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Gold to lose weekly value as inflation and rate hike fears persist
Gold prices dropped on Friday and were expected to lose money for the week due to concerns about inflation and possible interest rate increases by the U.S. Federal Reserve. As of 0745 GMT the spot gold price was down by 0.7%, at $4,183.19 an ounce. This was a loss of 3.4% for the week. U.S. Gold futures for August deliveries?rose by 2.2% to $4204.40. Gold dropped to a six-month low Thursday, before closing at $4,219.69. This was after U.S. president Donald Trump cancelled planned military strikes against Iran and announced an imminent peace deal. Iran, however, countered by saying that they had not yet reached a decision about an agreement. Edward Meir is an analyst with Marex. He said that the price was "completely driven by?the geopolitical headlines." "The markets are going to be paying attention to any signals that the Fed might raise rates. If they hint in this direction, then I think gold will probably fall below the $4,000 level." Since the Iran War began, gold has dropped by about 20%. Central banks are worried that the rising cost of energy could lead to inflation. This is causing them to raise interest rates and increase the "opportunity costs" associated with holding the metal. U.S. producer price increased more than expected in may, leading to the biggest annual gain in three and a half years. According to CME Group's FedWatch, traders are currently pricing in a 60% chance that the U.S. will raise interest rates in December. On Wednesday, the holdings of New York's SPDR Gold Trust - the largest gold-backed exchange traded fund - fell by 0.3%, to a total of?923.89 tons. ANZ lowered the price target of gold for year-end by $400, to $5200. This was done to reflect recent price volatility. Spot silver dropped 1.8% per ounce to $66.13, and platinum fell 0.3% to $1.715.44, both metals heading for a loss on a weekly basis. Palladium gained 1.6%, to $1,289.75. It has gained 5% this week. (Reporting by Pablo Sinha in Bengaluru; Editing by Rashmi Aich, Mrigank Dhaniwala, Subhranshu Sahu and Harikrishnan Nair)
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Copper prices rise on hopes for Middle East peace and a lower oil price
Copper prices rose on Friday, amid falling oil prices and optimism that a peace agreement between the U.S.A. and Iran could be close. By 0702 GMT, the?benchmark?three-month contract on the London Metal Exchange had risen 1.44% to $13,676 per metric ton. The Shanghai Futures Exchange's most traded copper contract rose 1.21%, to 104660 yuan (15,474.24) per ton. Donald Trump, the U.S. president, said Thursday that a peace agreement could be signed this weekend and reopening of the Strait of Hormuz could happen. Iran said, however, that no final decision has been made about a possible agreement. Prices of copper have been affected by the war. The copper prices on the?LME? and the SHFE? had fallen to a multi-week low on Thursday, amid the worst outbreak of violence between Iran and the U.S. since the sides signed a ceasefire agreement in April. Aluminium also gained 0.87% at the LME, and 0.67% at the SHFE. LME aluminium was in a relatively small backwardation Thursday. The sharp decline in the LME Cash-3M Premium... highlights the unwinding extreme?geopolitical risks premiums, and speculative positions as the market reassessed 'the extent and 'duration of supply interruptions, said Rupankar RM. Head of Market Research and Data Intelligence at AL Circle. A persistently high inflation rate has also raised concerns over the possibility of higher interest rates for a longer period. High interest rates reduce the demand for industrial metals that are dependent on growth. Aluminium gained 0.87% on the LME. Zinc gained 0.97%. Lead added 0.21%. Nickel gained 0.63%. Tin added?0.38%. On the SHFE, tin rose by 2.28%, while lead fell 0.65%. Nickel gained 0.32%, and zinc added 0.21%.
