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As markets wait for Trump's decision on Iran, gold falls on stronger dollar and oil
As investors waited for Donald Trump's announcement on the proposed agreement to extend the ceasefire, gold?moved lower on Monday. As of 0520 GMT spot gold was down by 0.3%, at $4,521.25 an ounce. This is after it hit a two-week peak in the previous session. U.S. Gold Futures for August Delivery fell by 0.9% to $4.551.60. Dollar rose, making bullion priced in greenbacks more expensive for holders other currencies. Tim Waterer is the chief market analyst for KCM Trade. He said that the rise in oil prices, coupled with the elusive U.S. Iran deal, was enough to throw gold out of balance at the beginning of the week. Trump announced on Friday that he will soon make a decision on a proposal to extend the ceasefire between the United States and Iran. However, the two countries appear to still be at odds on some'significant' issues which have been central to the conflict. U.S. officials said they had struck Iranian military targets over the weekend. Iran's Revolutionary Guards responded by claiming that it had attacked a U.S.-based base. Benjamin Netanyahu, the Israeli prime minister, ordered his troops to advance further into Lebanon, in order to fight the Iranian-backed Hezbollah militants, despite the ceasefire that was announced over six weeks ago. In early trading Monday, oil prices rose by more than 2%, fueling concerns about inflation and rate hikes. Gold is traditionally seen as a hedge to inflation but in an environment of high interest rates, gold loses its appeal as it's a non-yielding asset. Michelle Bowman, Federal Reserve Vice-Chair for Supervision, said that the impact of the Middle East war on the economy could still be measured but lead to persistent inflation, which might require tighter monetary policies. Waterer stated that "by the end of 2026 gold could still reach $5,500 if favourable circumstances occur, including a decline in oil prices, a depreciation in the dollar and continued central bank buying, as well as its role of geopolitical and an inflation hedge." Silver rose 0.7% per ounce to $75.81, platinum rose 1.5% to $1.945.15, while palladium rose by 1.4% to $1.372.75. (Reporting and editing by Subhranshu sahu, Rashmi aich, and Pablo Sinha from Bengaluru)
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MORNING BID EUROPE - Who needs oil when you can buy AI?
Wayne Cole gives us a look at what the future holds for European and global markets. Investors seem to be deciding that no news is better than bad news in regards to the Gulf peace negotiations. The President had stated that he would be meeting on Friday last week to decide whether to sign off an extension of the ceasefire. Since then, there has been no news, apart from Trump comparing himself to Elvis. Hegseth, the Defence Secretary, did say that if an agreement was not reached on a deal suitable for Iran then the U.S. might restart its attacks. In fact, it was reported on Monday that U.S. troops had attacked Iranian targets during the weekend. Iran claimed to have targeted an airbase used in what they called a U.S. strike, and Kuwaiti defences are reportedly intercepting drone and missile strikes. At the moment, the Strait of Hormuz is still a trickle. Only two tankers were heading outbound from May 30. The daily average pre-war was around 136. Commodity analysts have warned for some time that global oil inventories will be so low by mid-June that shortages could actually occur. The clock is ticking. Brent remains well below $100, despite today's 2.5% increase to $93.40. Who can blame Asian stock markets for being too obsessed with AI? South Korea's main stock index rose 28% in the month of May. Taiwan gained 15%, and Nikkei added 12%. Samsung Electronics' stock rose 10% just on Monday as the company began shipping a?new type of faster chips. South Korea's exports in May were 53% higher than a year ago, at $88 billion. Exports of computers and semiconductors increased by 291%. The?Korean?won is not far from its all-time lows. This suggests that Korea's dollars earnings remain in dollars, and are not converted. Assuming that much of this is held in Treasury paper, the AI boom indirectly helps the U.S. government fund its massive budget deficit. It's all about swings and roundabouts. Nvidia's Jensen Huang will kick off the Computex show in Taipei with a speech about AI on Monday. He is expected to tout the latest products of his company, as well as the massive investment that he plans for Taiwan. Market developments on Monday that may have a significant impact - EU unemployment in April, EU PMIs and German retail sales US ISM Manufacturing Survey for May, US PMI
