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Gold increases as oil declines due to a pause in US/Iran strikes. Fed rate decision is in focus
Gold prices rose Monday as a pause between hostilities between the United States of America and Iran sent crude oil to a new low. This eased inflation fears ahead of this week's U.S. rate decision. Spot gold rose 0.5% to $4,074.22 an ounce at 1:45 pm EDT (1745 GMT), whereas U.S. Gold Futures for August Delivery settled 0.2% higher, at $4,077.00. The U.S. Dollar?index has weakened by 0.1%, allowing buyers to purchase greenback bullion at a lower price. Bart Melek is global head of commodity strategies at TD Securities. Brent futures dropped over 8%, to a new low in a week as?U.S. Donald Trump said to reporters that "good talks" are taking place with Iran "right away". After two weeks of strikes, the two countries have paused their attacks over the weekend. This has raised hopes of a diplomatic resolution that will de-escalate this conflict and allow shipping in the Strait of Hormuz to resume. Lower energy costs ease inflation fears and reduce bets on higher interest rates for longer. Gold is often seen as a hedge to inflation but higher rates can weigh down on the metal. CME FedWatch data shows that traders see a 62% chance of the policymakers keeping interest rates unchanged. They are, however,?pricing about an 82% chance that the U.S. will raise rates in September. Investors are also awaiting the U.S. The Personal Consumption Spending data for June is due Thursday. This will provide further clues on monetary policy. Data from Hong Kong's Census and Statistics Department revealed that China's net imports of gold via Hong Kong had more than doubled from June to the same month last year, but were down?more? than 5% on the previous months. (Reporting by Noel John in Bengaluru; Editing by Tasim Zahid, Jan Harvey and Joyjeet Das) (Reporting from Noel John, Bengaluru. Editing by Tasimzahid, Jan Harvey and Joyjeet Das.
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US Treasury continues to review its sanctions list and removes 84 individuals and firms
The U.S. Treasury has purged 84 more companies and individuals from its list of 17,000+ sanctions as part a larger?effort to streamline sanctions programs, and to make it easier for banks to pursue?the most serious terrorist financing schemes. In May, U.S. Treasury secretary Scott Bessent launched a major revision of its sanction programs and lists in order to remove outdated entries. This would ease compliance burdens for financial institutions. Later, he announced the removal of outdated targets. A Treasury official stated that the goal was "to ensure Treasury sanction remain sharp and focused and to remove any bloat from previous administrations," noting that over 3,000 names had been designated in 2024 compared with just 880 in 2017. Sanctions aren't meant to be used forever. Bessent also highlighted that the Trump administration was willing to impose sanctions against Russia's biggest oil companies, Rosneft & Lukoil. This is a move the Biden administration avoided out of fear of an increase in oil prices after Russia's full scale invasion of Ukraine 2022. The second batch of removals on Monday from Treasury's Specially Designated Nationals and Blocked Persons List includes 36 people that have died and their?associated listings, 33 Iraqi-related entities designated first in 1991 or 1992, seven outdated or defunct narcotics lists related to Colombia and eight disrupted drug kingpins. Treasury's Office for Foreign Assets Control (OFAC), updated the listings of 22 individuals and companies to include or clarify key identifiers that were missing. Treasury noted that each removal was done after a thorough review by other agencies, to make sure that the names removed would not be detrimental to U.S. national security or foreign policy interests. Brett Erickson is the managing principal of Obsidian Risk Advisors and he said that the Trump administration's efforts to streamline the list of sanctions makes sense. It will allow banks to concentrate on the most legitimate threats. He said that "at a time when so many things are happening on the front of sanctions, it is important to be as effective as possible or risk failure." The review so far has been focused on older sanctions, where there are often missing identifying information, such as place and date birth, unique identification numbers, nationality or gender. Treasury stated that adding more robust data would make compliance screening easier for financial institutions. Treasury noted that OFAC also found a few duplicate entries in its sanction lists. The?same property or person was included under different list entries more than once, Treasury stated. Treasury said in an internal document that it is reviewing targets that are outdated or difficult to screen in order to reduce the compliance burden for financial institutions, as well as improve national security outcomes. It added that the impact of sanctions should not be measured by the number of names on a list, but rather the effect, the impact, and the national security benefit. Treasury launched on June 29, a new portal online that allows sanctioned persons or firms to request to be removed from the list. This is part of an effort to streamline the process. Reporting by Andrea Shalal, Editing by Andrea Ricci