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Gold to lose weekly value as inflation and rate hike fears persist
Gold prices fell on Friday, and were "on track" to make a loss for the week. This was due to concerns about inflation and possible interest rate increases by the U.S. Federal Reserve. As of 0610 GMT the spot gold price was down by 0.8%, at $4,182.47 an ounce. This was a loss of 3.4% for the week. U.S. Gold Futures for August Delivery rose 2.2% to 4,203.60. Gold dropped to a six-month low before closing at $4,219.69 on Thursday, after U.S. president Donald Trump cancelled planned military strikes?on Iran, and announced an imminent peace agreement. Edward Meir is an analyst at Marex. He said that the price was "completely driven by geopolitical headlines." The markets will pay attention to any indication that the Fed might raise rates. If they hint at moving in this direction, then I think that gold could break below the $4,000 level. Gold has lost around 20% since the Iran war started, due to fears that rising energy prices could lead to inflation. Central banks are therefore keeping interest rates high and increasing the opportunity costs of holding non-yielding gold. The Middle East conflict has pushed up the price of energy products, causing the U.S. producer price to increase more than expected. This is the biggest annual gain for 3-1/2 years. According to CME Group's FedWatch, traders are pricing in a 60% probability of an increase in U.S. rates in December. Donald Trump said on Thursday that the United States and Iran can sign a deal to reopen the Strait of Hormuz for shipping as soon as this weekend. Iran, however, countered by saying that they had not yet reached a decision about a pact. The largest gold-backed ETF, New York's SPDR Gold Trust fell 0.3% on Wednesday to 923.89 tons. ANZ has lowered their gold price target by $400, to $5200, in order to reflect the recent volatility. Spot'silver' fell by 0.9%, to $66.78 an ounce. Platinum gained 0.4%, to $1,725.99. Both metals are headed towards a weekly decline. Palladium gained 1.7%, to $1,290.15. It has gained 5% this week. (Reporting and editing by Rashmi aich, Mrigank dhaniwala, and Subhranshu sahu in Bengaluru.
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ASIA GOLD - India gold demand rises as prices fall; China premiums are reduced
The demand for gold in India increased slightly this week, as jewellery buyers were attracted by lower prices, despite caution. In China however, premiums eased. The price of gold in India fell to its lowest level since April 2, at 146.444 rupees for 10 grams, on Thursday. It is down 1.5% this week. Chanda Venkatesh said that the demand for gold increased after the recent price correction, especially jewellery buyers. Dealers quoted discounts Discounts of up to $35 per ounce, including 15% import duties and 3% sales taxes, compared to last week's discount of up to $87.5. Although jewellers are restocking their shelves, the confidence in retail sales for the coming months is still low, according to a Mumbai bullion dealer working with a private banking institution. The South Asian country raised its import tariffs for gold and silver from 6% to 15% last month as part of an effort to reduce the pressure on foreign currency reserves due to higher oil prices. In May, India's physical gold exchange-traded fund saw its first monthly net outflow since a year. Investors booked profits after a sharp increase in prices that was triggered by higher import duties. Bullion is traded at a premium in China, the world's largest consumer. The premium for gold is now between $1 and $5 per ounce, down from $7-$10 last week. Peter Fung is the head of trading at Wing Fung Precious Metals. He said that "the $4,000 mark was a good level for support, and we can see some fresh interest in buying gold." On Thursday, spot gold reached a?lower than six months of $4,022.29 before closing higher. It is now on course to suffer a loss for the week. Data from the People's Bank of China revealed on Sunday that China's central banks gold reserves increased for a 19th consecutive month in May. In Hong Kong, gold In Japan, the price of the stock was between par and $1.90. It was sold for $0.50 less. In Singapore Gold was sold at a discount of $0.50 or a premium of $2. Reporting by Pablo Sinha, Bengaluru; and Rajendra Jadhav, Mumbai. Editing by Eileen Soreng.
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Oil hits two-month lows, stocks rally on Gulf breakthrough hope