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Hitachi Energy India aims to grab a bigger share of the data centre boom by implementing a 'grid to rack' approach
Venu Nuguri, CEO and Managing Director of Hitachi Energy India, said that the company plans to capture 30% of the data center industry's overall spending, up from its previous goal of 10-15%. This is by providing a "grid-to rack"?power? solution. According to consulting firm IMARC Group, India's data center market is expected to grow from $5.55 billion to $13.11 billion between 2025 and 2034. This growth will be driven by digitalization, cloud adoption, and increasing AI workloads. Hitachi Energy India is a subsidiary of Hitachi Energy in Zurich. It manufactures and supplies grid technology and power equipment for a variety of industries, including data centres. It controls approximately half of India's HVDC market and manufactures equipment that transmits large amounts of electricity over long distances. The company had previously estimated that it could reach 10%-15% (or more) of the total data center spending in the country through its equipment and software offerings. Nuguri's "grid to rack" solution, says Nuguri?integrates power infrastructure from grid level connection to server rack distribution. Nuguri stated that the solution would increase the market addressable by the company by 10%-15% more than the total power infrastructure expenditure in the data centre segment. Hitachi Energy India announced this week a 20 billion rupee investment ($210.53 millions) in a large, greenfield power transformer facility located in Gujarat, a western Indian state. This brings the company's cumulative capex up to 40 billion rupees, spread across eight different manufacturing locations and 19 factories. The company ended 2026 with an?order backlog record of 296 billion rupees. Nuguri stated that the firm is "actively looking at" acquisitions to fill in capability gaps. These include data centres, digital layer, power consulting, etc. According to the Ministry of Power, India's peak power demand in May was 270.8 gigawatts, an increase of 68% over 148 GW from 2014. Data showed that demand is expected to almost double by 2032. Nuguri, the CEO of Nuguri, said this was a key factor in its growth. $1 = 95.0000 Indian Rupees (Reporting and editing by Abhinav Paramar in Bengaluru)
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As markets wait for Trump's decision on Iran, gold falls on a stronger dollar and oil
Gold prices fell on Monday, under pressure from a stronger dollar and rising crude oil costs, as investors awaited the decision of U.S. president Donald Trump on an agreement to extend the ceasefire between Iran and Israel. As of 0306 GMT spot gold was down by 0.4%, at $4,518.09 an ounce. This is after it hit a two-week peak in the previous session. U.S. Gold futures for August delivery dropped 1% to $4,48.90. Dollars rose in value, increasing the price of greenback bullion for holders of other currencies. Tim Waterer is the chief market analyst for KCM Trade. He said that the rise in oil prices, coupled with the still elusive U.S.Iran deal was enough to keep gold off-balance at the beginning of the week. Trump said?on Friday that he would decide soon on a proposal to extend the 'ceasefire' with Iran. However, the two countries appeared to still be at odds on important issues which have been the core of the conflict. Benjamin Netanyahu, the Israeli prime minister, ordered his troops to advance further into Lebanon, in order to fight the Iranian-backed Hezbollah militants, despite the ceasefire that was announced over six weeks ago. Early trading on Monday saw oil prices rise by more than 2%, raising concerns about inflation and interest rates. Gold is a traditional hedge against inflation. However, in an environment of high interest rates it loses its appeal as a non yielding asset. Michelle Bowman, Vice-Chairperson for Supervision at the Federal Reserve, said that the Middle East War's impact on economy could lead to persistent inflation, which would require tighter monetary policy. Waterer stated that "by the end of 2026 gold could still reach $5,500 if favorable circumstances occur, including lower oil prices and a decline in the dollar. This would be underpinned by continued central bank buying, and its role as an inflation and geopolitical hedge." Silver spot rose 0.4%, to $75.58 an ounce. Platinum gained 1.1%, to $1.937.30. Palladium increased 1.2%, to $1.370.50. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
