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Gold prices drop on inflation worries fueled by oil; gold markets watch Trump-Xi talks
Gold?fell on Friday to a lower level than one week ago and?was destined for a weekly drop as rising energy prices fueled inflation fears and extended higher interest rates. Investors were focused on the meeting of U.S. president Donald Trump with Chinese president Xi Jinping. By?0205 GMT the spot gold price was down by 0.8% to $4,613.19 an ounce, its lowest since May 6. Bullion is down 2.1% this week. U.S. gold futures for June delivery fell 1.4% to $4 619. Dollar has gained more than 1% this week. This makes greenback priced bullion costly for holders of currencies other than the dollar. Tim Waterer is the chief market analyst for KCM Trade. He said that "gold has been hit on all sides. Rising oil prices have brought inflation to the forefront and pushed yields up, making the dollar stronger. The yellow metal has become the unfortunate victim of a renewed scepticism about rate cuts in the market." The yields on the benchmark 10-year U.S. Treasury note rose to an almost one-year high. This increased the opportunity costs of gold. Brent crude oil prices rose 5.5% in the past week and hovered above $106 per barrel as the Iran War drags on. This has kept the Strait of Hormuz, which is a key shipping route, largely closed. Since the U.S. - Iran conflict began late in February, gold has dropped about 13%. This is due to the rising energy prices which have raised inflation fears and the possibility of higher U.S. rates. This week, a series of inflation reports showed that the risk was high that rising energy costs would spread to other goods and service. Gold is often seen as a?hedging against inflation. However, the high interest rates can weigh down on this non-yielding asset. Trump and Xi Jinping will meet in the evening to conclude a two-day visit to China that included a lot of pomp and business, but also a warning by Xi about the potential for a spiraling relationship if the Taiwan issue is not handled correctly. Silver spot fell by 3.1%, to $80.93, platinum dropped 1.7%, to $2,021.75, while palladium fell 0.9% to $1,423.75. (Reporting and editing by Rashmi aich in Bengaluru)
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Australian shares rise on the back of tech and banks, but a weekly drop is looming
Australian shares rose on Friday as banks and 'tech stocks' gained, but remained on course for a weekly loss, with gains limited by miners - and investor focus on the upcoming Beijing summit between U.S. President Trump and his Chinese equivalent, Xi Jinping. S&P/ASX 200 rose 0.5% by 0044 GMT to 8,681.6. The benchmark index, which fell 0.1% on Friday, is on course for a loss of 1.3% on a weekly basis. Financials rose 1.9% on Friday, continuing its gains for a second consecutive day. However, it was set to have its worst week ever since mid-November after losing 3.6%. This sub-index suffered from the Federal Budget this week, which dampened sentiment about mortgage growth - an important profit driver for banks. Commonwealth Bank of Australia, the top lender in Australia, rose by over 3% on April 8th. This is its largest % gain for a single day since April 8. The rest of the four "Big" banks traded in green. Investors will also be watching the talks between Australia's major trading partners who met on Friday to conclude a two-day visit. The benchmark index gained 4% more after tech stocks. The sub-index followed its Wall Street peers, who gained on the tech rally. Copper prices fell, but iron ore prices were unchanged. The heavyweight index was about to have its worst day for over two weeks but was also on track to post a weekly increase of over 2%. Rio Tinto and BHP, the two biggest players, have both fallen from record highs. They fell by 1.9% and 1,4% respectively. Gold stocks fell 1.5%, as bullion price declined. The benchmark S&P/NZX 50 Index in New Zealand was down by 0.1% at 13,015.89.
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Bloomberg News: US Trade Representative Greer says that chip export controls are not a major issue in China's talks with the US.