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Gold increases as oil declines due to a pause in US/Iran strikes. Fed rate decision is in focus
Gold prices rose Monday, as the pause in hostilities involving?the United States?and?Iran?sent?crude oil to a week-low. This eased inflation fears ahead of this week's U.S. rate decision. Spot gold rose 0.9% to $4,090.79 an ounce at 12:35 pm EDT (1635 GMT), and U.S. Gold Futures for August Delivery rose 0.5%, reaching $4,093.00. The U.S. Dollar Index has weakened by?0.1% making greenback bullion prices more affordable to buyers abroad. Bart 'Melek is global head of commodity strategies at TD Securities. He said that the main reason for the lower interest rates is because the oil'market has fallen from $100 to $90 in the last week. Brent futures dropped 8%, to a new one-week low after U.S. president Donald?Trump said that "good talks" are taking place with Iran "right now". After two weeks of strikes, the U.S. paused its attacks over the weekend. This raised hopes for a diplomatic solution to deescalate this conflict and restore shipping in the Strait of Hormuz. Lower energy prices reduce inflation fears and lower bets on higher interest rates for longer. Gold is often seen as a hedge to inflation, but higher interest rates can be detrimental to the metal. CME FedWatch data shows that 66% of traders expect policymakers to keep interest rates the same. They are pricing in an 80% probability of a rate increase in the U.S. in September. Investors are also awaiting the U.S. The Fed's preferred measure of inflation, Personal Consumption Spending data for June, is due Thursday. This will provide further clues about monetary policy. Data from Hong Kong’s?Census and Statistics Department revealed on Monday that China's net imports of gold via Hong Kong had more than doubled from the previous year in June. However, they had?fallen more than 5% compared to?the preceding month. Silver spot rose by 1.3%, to $58.94 an ounce. Platinum gained 2.7%, to $1.631.42, while palladium rose 4.1%, to $1.294.75. (Reporting from Noel John, Bengaluru. Editing by Tasim Zaid and Jan Harvey.
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Former FDA chief: Central Mexico could have widespread cyclosporiasis infection
Scott Gottlieb, former U.S. Food and Drug Administration commissioner, said on Monday that'some large growers and retail outlets have stopped sourcing their produce from a region in Central?Mexico linked to a cyclosporiasis epidemic because they are concerned about widespread contamination. A?FDA investigation linked the outbreak to Taylor Farms iceberg lettuce, served at?Taco Bell owned by Yum Brands, in nine states. Health regulators are investigating other products. According to the U.S. Centers for Disease Control and Prevention, there are 4,173 confirmed cases in laboratories, and more than 7,400 suspected cases. Michigan, where more than 9,000 cases have been recorded, said that it was still searching for the cause of any ongoing cases. Gottlieb, speaking on CNBC, said that multiple outbreak clusters in the Great Lakes Region, New York, and North Carolina appeared to be related to parsley?and cilantro?from Central Mexico. However, investigators haven't determined the exact source. A parasite of microscopic size, Cyclospora can cause gastrointestinal problems that last for a long time. Gottlieb stated that there may have been contamination in multiple fields of the area. He said that raw sewage may have reached the growing areas via irrigation, flooding, portable toilets overflowing by farm workers, or a sewage channel breach. "It seems that something happened in the central part of Mexico. He said, "We don't yet know what." The U.S. Department of Health and Human Services has not responded to the request. Requests for comments were not answered by U.S. grocery stores such as Walmart, Target, Costco, and Amazon Fresh. Restaurant operators like Taco Bell, Chipotle, Wendy's, and Taylor Farms also did not reply. Multiple Cluster Gottlieb stated that some of the 'larger growers' and retailers no longer source produce from the area because they 'are viewed as possibly?linked to outbreak. He said that a lot of this product was being removed from supply chains. This should help to mitigate the risk. He did not name the companies. Taylor Farms has said that it is no longer sourcing its products from the region, and closed down its production facilities there. Gottlieb stated that weather conditions have increased the?risks of contamination. This has led officials to expect a?worse-than-usual season for cyclospora. Gottlieb said that the real number of cases may be 10 to 20 times higher than what is reported. This is the biggest outbreak of cyclospora we've seen in history. (Reporting from Siddhi Mahtole in Bengaluru; Additional Reporting by Anuja Mistry, Editing by Caroline Humer and Tasim Zaid)
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Copper prices increase as US-Iran lull calms concerns over oil and economic growth