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Bangladesh increases fuel prices as global costs bite
Bangladesh has increased retail fuel prices for the second time in six weeks. The increase in kerosene and petrol is a?5 taka per litre. This could lead to an inflationary spiral in this import-dependent country. Petrol will now cost 140 takas ($1.15) a litre, and kerosene 135 takas per litre. Diesel, the most commonly used fuel in the country, remains unchanged at 115 Taka per litre. In a notice, the Energy Ministry stated that the revised rates had been determined in accordance with changes in global petroleum product prices. In 2024, Bangladesh implemented an automatic fuel pricing system. Under this mechanism, domestic fuel prices are adjusted periodically based on the international fuel price, changes in exchange rates, and import costs. The increase comes after a fuel price hike that occurred in April, when the war in Iran pushed up global oil prices and increased the South Asian nation’s import costs. Fuel prices are expected to rise, increasing inflationary pressures on consumers.
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Oil prices rise on Gulf risks as Asia stocks continue AI boom
The Asian share market?firmed up on Monday, as demand for all things AI continued. This was offset by a lack of progress made in Gulf peace talks that tempered optimism about a reopening of the Strait of Hormuz. Oil prices rose. Although Washington and Tehran are working on a deal, Donald Trump has remained silent about their progress. Pete Hegseth, the Defense Secretary, said on Saturday that the U.S. is ready to resume attacks against Iran if no deal can be reached. Israeli advances into Lebanon to fight the Iranian-backed Hezbollah militants did not help ease tensions in the area. Michael Feroli, JPMorgan's head of U.S. Economics, said: "While uncertainty remains, the acute risks phase for the global economic should be over once tankers begin to move again." Oil prices will likely remain high for some time as inventories are rebuilt and supply infrastructure is repaired in the Middle East. Brent crude rose 2.1% to $93.02 per barrel on the back of a lack of news, while U.S. Crude added 2.6% to $89.61. Asian stock markets continue to be supported by semiconductors and AI gear. Japan's Nikkei has risen another 1.1% after gaining almost 5% in the previous week, reaching all-time-highs. South Korea gained 4.4% after a surge of 8% the previous week. Taiwan also rose almost 6%. MSCI's broadest Asia-Pacific share index outside Japan rose 1.6%. Samsung Electronics shares jumped nearly 10% on Monday, adding to gains made on Friday. The company announced that it has started shipping samples of the latest high-bandwidth?memory (HBM) chip to customers. Data showing South Korea's Exports grew at their fastest annual rate in over four decades in the month of May, hitting a record $87.75 Billion. Nvidia's Jensen Huang will kick off the Computex show in Taiwan with a speech on AI on Monday. He is expected to elaborate on the latest product efforts of his company as well as Taiwan's role as a leader in the industry. A survey showed that factory activity in May was at a standstill, causing blue chip stocks to fall by 0.3%. PAYROLLS ARE COMING SOON! In Europe, EUROSTOXX50 futures fell 0.1% while DAX and FTSE futures both remained flat. S&P futures rose 0.3% while Nasdaq Futures firmed up 0.5% following last week's record-breaking gains. The gains are narrowly based, with only 21 of 500 stocks achieving'record highs. Tech stocks rose almost 16% during May. Consumer discretionary, healthcare, and consumer staples all managed to gain less than 2%. Bond markets continue to be hampered by the inflationary pressure from oil. The 10-year yield in the United States has risen 3 basis points, to 4.470%. The markets indicate that the Federal Reserve may have to raise rates by year's end to avoid rising prices being baked into inflationary expectations. This week, a number of Fed members will be speaking. Also of