Latest News
-
Gold continues to decline due to expectations of higher interest rate
The gold price continued to fall on Tuesday due to persistent Middle East tensions, which fueled fears of inflation and higher interest rates around the world. By 2:11 pm, spot gold had fallen 0.4% to $4389.26 an ounce. ET (1811 GMT), after reaching its lowest level since November on Monday. U.S. gold futures for April delivery settled 0.1% lower at $4,402.00. Bart Melek is global head of commodity strategies at TD Securities. He said: "If energy prices continue to rise and the war continues, then it's bad news for gold." He added, "Gold will be under pressure in the second quarter but by the end of the year, I think the outlook for gold should look good again, because we hope that central banks, like the Fed, will have more freedom by then and we can'see the dollar ease off and rates fall." Bullion is no longer a good inflation hedge or a safe place to store money in a high rate environment. The Pakistani prime minister stated on Tuesday that he would be willing to host talks to end the war between the U.S. The war has effectively stopped shipments of about a fifth of the world's oil and natural gas liquefied through the Strait of Hormuz. This has pushed up energy prices, and increased inflation fears. The major central banks have also stated that they are prepared to take action if prices rise due to the war. "The recent price drop is likely to be as much an overreaction, as the massive increase at the beginning of the year. The pendulum for gold has moved from one extreme to the next, according to analysts at Commerzbank. Spot gold has fallen by nearly 17% from its peak on January 29, when it was $5,594.82 and is down 21% since the U.S./Israeli war against Iran began. Silver spot rose 0.4%, to $69.43. Platinum gained 1%, to $1.900.13. Palladium fell 2.1%, to $1.403.75. (Reporting and editing by Sahal Muhammad, Diti Pjara and Maju Sam in Bengaluru)
-
Sheriff's Office: No evidence Valero Texas refinery explosion caused by intentional act
The spokesperson for the Jefferson County Sheriff's office said on Tuesday that no 'evidence' has been found to indicate a deliberate act as the cause of the explosion which occurred at Valero Energy Corp's Port Arthur refinery in Texas. Donta Miller is the chief deputy of?the sheriff’s office. On Monday night, 'people familiar with the plant operations' said that they could feel an explosion from a diesel-hydrotreater 11 miles away (18 km). Valero closed down the refinery in order to prevent the fire from being fueled by hydrogen or hydrocarbons. Hydrotreaters remove sulfur from motor fuels using hydrogen in accordance with U.S. Environmental Rules. Valero said on Tuesday that no injuries were reported and that all personnel had been accounted for. The refinery can be found 86 miles (139km) east of Houston. Messages started appearing?in forums online on Monday night, and continued into?Tuesday. They suggested that the explosion 'at the refinery? was a retaliation?for the U.S./Israeli attacks against Iran. (Reporting and editing by Franklin Paul, Nick Zieminski, and Erwin Seba)
-
Maria Corina Machado, Venezuela's opposition leader, calls for transparency and security in energy investments
Maria Corina Machado, Venezuela opposition leader, believes that early interest in Venezuela's oil industry is positive. However she has called for greater transparency and contract security. She said in an interview, before her afternoon address at the CERAWeek conference in Houston: "I am here to draw attention to Venezuela and not to delay it." Machado stated that the country could produce up to 5 million barrels a day with an investment of $150 billion. The country currently produces around 1 million barrels of oil a day. She believes that Venezuela's PDVSA, the state-run oil company, will eventually be reduced in size and then transferred to the private sector. Citgo Petroleum, a Houston-based refiner owned by PDVSA, is something she would like to keep in Venezuela as a "strategic asset". Losing Citgo to Venezuela would be detrimental and a mistake for the U.S. "energy security," she said. Machado said, "Until the?last out, in?the final inning, there is a possibility," referring to court proceedings to sell Citgo's parent to creditors. (Reporting and editing by Nathan Crooks, in Houston.)
