding blankets. After the conflict that began in October 2023 with Hamas attacks against southern Israel, the ceasefire brokered and negotiated by U.S. president Donald Trump failed to stop Israeli attacks in Gaza. Israel now controls over half of the enclave. The indirect talks to implement the second phase of the agreement, which includes disarmament by the group and the withdrawal of the israeli?army, have stalled. Israel claims that its strikes aim to thwart imminent attacks. Israel also claims that it allows aid and goods into Gaza. Gaza's health officials, who do not differentiate between combatants and civilians, have reported that 930 Palestinians were killed by Israeli attacks since the truce started. Israel's military announced that four Israeli soldiers were killed by militants in the same time period. (Reporting and editing by Jacqueline Wong; Nidal al Mughrabi)
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)
(source: Reuters)