The Asian stock market?extended its global rally on the hopes of a Middle East Peace Deal. Meanwhile, the dollar and bond yields fell and oil prices reached?two-month highs, easing inflation fears. European bourses will?open? sharply higher with pan-regional futures up by 1.8%. Wall Street futures are up about 0.2% on the back of a strong overnight rally. Elon Musk’s SpaceX has been the focus of attention as it makes history by launching the largest initial public offering ever. The IPO raised a new record of $75 billion. This valued the rocket and spacecraft maker at $1.77 trillion, making Musk the first trillionaire in the world. Donald Trump, the U.S. president, said that a deal for peace could be signed this weekend. This came after Trump had threatened to launch more attacks on Iran. He said that negotiations with Tehran were at the highest level of Iran's leaders and had been approved?by a broad coalition of regional power. Trump's comments follow several bouts of optimism by the president, which have not resulted in a deal. This has kept markets on edge. Iran said that in this case, too, it hadn't reached a decision about an agreement. Ray Attrill is the head of FX Strategy at National Australia Bank. If we hear anything from Iran that is positive, it's clear the odds of a peace agreement will change dramatically. If confirmed, the deal would be the biggest diplomatic breakthrough to date in ending the three-month war that sent energy prices soaring. On Thursday, the European Central Bank raised interest rates for nearly three years to curb inflation caused by war. Prices of oil fell to their lowest levels in two months amid expectations that an agreement would be reached soon. Brent crude futures fell 1.8% to $88.76 a barrel after falling nearly 3% over night. The broadest MSCI index of Asia-Pacific stocks outside Japan rose 3.7%. This was led by the South Korean KOSPI, which jumped 7.8%. Japan's Nikkei rose 3.6%. Hong Kong's 'Hang Seng' gained 2%, while China's blue chip CSI300 rose by 1.5%. Wall Street surged overnight, with all three major indices posting their largest daily gains since the U.S.-Iran ceasefire agreement on April 8th. The Nasdaq rose 2.5% on expectations of a successful market debut for Musk's SpaceX. Hugh Lam is an investment strategist with Betashares. He said that the early float could be exacerbated by near-term volatility because of a fixed price and a higher retail allocation than usual. Treasuries maintained gains, as markets reduced bets on a Federal Reserve rate hike this year due to hopes of a Gulf peace deal. The price for an October rate hike has dropped from 51% to 36%. The yield on two-year Treasury bills was unchanged at 4,073%, after falling 6 basis points overnight. The benchmark 10-year Treasury yields remained at 4.4690% after dropping almost 8 basis points (bps) overnight. After overnight losses, the?dollar stabilized. After a 0.4% decline in the previous session, it rose 0.2% to 160.20 yen. The yen is still close to 160, which many traders see as a level of resistance. Friday, precious metals fell. Gold spot fell 0.7%, to $4,183 per ounce after a 3.5% overnight jump, and silver spot also dropped 0.9%, to $66.72 per ounce following a 5.8% increase. Stella Qiu, Shri Navaratnam, and Kevin Buckland edited the report.
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Gold to lose weekly value as inflation and rate hike fears persist
Gold prices fell on Friday, and were "on track" to make a loss for the week. This was due to concerns about inflation and possible interest rate increases by the U.S. Federal Reserve. As of 0442 GMT spot gold was down by 0.5%, at $4,193.58 an ounce. This was set to be a loss of 3.1% for the week. U.S. Gold Futures for August Delivery rose 2.5% to $ 4,215.30. Gold dropped to a more-than-six month low on Thursday, before closing at $4,219.69 as U.S. president Donald Trump canceled planned military strikes?on Iran, and signalled a forthcoming peace deal. Edward Meir is an analyst at Marex. He said that the price was "completely driven by geopolitical headlines." The markets will pay attention to any indication that the Fed might raise rates. If they hint at moving in this direction, then I think that gold could break below the $4,000 level. Gold has lost around 20% since the Iran War began. Central banks are worried that the rising cost of energy could lead to inflation. This is causing them to raise interest rates and increase the opportunity costs associated with holding gold. The Middle East conflict has pushed up the price of energy products, causing the U.S. producer prices to increase more than expected. This is the biggest annual gain for 3-1/2 years. According to CME Group's FedWatch, traders are pricing in a 60% probability of an increase in U.S. rates in December. Donald Trump said on Thursday that the United States and Iran can sign a deal to reopen the Strait of Hormuz for shipping as soon as this weekend. Iran, however, countered by saying that they had not yet reached a decision about a deal. The largest gold-backed ETF, New York's SPDR Gold Trust fell 0.3% on Wednesday to 923.89 tons. ANZ has lowered their gold price target by $400, to $5200, in order to reflect the recent price volatility. Spot'silver' fell 0.5% per ounce to $67.03, and platinum gained 0.7% at $1,731.41, both metals heading for a loss on a weekly basis. Palladium gained 1.8%, to $1,292.20. It has gained about 5% this week. (Reporting and editing by Rashmi aich, Mrigank dhaniwala, and Subhranshu sahu in Bengaluru.