-
Zimbabwe Central Bank tightens policy to limit fuel price increases
Zimbabwe's central banks decided on Tuesday to maintain a?tight?monetary policy?stance, keeping its main lending rate of 35% in order to limit the inflationary effect of fuel prices increases due to the Middle East conflict. In recent months, the annual inflation rate in Southern?Africa has dropped to single digits - for the first time in more than three decades. The central bank was expected to ease its policy soon after the U.S. and Israel war against 'Iran. But now, economists believe it will try to maintain stability following the recent fuel price increases by the energy'regulator. In a press release, it stated that "to limit the second-round effect of fuel price increases...the MPC (Monetary Policy Committee) decided to 'Stay The Course'?of the current monetary policy position." Since September 2024, the bank's policy rate is at?35%. This is part of an effort to?reduce price pressures and boost confidence in a new currency that was launched two years earlier.
-
Oil prices are higher, but stocks remain mixed as the war uncertainty continues
The major global stock indexes were mixed Tuesday as oil prices continued their recent sharp gains and concerns remained over the length of 'the Israeli-U.S. War on Iran. The dollar recovered lost ground and U.S. Treasury rates pushed higher. The stock market rose on Monday, after U.S. president Donald Trump announced that he had ordered his military to delay strikes against Iranian nuclear power plants due to "productive discussions" with Tehran. Iran has denied any talks with the United States. Prices of oil rose on Tuesday. U.S. crude oil gained 3.63%, reaching $91.33 per barrel. Brent increased to $98.54. Oil prices are expected to remain high as the Strait of Hormuz is closed and only a fifth of the world’s oil and gas liquefied through it can be shipped. Oliver Pursche is senior vice president at Wealthspire Advisors. He said, "We're seeing some negative sentiment creeping back into the markets today." Investors are mainly focused on oil price, but I think the greater risk is commodity inflation, especially related to agriculture. That could have a?more profound and longer-term effect than oil prices. He also said that "there is still a great deal of confusion and lack clarity regarding Iran, how long military operations will last, and what the implications are for oil and the global trade." This is the main driver." The S&P 500's largest percentage decliners were communication services and technology. The Dow Jones Industrial Average grew 145.83, or 0.30 %, to 46.348.12, the S&P 500 gained 5.77, or 0.09 %, to 6,586.74, and the Nasdaq Composite dropped 70.12, or 0.32% to 21,877.14. The MSCI index of global stocks rose by 4.46 points or 0.45% to 989.37. The pan-European STOXX?600 index grew by 0.54%. Data released on Tuesday showed that the euro zone's private sector growth almost stalled in this month due to a rise in inflation expectations and delivery times. This is a further indication of the tangible impact the war between the U.S., Israel, and Iran has had on the region. He said that the risk of inflation from the war in Iran escalating was "strong enough" to convince him to support keeping interest rates at current levels instead of cutting them. Market expectations were shifting towards a rise in borrowing costs. The yield on the benchmark 10-year U.S. notes increased 3.4 basis points from 4.34% to 4.37%.
-
Smithfield Foods reports record quarterly earnings, but flags Middle East cost pressures
Smithfield Foods beat analysts' estimates for the fourth quarter results on Tuesday, thanks to strong?demand. It also said that the Middle East conflict will?raise fuel, corn, and packaging costs. Shares of the?U.S. Pork processors jumped by 5% on the morning market after issuing a positive annual profit and sales forecast. Mark Hall, CFO of the company, said that while input costs are expected to remain high by historical standards they will be lower in 2025. The company has increased prices to offset the rising costs of raw materials. It has also seen an increase in demand as more consumers cook at home due to tighter budgets. Smithfield anticipates that total annual sales will increase by low single-digits compared to analysts' expectations of 1.26%. It also expects an annual adjusted operating income between $1,33 billion and $1.4 billion, compared to the $1.34 billion profit recorded in fiscal year 2025. The outlook takes into account several risks. These include the Middle East conflict which could increase the cost of fuel, petroleum-based products such as packaging and corn prices, as well as raising oil markets. They cautioned, however, that the full impact has yet to be determined. LSEG data shows that the company's quarterly sales increased 7%, to $4.23bn, compared to analysts' expectations of $4.14bn, a result of higher market prices. The packaged?meat?sales?rose by 4.3% from the same quarter last year. Smithfield's major revenue-generating division is this segment. Fresh pork sales increased by 2.1%. The Virginia-based firm?said that it expects pork to "well positioned" as an affordable, healthy option for consumers this year. Analysts had expected 68 cents a share. The company reported a quarterly adjusted 'profit from continuing operations' of 83 cents a share.