U.S. trade representative Jamieson Greer said in an interview with Bloomberg TV on Friday that U.S. controls on exports of semiconductor chips were not a main topic during discussions between Chinese officials and U.S. officials. These comments indicate that a breakthrough in selling Nvidia’s advanced H200 chip to China is still far off, despite Nvidia CEO Jensen Huang’s last-minute invite to U.S. president Donald Trump's Beijing visit this week. This was not the main topic of discussion during the bilateral meeting. We didn't discuss?chip export control at the meeting," Greer stated, adding that between "15 and 17" U.S. Chief Executive Officers were present at Thursday's summit between Trump and Xi Jinping. Reports claim that the U.S. has cleared 10 Chinese companies, including Alibaba Tencent, and Bytedance to purchase?H200s. However, not a single H200 has been delivered. The Trump administration approved exports of H200s to China in December, and added additional conditions in January. Greer said that China's decision to allow the import of H200 would be "sovereign?decision". "They're fluid, right? They change with time. "It depends on the threats that you perceive, what is commercially available around the world, and what Chinese technology can do," Greer said. "You want to strike a balance in terms of national security and protecting high-tech, while also ensuring that we benefit from overseas markets." These are the types of factors that were considered when deciding whether or not the Chinese would buy the H200. Chinese AI firms like DeepSeek are increasingly claiming their reliance upon domestic chips. However, U.S. curbs on chip production continue to stifle Beijing's efforts to achieve self-sufficiency at a time when domestic fabs struggle to increase output. In recent months, computing power shortages forced many Chinese AI models to restrict user access. However, Chinese policymakers worry about the deepening dependence on U.S. chip suppliers. They view this as a vulnerability in their supply chain. Former Biden administration officials and hawkish U.S. legislators have claimed that China could catch up to the U.S. on frontier AI by selling "advanced AI" chips. This would also advance China's militaristic ambitions. "They make their own decisions." Greer said that they were "very committed" to?domestic?production. They often view U.S. high-tech as a threat because, if we are ahead of the curve like we are with AI chips on some occasions, they may feel that this can hinder their own growth.
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Oil prices rise as fears persist of attacks on ships and seizure
Oil prices increased 'Friday, as concerns over ship attacks and seizures persisted despite Iran claiming that 30 vessels passed through the Strait of Hormuz. Meanwhile, the U.S. presidents will be meeting with the Chinese counterparts for a second round of talks on Saturday in Beijing. Brent crude oil futures rose by 60 cents or 0.57% to $106.32 a barge at 0100 GMT. U.S. West Texas intermediate futures gained 54 cents or 0.53% to $101.71. On Thursday, a ship reported to be seized by Iranians off the United Arab Emirates 'and heading for Iranian waters' was reported. Meanwhile, the White House stated that U.S. president Donald Trump and Chinese president Xi Jinping agreed on the necessity of keeping the Strait?Hormuz open. A cargo ship carrying livestock from Africa to the United Arab Emirates was also sunk in the waters near the coast of Oman on Wednesday. Iran's Revolutionary Guards reported 30 vessels have crossed the Strait of Hormuz from Wednesday evening. This is still far below the 140 vessels that would normally cross the Strait of Hormuz daily before the War, but it would be a significant increase, if confirmed. Yang An, an analyst at Haitong Futures said that the main driver for oil prices is still tight supply. He said that the oil prices fluctuated several times yesterday, but closed at or near their day's highest price. "Ships passing through the Strait eased some concerns about the market, but not enough to alter the strong trend that is driven by tight supply." Trump and Xi will meet?on a Friday, to conclude a two-day visit. In an interview with Bloomberg, U.S. trade representative Jamieson Greer stated that China is being "very pragmatic" about its involvement with Iran and it was important for China to keep the Strait of Hormuz opened. Reporting by Sam Li in Beijing and Lewis Jackson; editing by Jamie Freed