note are the ISM survey on manufacturing and the May payrolls data. The market forecasts a steady increase of 85,000 jobs, which will keep the unemployment rate at 4,3%. Any further increase would reduce the chances of an increase. The dollar has remained relatively stable due to the hawkish outlook of the?market. However, the?Japanese yen and euro have been hampered because they are heavily dependent on energy imports. The dollar was slightly firmer against the yen, at 159.45. However, bulls were hesitant to risk Japanese intervention if the 160.00 barrier was breached. The euro was $1.1645 after spending the last week in a tight range between $1.1585 to $1.1661. Gold was down 0.3$ at $4,523 per ounce on commodity markets. It has found little support either as a safe-haven or to hedge against inflation. (Reporting and editing by Lincoln Feast, Sonali Paul and Wayne Cole)
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Chinese coking coal reaches 19-month supply high
Chinese coking coal rose on Monday, reaching a 19-month high. A provincial-level meeting of mine safety in 'coal-rich Shanxi' reinforced the supply concerns that were stoked following production halts last month at some mines. According to an official WeChat post on Sunday, Shanxi in northern China held a meeting Saturday regarding a special campaign to correct safety risks and hidden hazards in coal mines. Officials in China's largest coal hub have pledged to take a "zero tolerance approach" and to identify and punish all illegal acts, including hidden tunnels, frauds in safety monitoring, and illegal mining outside the allowed area and layers. A fatal mine accident that occurred in late May at the Liushenyu Mine, Shanxi, killed at least 80 people. This triggered a series of mine safety inspections, which led to several mines suspending production, and fueling fears about a shortage of supplies. Analysts at broker Xinhu Futures wrote in a report that the'severity and extent of the accident are especially extensive, leaving little room for a rapid resumption of production in the near future. By 0345 GMT, the most traded coking coal contract at Dalian Commodity Exchange rose 6.65% to $1370.5 yuan (about $202.50) per ton. The contract reached its highest level since 2024, at 1,384 Yuan. The DCE coke contract that was most active jumped?4.55%, to 1,987.5 Yuan per ton. It had previously reached its highest level since?November 8th 2024 (?2,008.5 Yuan). Prices of iron ore fell amid expectations that there would be a glut in supply due to increased shipments and seasonal slow demand. The most active DCE contract fell 0.32% to 780 yuan per ton. Meanwhile, the benchmark July Iron Ore at the Singapore Exchange dropped 0.51% to $104.7 per ton. The Shanghai Futures Exchange steel benchmarks mostly rose. The rebar price rose 0.6%. Hot-rolled coils gained 0.71%, and wire rod climbed by 0.95%. Stainless steel dropped 0.6%. $1 = 6.7678 Chinese Yuan (Reporting and editing by Subhranshu S. Sahu in Beijing, Amy Lv reporting from Shanghai)
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Indonesia pledges transparency in its transition to centralised commodity imports
Indonesia has pledged transparency to the state company that will be its sole exporter of important commodities. The transition period from a decentralised system began on Monday, with coal, ferroalloys, and palm oil. On May 20, President Prabowo announced that Indonesia, a resource-rich country, would centralise the control of its exports through a state company called Danantara Sumberdaya Indonesia, which will be overseen and managed by the sovereign wealth fund Danantara. This policy aims to improve tax revenues through tackling under-invoicing, transfer pricing and ensuring proceeds are kept in the country, especially after the rupiah has hit historic lows several times this year. Dony Oskaria, Danantara’s chief operating officer, said at a press briefing on Sunday that DSI will operate transparently and accountablely. This includes benchmarking?of commodities prices during the transition. Oskaria stated, "We will make sure that this company is run in a transparent manner and everyone can monitor it." Indonesia exports thermal coal, nickel, palm oil, and palm oil worth $65 billion. Danantara said that it would honor long-term contracts, but review prices so they don't fall below market level. Caught off guard: Industry The sudden announcement of this policy caught