-
US to launch pilot surveys on energy consumption by data centers
The U.S. Department of Energy’s information arm will launch a pilot survey on Wednesday to gauge the energy consumption of 'the country's' data centers. Silicon Valley has invested hundreds of billions in expanding energy-intensive data centres across the U.S. but it is unclear how much power the sector consumes. Americans are worried about the impact of artificial intelligence on their utility bills. Tech giants have been exploring using coal, natural gas and nuclear power to power their data centres. Tristan Abbey, the head of the Energy Information Administration (EIA), said this at the CERAWeek Conference in Houston. EIA will start the surveys in three States before expanding them to other states. Virginia, which has the largest concentration of data centres in the world, is among the three states. Washington State and Texas are also included. Abbey said that the initial survey questions will cover whether or not data centers use backup power supplies and, if they do, what type of fuels are used. Abbey explained that "ultimately we will have a patchwork quilt of?lots?of different things we know and be able launch a mainstay type survey." The EIA began a survey in?2024 of cryptocurrency mining operations. These are a new type of datacenter, and were surveyed using emergency authorities. Two crypto-mining firms sued, claiming the survey was invasive and rushed. Abbey, who assumed her position in September of last year, explained that this pilot survey would be conducted gradually. (Reporting and editing by David Gaffen in New York, Laila Kearney from New York)
-
Investors focus on Middle East developments as gold prices remain stable
The price of gold held steady Tuesday, after hitting a four-month low the previous session. Markets assessed developments in 'the Middle East' and their impact on inflation and interest rates. By 11:00 a.m., spot gold had not changed much from $4,408.77 an ounce. ET (1500 GMT) after it hit its lowest level of $4,097.99 in November on Monday. U.S. gold futures for April delivery steadied at $4,409.30. Bart Melek is global head of commodity strategies at TD Securities. He said: "If energy prices continue to rise and the war continues, it's not good news for gold." He added, "Gold is going to be under pressure in the second quarter. But I think that by the end of the year, gold's outlook should look very good, because we hope by then, central banks such as the Fed will enjoy more freedom and we may see rates and the dollar drop." Bullion, once considered "a safe haven" and an inflation hedge, is no longer attractive in high-rate environments, as it pays no interest. The Pakistani prime minister stated on Tuesday that he would be willing to host talks to end the war between the United States, Iran and other countries. This comes a day after U.S. president Donald Trump backed off his threats to attack Iranian power plants in the wake of what he termed "productive" discussions. The war 'effectively halted the shipments of around a fifth of world oil and natural gas through Strait of Hormuz. This has increased energy prices and fuelled inflation fears. The major central banks have also stated that they are prepared to take action if prices rise a lot more due to the war. The recent price drop is just as likely to be an overreaction, as was the massive increase at the start of this year. The pendulum for gold has "swung" from extremes, according to analysts at Commerzbank. Spot gold has fallen by more than 16% from its peak of $5,594.82 on January 29, and is down about 21% since the U.S. - Israeli war against Iran began on February 28, Silver spot rose by 1.1%, to $69.86. Platinum gained 0.7%, to $1.894.60, while palladium fell 1.3%, to $1.414.75. (Reporting and editing by Sahal Muhammad and Diti Pjara in Bengaluru)
QUOTES - Asia stock crash deepens, as markets prepare for energy shock
Investors sold their chips on Wednesday as they feared that the Middle East conflict would cause an oil shock, which could fuel inflation and delay interest rate cuts.
The broadest MSCI index of Asia-Pacific stocks outside Japan dropped 4.2%. Seoul's KOSPI index fell more than 11%, triggering a circuit break. Japan's Nikkei Index and Taiwan's index both dropped more than 4 percent each.
Analysts' comments:
COMMENTS:
CHARU CHANANA CHIEF INVESTMENT STRATEGIST SAXO SINGAPORE
"Asia’s selloff has become disorderly, because markets are no longer treating it as a one-week headline shock. The current?pricing reflects the fact that this conflict could continue, and spillover risks are increasing rather than decreasing.