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Oil losses continue as Trump cancels planned strike on Iran
The oil price fell by over $1 on Friday, continuing the losses of the previous session. Donald Trump canceled plans to attack Iran, which reduced fears of an escalation in hostilities after tit-fortat attacks earlier this week. Brent futures dropped $1.83, or 2%, to $88.55 per barrel at 0410 GMT. U.S. West Texas Intermediate crude (WTI), however, fell $1.60 or 1.8% to $86.11. Trump, who threatened to hit Iran'very hard', called off planned attacks on Thursday. He said that discussions with Iran have?progressed, and a peace agreement could be signed this weekend to reopen Strait of Hormuz for shipping. Iran's semiofficial Fars News Agency reported that Tehran has not approved any agreement. Tony Sycamore, IG's market analyst, said: "This could be a false dawn but the market has reacted quickly and decisively." He said that even though oil prices are correcting downwards, as long as they can remain above the support level of the low $80s the risks will be firmly "skewed" to the upside. The Iranian government announced the "closure" of the Strait of Hormuz on Thursday. This was a waterway through which traffic had been severely restricted. It said it would shoot at any vessel trying to cross the waterway. The Strait of Hormuz normally carries about a fifth (or more) of the world's oil and gas shipments, and Tehran has been blocking it for months. This has kept energy costs high. The Iranian state media reported that Iranian forces had prevented a tanker without coordination from crossing the Strait of Hormuz. The U.S. Military said on social media commercial ships continue to transit the waterway. "We'd be careful about assuming the extension of the cessation is a done deal. Even if the ceasefire is extended, it may be fragile. In a note published on Friday, ING analysts said that if the nuclear talks?do not progress?, they could easily fall apart. We believe that the market will reach an inflection in late July, if oil flows do not resume before then. Inventory levels and a seasonally higher?demand will push the price of a barrel up to $120-130. The Organization of the Petroleum Exporting Countries lowered on Thursday its forecast for the growth of world oil demand in 2026 from a 'previous 1,17 million barrels per daily (bpd), marking its second consecutive 'downward' revision. The group of producers also predicted that consumption would increase later. This increased its forecast for demand growth in 2027. The group expects oil demand in 2027 to increase by 1,73 million barrels per day, an increase of 190,000 barrels per day from its previous estimate. (Reporting and editing by Sonali Paul, Tom Hogue and Emily Chow)
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Copper prices rise on hopes for Middle East peace and a lower oil price
Copper prices rose on Friday, amid lower oil prices and optimism about a possible peace deal between the U.S.A. and Iran that would end the war. By 0300 GMT, the benchmark three-month contract for copper on?the London Metal Exchange had risen by 1.64% to $13,704 per metric tonne. The Shanghai Futures Exchange's most traded copper contract rose 1.5%, to 104960 yuan (15,516.30 USD) per ton. Donald Trump, the U.S. president, said Thursday that a "peace agreement" could be signed this weekend and reopen 'the Strait of Hormuz. Iran said, however, that no final decision has been made about a possible agreement. Copper is a widely used indicator of global economic health, and the war has affected prices. The copper prices on the?LME? and SHFE? fell to multi-week lows Thursday, amid the worst outbreak of violence between Iran and the U.S. since a ceasefire was agreed in April. The World Bank cut their global growth forecast for 2026 on Thursday due to the "war" and warned that a further drop could occur if the energy supply disruptions continue and financial market stress increases. The persistently high inflation has also raised concerns about the possibility of higher interest rates for a longer period. The European Central Bank raised borrowing costs for the first time on?Thursday. High interest rates dampen demand prospects for industrial metals that are growth-dependent. The outlook for Middle East peace has also largely influenced the prices of other base metals. Aluminium gained 1.09% on the LME. Zinc gained 1.03%. Lead gained 0.62%. Nickel gained 1.11%. Tin gained 0.76%. On the SHFE?, aluminium rose by 0.76%. Zinc gained 0.43%. Lead lost 0.46%. Nickel gained 0.9%. Tin rose 2.72%.
Survey shows that small Japanese firms are most affected by the Mideast war due to high procurement costs
A joint survey by the Japan Chamber of Commerce and Industry and the Tokyo Chamber of Commerce and Industry revealed that the Middle East conflict has put the greatest strain on Japan's small and mid-sized businesses.
A survey of 2,497 firms across 47 prefectures conducted between May 7 and 29 found that 80% to 90% of companies were affected by rising fuel prices, while more than 50% of them were affected by disruptions in petrochemical supply.
The survey revealed more information:
* The highest impact on business was the increase in procurement costs, at 74.8%. This was followed by higher fuel prices (62.9%) and an increase in?logistics cost at 38.7%.
* Nearly 46.6% said that they have passed on the higher costs in full or part to their customers. 48.4% stated they have not done so.
The highest cost burdens were reported by the hospitality, manufacturing, construction and food service sectors.
Construction firms were disproportionately impacted by bottlenecks in supply and losses of orders due to delivery delays.
* Companies' most common response is to pass on the price increases. This was cited by 39.7%.
* Companies urged the government to provide cash flow support, relief for electricity, fuel, and gas costs, and ensure stable energy supplies. (Reporting and editing by Tokyo Newsroom)
(source: Reuters)