businesspeople off-guard and pushed the stock market due to fears that profit margins could be squeezed. Rating agencies also warn that the plan may hurt investor confidence. During the transition, exporters are required to report all their export documents to DSI. Otherwise, the government expects shipments to continue as normal. Airlangga stated that the government will evaluate the transition in three months and determine its next steps. However, full implementation of the law is expected to begin at the latest by January 1, 2027. Business?associations have said that they still have questions about the plan. Presidential decrees regarding the export mechanism are yet to be released. Business groups reported that some buyers are concerned about the potential impact of this plan on prices and whether they will need to change third-party suppliers. Business groups said that prices of fresh palm oil?fruit bundles also fell sharply in the face of uncertainty. Purbaya Yudhi Sadewa, Finance Minister of the Republic of South Africa, said at a press conference that investors would see an improvement in company profitability if they were to price their exports more competitively via DSI. Oskaria?said DSI operations would at first be backed up by civil service employees from various ministries. Danantara, however, is developing and hiring the technology to monitor exports. Monday marked the beginning of a new policy requiring exporters to retain their earnings in state banks. (Reporting and editing by John Mair; Gayatri Suryo)
Oil prices rise as US-Iran trade war escalates, Israel expands into Lebanon
The price of oil rose by a whopping 2% after Iran and the U.S. exchanged strikes, while Israel sent troops to Lebanon to fight the militant Hezbollah group that is backed by Tehran.
As of 0436 GMT, U.S. crude oil futures were up $2.29 (2.62%) to $89.65 per barrel. Brent futures increased $2.05, or 2.25%, to $93.17 per barrel.
Brent and WTI fell 1.8% and 1.7% respectively on Friday as a result of the increased fighting that followed the U.S.-Iran peace talks held in Washington.
The U.S. announced on Sunday that it had conducted "self defence strikes" over the weekend on Iranian radar and control sites on Iran's Qeshm island, as a reaction to "aggressive actions" from Tehran.
The elite Islamic Revolutionary Guard Corps of Iran said that its 'aerospace forces' targeted an airbase used in what they called a U.S. assault on a telecommunications tower on Sirik Island.
Donald Trump, the U.S. president, said that he would decide soon on a proposal to extend a ceasefire announced with Iran in early April. This will give negotiators a little more time to find a lasting solution to this conflict and to resolve the dispute about Iran's nuke programme.
Israel is key in any deal. Iran has said that Hezbollah should be included. A U.S. official revealed on Sunday that the U.S. had proposed a plan of "gradual deescalation", under which Hezbollah first would stop attacking Israel, in exchange for Israel not escalating in Beirut.
In a recent note, IG's Tony Sycamore stated that there are growing concerns about the mines located in the Strait of Hormuz. This is a major shipping lane for oil and gas. This could delay the process of reopening and cause the oil market to experience less relief even after the strait is reopened.
Sycamore stated that even if an agreement was reached, it would not result in a flood supply.
Axios reported on X Friday that Iran 'had dropped more mines earlier in the week in?the strait, just after U.S. Defence Secretary Pete Hegseth stated that attempts to lay additional mines would constitute a breach of the ceasefire.
The Strait of Hormuz is a conduit that carries about a fifth of the global oil and natural gas flows. Iran has effectively closed it ever since U.S. and Israeli airstrikes began in February.
Over the weekend, concerns about supply overshadowed China's lacklustre data on economic activity. This data?added further to fears that the second-largest global economy, China, is losing momentum due to a decline in exports and cost pressures.
Goldman Sachs warned late on Sunday about the risk of lower oil prices in China and Europe, despite its forecasts for Brent crude at $90 per barrel and WTI at $83. However, disruptions to Middle East supply could still drive up prices. (Reporting and editing by Edmund Klamann; Stephen Coates, Jamie Freed and Edmund Klamann)
(source: Reuters)