"The inflation channel is biting more. The market doesn't only reprice geopolitics, but also energy logistics, security premiums, and long-lasting inflation pressure. This is a more difficult backdrop for risk assets compared to a simple growth fear.
"Policy offsets are less credible when they're implemented in reality. Talk of escorting vessels or lowering energy costs does not solve the core problem if the transit of the Hormuz is in dispute and energy infrastructure is in danger.
"The'sell whatever you can' phase has spread: liquidity requirements are pulling precious metals down, which is less of a clean rotation than it is de-leveraging and margin driven selling across asset categories.
KENNETH GOH, DIRECTOR, PRIVATE WEALTH, UOB KAY HIAN SINGAPORE
"Uncertainty is driving this." Investors believe there is no endgame and, more importantly, there is no plan visible for an endgame. This is what has markets more uneasy than tariffs.
This is a very different situation from the global financial crises, when investors were running for the exits at all costs and holding as much cash as they could. We're now seeing a more deliberate shift in asset allocation towards cash and safe-haven assets.
Within that rotation, "some market participants also position in gold and look at commodities as a hedging."
TONY SYCAMORE MARKET ANALYST IG SYDNEY
"We are seeing portfolios de-risked... I feel that the Middle East is moving in a more uncertain way... It's now looking like a good moment to put money on the sidelines."
"At the beginning of the week, there was a sense, I believe, that this was going to be a short conflict.
"The pessimistic view, which is resonating stronger now, is that this could last for weeks, months or even years."
FRANCIS TAN CHIEF ASIA STRATEGIST INDOSUEZ MANAGEMENT SINGAPORE
The market is adjusting now to what if the conflict is going to last a little longer. The beta shock will be greater for those indexes with a high beta.
"(Clients) have asked about the impact on China." "People have asked, because China imports oil, how these things will impact, and translate towards the overall growth of the economy."
HIROYUKI UENO IS THE CHIEF STRATEGIST OF SUMITOMO MISTI TRUST ASSET MANAGEMENT IN TOKYO.
"Today's loss has erased the Nikkei gain since Prime Minister Sanae Takaichi won the national elections in early February by a wide margin.
Investors who purchased Japanese stocks following the election likely sold the shares during the recent selloffs.
"The Nikkei will be aiming for a low of 52,000 by the end of January, when Takaichi declared the snap elections. I see 52,000 as the Nikkei's defence line. Once it drops below that level, the index could 'keep falling.
CHRISTOPHER FORBES, DIRECTOR OF ASIA AND THE MIDDLE EAST AT CMC MARKETS
The KOSPI's two-day 15% collapse is a textbook example of momentum, and not a structural breakdown ....?when U.S. - Israeli operations virtually closed the Strait of?Hormuz there were no diversified offers to absorb the sales.
The order book disappeared. In just two sessions, foreign investors drew in $7 billion. The record hedge fund short book is the biggest catalyst for upside. Goldman Prime brokerage reported that shorts outnumbered longs by two to one in early February.
If tensions are eased quickly, then a violent squeeze may follow. Samsung and SK Hynix are healthy businesses.
RUPAL AGARWAL ASIA QUANT STRATEGIST, BERNSTEIN SINGAPORE
The impact on Asian markets was greater because Asian economies were more vulnerable to the Strait of Hormuz closing and because momentum trends in many parts of Asia, such as Korea, were very strong in the lead-up to war.
For markets to find a bottom, we need to see signs of de-escalation or a status quo. This could then shift the focus to fundamentals.
RADHIKA ROA, SENIOR ECONOMIST,?DBS BANK SINGAPORE
The ASEAN-6 countries' net oil trade balance (as a percentage of GDP) is most negative in Thailand, Malaysia and Vietnam, with price pressures being most significant in Thailand and the Philippines.
"Thailand and Singapore, although less strategically important, are the top LNG buyers in this region. However, they have a well-balanced supplier mix in Singapore, in particular.
"Much the region will likely be watching developments in the Middle East closely with fear." The regional central banks will not act in advance on policy and prefer to stay on hold." Reporting by Rae Wee in Singapore, Tom Westbrook in Tokyo, Roushni Nai in Bengaluru, and Kate Mayberry in London.
(source: Reuters)