Prices of copper rose Monday, as oil prices fell after the U.S. & Iran ended hostilities. This eased?concerns over price pressures and economic growth. Benchmark copper prices on the London Metal Exchange were up 0.6% at $13,733 per metric ton, 1606 GMT. The Pentagon has suspended its campaign against Iran after 13 nights of increasing airstrikes by the United States. Iran has been holding fire for the past two days after it had responded to each night's U.S. airstrikes with its own attacks on countries in close proximity that house U.S. military bases. As the fighting paused, oil prices fell as hopes grew of a diplomatic resolution that would allow shipping to resume in the Strait of Hormuz. Tom Price, Panmure Liberum's analyst, said that the market was waiting for a resolution. "Rather than a war in progress, it is trying to price peace," he added. "Chile was?hit with unusual storms that put pressure on the grid of the country's power supply and raised questions about the copper production guidelines?across industry." According to the U.S. Geological Survey, Chile accounted 23% or 5.3 millions tons of global mined copper production last year. The market is also focusing on the copper stocks stored in warehouses approved by LME, according to traders. Stocks have fallen 30% to 272,975 tonnes since May's end. Since February of last year, producers and traders have been shipping copper to the United States, after President Donald Trump threatened to impose import tariffs. This has created a premium on U.S. Copper?over LME Prices. The U.S. Commerce Department had to finish a review of the copper market by June 30. However, Trump has yet to announce a tariff decision. Price of Panmure Liberum said that the movement of copper to the United States would tighten short-term supplies elsewhere, because inventories are just that: "short-term supplies". The market also watched as aluminium inventories fell to their lowest levels?this century due to supply constraints in the war-torn Middle East, which forces consumers to reduce stockpiles. Lead was up 0.5%, and aluminium gained 0.2%. Zinc rose 0.5%, to $3.615, while tin rose 1.1%, to $54,380, and nickel fell 0.8%, to $17.240.
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Oil and Treasury yields fall on Iran-US truce, causing stocks to be mixed
Oil prices fell and Treasury yields declined on Monday after U.S.?and Iran stopped their strikes at the weekend. This halted?two weeks worth of attacks. News of the pause in strikes by the U.S. and Iran over the weekend raised hopes of a diplomatic solution that would de-escalate conflict and allow shipping through the Strait of Hormuz to resume. Investors, however, remained cautious as tensions remain high. Saudi Arabia, Jordan, and Iraq all reported drone strikes on Monday as Tehran seemed to be testing President Donald Trump's new strategic U-turn. Jay Hatfield is the chief executive officer and chief investment office at Infrastructure Capital Advisors, a New York-based firm. "We were of the opinion that Iran would not come to a lasting agreement but we thought they'd?kick the can down to the next day." We might see some more can-kicking. Investors are also avoiding the central bank's interest rate announcements and important tech company earnings that are due this week. U.S. crude dropped 6.35%, to $83.66 per barrel. Brent was down to $90.18 a barrel on the same day. The yield on the benchmark U.S. 10 year notes dropped?2.42 points, to 4.655% from 4.679% at late Friday. The Dow Jones Industrial Average, the largest U.S. stock market index, had the best performance, rising by 346.81 or 0.67% to 52,294.06. The S&P500 rose 1.90 points or 0.03% to 7,414.01 while the Nasdaq Composite dropped 50.57 points or 0.20% to 24,925.25. The pan-European STOXX 600 Index rose 0.35% while Europe's FTSEurofirst 300 index rose 8.08 or 0.31%. CENTRAL BRANDS? IN FOCUS It is expected that the U.S. Federal Reserve will hold rates at their current level when its two-day conference concludes on Wednesday. However, traders are concerned about a possible rate hike. The Fed's expectations have been thrown into turmoil after recent increases in oil prices rekindled inflation fears. Fed Chairman Kevin Warsh’s preference for less guidance adds to the uncertainty about whether the central banks will raise rates. Fed funds futures traders currently price in 38% odds that a hike will occur on Wednesday, and 81% of a rise by September. Bank of England's policy announcement will be made on Thursday. The Bank of Japan will follow on Friday. Both are expected keep rates unchanged while highlighting the need to remain cautious about future inflation risks. The dollar fell 0.7% to 163.73. Gold prices rose 0.42% on commodity markets to $4,069.42 per ounce. A WAVE of COMPANIES? REPORT EARNINGS Investors will also be watching the earnings of S&P 500 companies, as approximately one-third are due to report their results this week. The results of "Magnificent Seven" members Microsoft.com, Amazon.com Meta, and Apple will be viewed as a test for the AI industry. The negative cash-flow reports of Alphabet and Tesla from last week added concerns about debt-fueled spending by corporations, while the strong stock market debut of Chinese chipmaker CXMT signaled a?intensifying competitiveness for the U.S. Semiconductor Industry. This is a big week. This week could determine if hyperscalers, semiconductors and memory stocks outperform the rest of the year," Thomas Hayes said. The week's data highlights include the U.S. second-quarter advance GDP reading. Calendar highlights include the June PCE Price Index, personal income and consumption data (weekly jobless claims), the second-quarter employment cost index and the July Michigan Consumer Sentiment Survey. The Eurozone data schedule includes the flash second-quarter GDP and July consumer confidence figures, as well as the flash inflation and June unemployment numbers. Ifo Institute survey released on Monday revealed that German business morale increased more than expected in the month of July. This was due to significantly higher expectations. (Reporting and editing by Joe Bavier; Additional reporting by Sruthi Shakar, Chuck Mikolajczak Johann M Cherian Ragini Mathur Florence Tan Trixie Yap, Ragini Mathematics, Johann M Cherian)