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Chile appoints new chairman for copper miner Codelco amid concerns over production and debt
The Chilean government appointed Bernardo Fontaine as the new chairman of state-run Codelco on Thursday, replacing?Maximo Pacheco. Fontaine is an economist and executive who will play a key leadership role in the newly inaugurated administration of President Jose 'Antonio' Kast, which has been critical about the miner's debts, budget overruns, and production problems. Luz Granier, Alejandro Canut and Josefina Montenegro were also appointed by the government to replace Josefina Wood and Alejandra Montenegro. Fontaine will take up his new position on May 26th, when Pacheco's four-year term ends. Kast appointed Mining Minister Daniel Mas to the board. He said that these new members would be given a "special mission" to conduct an investigation, and to perform an external audit, to resolve recent production problems. In a press release, he stated that "given the most recent preliminary information which has been revealed, our position is clear: We will launch an investigation and take, of course, all necessary actions to clarify information." He did not say what the investigation will cover. In March, industry insiders questioned whether Codelco's production surge of December 2025 was fully refined copper. Diario Financiero, a Chilean newspaper, reported this week that a preliminary audit revealed that nearly 20,000 tons of copper had been incorrectly included in the 2025 production report. Codelco, when asked about the issue,?said?that a?internal audit of its Chuquicamata Division's production for 2025 was still in progress. It would be unwise to draw any conclusions while the process is ongoing. Mas said that Codelco’s newly constituted board would also need to do a thorough financial review after budget overruns. He will also?push? for rigorous financial management. After hitting record lows between 2022-2023, Codelco has been trying to recover its own production levels in order to reach its target of 1.7 millions tons by 2030. (Reporting from Daina Beth Solon, Natalia Ramos, and Kyry Madry)
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Iraq seeks financial assistance from IMF and World Bank in response to Iran war
Iraqi officials have approached the International Monetary Fund (IMF) to secure financial assistance due to?the Middle East conflict, said a source with the IMF as well as an Iraqi official on Thursday. Sources close to the IMF say that initial discussions took place at the spring meetings of IMF and World Bank last month in Washington. Discussions are continuing about the amount of funding Iraq will need and the structure of any loan. Iraqi officials who advise on financial policy have said that Iraq has begun preliminary talks with the IMF and World Bank about a loan for the country's finances, due to a severe revenue shortfall brought on by the halting of oil exports after the?Iran war and the closing of the Strait of Hormuz. Officials said that the talks would be completed once a new government is in place. The massive U.S. and Israeli bombing campaign that began on 28 February against?Iran triggered Tehran’s closure of the Strait of Hormuz. Iraq was hard-hit by the war. Its oil exports, which represented nearly all of the government's income, were cut off due to the closing of the crucial waterway that previously carried around one-fifth the world's crude oils. IMF spokesperson Julie Kozack stated that the IMF worked with the World Bank and International Energy Agency in order to assess the impact the war had on the member countries. She added that the Fund had also been in discussions with its members, some of whom sought policy advice. She said that IMF Director Kristalina Georgieva stated the 'IMF can see demand from 12 countries of $20 billion to $50 million, but refused to provide any details as to which countries have'requested assistance. The World Bank stated that it does not usually comment on shareholder discussion prior to board approval. Iraq is the fifth largest petroleum producer in the world, and its economy is heavily dependent on oil exports. Iraq's latest financial deal with the IMF was an $3.8 billion standby arrangement that expired in July 2019. Of this amount, $1.49 billion had been drawn according to the IMF website. The website shows that Iraq owes $2.39 billion to the global lender, including $891 million under a rapid funding instrument. Reporting by Andrea Shalal, Washington, and Muayad Hamed Suadi, Baghdad. Editing by Louise Heavens and Chizu Nomiyama, and William Maclean.