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Copper prices increase as US-Iran lull calms concerns over oil and economic growth
Prices of copper rose on Monday as oil prices dropped after the U.S. &?Iran ended hostilities. This eased concerns over price pressures and economic growth. Benchmark 'copper' on the London Metal Exchange rose 0.6% to $13,729 per metric ton as of 1427 GMT. The Pentagon suspended its campaign against Iran on Friday after 13 nights of increasing U.S. airstrikes. Iran has been holding fire for the past two days after it had responded to each night's U.S. airstrikes with its own attacks on countries in close proximity that house U.S. military bases. The oil prices fell as a result of the ceasefire in fighting, which raised the hopes of a diplomatic resolution that would allow shipping in the Strait of Hormuz to resume. Tom Price, Panmure Liberum's analyst, said that the market was waiting for a resolution. It is pricing in peace instead of an ongoing conflict. "Chile has been hit by unusually severe storms that have put pressure on the power grid and raised questions about the copper production guidelines across the industry." According to the U.S. Geological Survey, Chile accounted 23% or 5.3 millions tons of global mined copper production last year. The market is also focusing on the copper stocks stored in warehouses approved by LME, according to traders. Stocks have fallen 30% to 272,975 tonnes since May's end. Since February of last year, producers and traders have been shipping copper from the United States to the United States. This is because President Donald Trump has threatened import tariffs. The result was a premium on U.S. Copper compared to LME prices. The U.S. Commerce Department had to finish a review of the copper market by June 30. However, Trump has yet to announce a tariff decision. Price from Panmure Liberum said that the movement of copper to the United States would tighten short-term supplies elsewhere, because inventories are just that: "short-term supplies." Aluminium stocks have dropped to their lowest levels in the past century due to supply constraints in the war-torn Middle East. Lead was up by 0.5% and aluminium gained 0.5%. Tin rose 0.5%, while nickel fell 1.1%.
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Gold increases as oil declines due to a pause in US/Iran strikes. Fed rate decision is in focus
Gold prices rose on Monday as the United States and Iran agreed to cease hostilities, sending crude oil prices down to their lowest level in a week, which eased inflation fears ahead of this week's U.S. rate decision. Spot gold rose by 0.9%, to $4.087.59 an ounce, at 09:43 am EDT (1343 GMT), whereas U.S. Gold Futures for August Delivery rose by 0.5%, to $4.090. The dollar index weakened by 0.1%, making greenback-priced bullion more affordable for buyers overseas. The dollar index weakened by 0.1%, making greenback priced bullion more accessible to buyers abroad. Bart Melek is global head of commodity strategies at TD Securities. He said that the oil price has dropped from $100 to $90 in just one week, which is driving down interest rates. After two weeks of strikes, the U.S. paused their?strikes at the weekend. This raised hopes of a diplomatic resolution that would deescalate this conflict and allow shipping in the Strait of Hormuz to resume. Lower energy prices reduce inflation fears and lower bets on higher interest rates for longer. Gold is often seen as a hedge to inflation but higher interest rates tend to weigh on the metal. CME FedWatch data shows that 66% of traders expect the Federal Reserve to keep interest rates at their current level. They are still pricing in a rate increase of about?79% for September. Investors are also awaiting the U.S. The Personal Consumption Spending data for June is due Thursday. This will provide further clues about monetary policy. Data from Hong Kong’s?Census and Statistics Department revealed on Monday that China's net imports of gold via Hong Kong had more than doubled in the past year, but dropped over 5% compared to?the prior month. Silver spot rose by 1.3%, to $58.92 an ounce. Platinum gained 2.3%, to $1625.31, while palladium increased 3.4%, to $1285.79. (Reporting from Noel John, Bengaluru. Editing by Tasim Zaid)
Oil and Treasury yields fall on Iran-US pause
Oil prices fell and Treasury yields declined on Monday after U.S.-Iran paused their strikes over the weekend, stopping two weeks of attacks. This news raised hopes of a diplomatic resolution that would deescalate conflict and allow shipping through the Strait of Hormuz to resume. Investors were cautious as tensions continued to rise. Saudi Arabia, Jordan, and Iraq all reported drone strikes on Monday as Tehran seemed to be testing President Donald Trump's new strategic U-turn.
Jay Hatfield is the chief executive officer and chief investment office at Infrastructure Capital Advisors, a New York-based firm.
We were of the opinion that Iran would not come to an agreement on a long term basis, but we thought they'd kick the can to the side. We might see a few more can-kickings.
Investors are also avoiding the market this week because of central bank interest rate decisions, and earnings from key tech companies.
U.S. crude dropped 7.51%, to $82.56 per barrel. Brent fell to $88.90 a barrel, down by 8.14% for the day.
The yield on the benchmark U.S. 10 year notes dropped 3.23 basis points from 4.679% to 4.647% late Friday.
The Dow Jones Industrial Average, the largest U.S. stock market index, was the best performer, with a gain of 89.22 points or 0.17% to 52,036.47. Meanwhile, the S&P 500 dropped 22.25 points or 0.30% to 7,389.76, and the Nasdaq Composite lost 147.31 or 0.59% to 24,828.52.
The pan-European STOXX 600 Index?rose by 0.02% while Europe's FTSEurofirst 300 Index fell by 1.11 points or 0.04%.
CENTRAL BANKS IN FOCUS
When its two-day meeting ends on Wednesday, the U.S. Federal Reserve will likely hold rates at their current level. However, traders do see a chance of a rate hike.
The expectations of the Fed have been thrown into a tizzy after recent increases in oil prices reignited fears about inflation. Fed Chairman Kevin Warsh’s preference for less guidance adds to the uncertainty about whether the central banks will raise rates.
Fed funds futures traders currently price in 38% odds that a hike will occur on Wednesday, and 83% of an increase occurring by September.
Bank of England announces its policy on Thursday. Bank of Japan follows on Friday. Both are expected keep rates unchanged while highlighting the continued caution regarding inflation risks.
The dollar dropped 0.09% versus the yen to 163.69. Gold prices rose 0.57% on the commodity markets to $4,075.74 per ounce.
Companies Report Earnings in Waves
Investors will also be watching the earnings of S&P 500 companies, as approximately one-third are due to report their results this week.
The results of "Magnificent 7" members Microsoft.com, Amazon.com Meta, and Apple are seen as an important test for the AI industry.
The negative cash-flow reports of Alphabet and Tesla from last week added concerns about debt-fueled spending by corporations, while the strong stock market debut of Chinese?chipmaker CXMT signaled a?intensifying competitive environment for the U.S. Semiconductor Industry.
This is a big week. This week could decide whether hyperscalers outperform semiconductors and memory for the rest of the year," Thomas Hayes said, chairman at Great Hill Capital.
The week's data highlights include an advance reading of the U.S. second-quarter GDP. Weekly jobless claims data, the PCE price index for June, personal income and expenditure data, the second quarter employment cost index and the Michigan consumer sentiment study round out the calendar.
Data released on Monday shows that orders for U.S. manufactured capital goods rose strongly in June, while shipments grew by 'the most in four-and-a half years' as businesses increased spending on artificial intelligence. This suggests the economy maintained an accelerated pace of growth in the second.
The data schedule for the Eurozone includes the flash second-quarter GDP figures, July consumer sentiment and economic sentiment, as well as the flash inflation and June unemployment numbers.
Ifo Institute survey released on Monday revealed that German business morale was higher than expected in the month of July. This is due to significantly higher expectations. Reporting by Karen Brettell, Additional reporting by Sruthi Shakar, Chuck Mikolajczak Johann M Cherian Ragini Mathur Florence Tan and Trixie YAP; Editing and proofreading by Joe Bavier, Aurora Ellis and Joe Bavier
(source: Reuters)