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Cuban government reports that CIA director met with top officials at Havana
The Cuban government released a statement saying that a U.S. delegation led by CIA Director John Ratcliffe had met his counterpart in Cuba's Interior Ministry on Thursday. Tensions are rising over a U.S. blockade of fuel, which has deprived the island of power and fuel. Since returning to office in the United States, Donald Trump has put pressure on Cuba. He said a few days ago that both long-time enemies were "going to talk." Cuban representatives at the meeting stressed that Cuba did not pose a danger to the national security of the United States, according to the Cuban government. The statement stated that "Both sides stressed their interest in developing bilateral cooperation between law-enforcement agencies in the interests of security for both countries as well as regional security and international security." The U.S. delegation did not mention the names of the Cuban officials that met with them. A witness reported that a U.S. Government plane had been seen leaving Havana’s international airport on Thursday afternoon. The White House didn't immediately respond to an inquiry for comment. Trump has threatened that Cuba is "next" after U.S. troops captured Nicolas Maduro in January, the president of Venezuela's?longtime ally Cuba. Both countries admitted earlier this year that they were in negotiations, but the?negotiations seemed to stall amid the ongoing U.S.?fuel?blockade. On Wednesday night, Havana was awash with protests as rolling blackouts lasted for 24 hours in some parts of the city. This threatened to spoil frozen food supplies and made sleep nearly impossible for residents. (Reporting and editing by Christian Plumb, Sanjeev Mglani and Daina Beth Sola; Additional reporting and editing by Jonathan Landay & Simon Lewis; Reporting and Editing by Dave Sherwood)
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As markets wait for signals from Trump-Xi, gold falls as oil and dollar rise
Gold prices fell on Thursday as a result of rising 'oil' prices and a 'firmer dollar. This was after news broke about a sunk vessel and a snatched vessel. Investors are also looking forward to the meeting between U.S. president Donald Trump and Chinese president Xi Jinping. At 2:48 pm EDT (1848 GMT), spot gold was down by 0.4%. U.S. Gold Futures for June Delivery settled at $4,685.30, down 0.4%. The U.S. Dollar was up 0.3% making greenback-priced gold more expensive for holders other currencies. News of the sinking and seizure off the coasts of the United Arab Emirates of a ship that was headed for Iranian waters boosted oil prices. Prices had dropped earlier, after Iran's official media reported that Chinese ships had crossed the Strait of Hormuz. "What happened in the Strait today underpins oil and continues to stoke expectations of higher Fed rates for longer." It's no surprise that a stronger dollar is being seen today, especially with the hot inflation data from this week. CME Group's FedWatch tool says that the prospects of a rate cut in the United States have faded. This is due to a sharp rise in U.S. consumer and producer prices, primarily driven by energy. Bart Melek is the global head of commodity strategies at TD Securities. He said that there is a risk of a major downturn in gold if the Middle East conflict does not end. He added that energy product inventories could become constrained, leading to higher prices and inflation. Gold is often considered to be a hedge against rising inflation. However, as interest rates rise, it tends to have a negative impact on the metal. Xi also told Trump on Thursday that the trade talks were?making progress,' but warned that disagreements over Taiwan might cause a rupture in relations. However, the U.S. summary made no mention of Taiwan. The Indian government announced that it would limit the import of gold to a maximum of?100 kilograms under its scheme for advance authorization. Silver spot fell by 4.1%, to $84.36 an ounce. Platinum dropped 3.3%, to $2,066.75, while palladium was down by 3.5%, to $1,447.73. (Reporting by Ishaan Arora in Bengaluru; Editing by Paul Simao, Nick Zieminski, Diti Pujara and Aurora Ellis)
Japan's wholesale price inflation surges due to energy shocks, which supports the case for a rate hike in June
Data released on Friday showed that Japan's wholesale price inflation increased at its fastest rate in three years in April, as the Iran War pushed up the prices of oil and chemical products. This bolsters the case for a June interest rate hike by the central bank.
Data was released after a Bank of Japan policymaker called on the BOJ to raise rates "at the soonest stage possible", as rising fuel prices from the Middle East conflict stoked the price pressures.
BOJ data released on Friday showed that the corporate goods price index, which'measures the prices companies charge one another for their goods and service,' rose by 4.9% from a year ago in April. This was the highest annual rise since?May 20,23.
The gauge exceeded median market expectations with a 3.0% increase, and increased sharply from the 2.9% increase in March.
Masato Koike is a senior economist at Sompo Institute Plus.
If the BOJ does not have to act if price increases are limited to oil-related products, then there is no need to do so. If they spread to other goods, then the BOJ may have to increase rates," he added.
The yen-based index of import prices jumped 17.5% from a year ago in April, the highest increase since December 2022. This is a sign that the currency's depreciation was contributing to the energy crisis by increasing corporate costs.
Wholesale prices rose 2.3% in April, after an increase of 1.0% in March.
Data showed that prices were rising due to the closure of the Strait of Hormuz. This is affecting oil supply for an economy that heavily relies on Middle East imports.
The data revealed that the price of petroleum and coal goods rose by 5.3% in April compared to a year ago, mainly due to higher costs for jet fuel and crude oil.
The price of chemical goods increased by 9.2% in September, which is the highest rate since September 2022. Naphtha prices soared 79.4%.
(source: Reuters)