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Gold prices fall after Trump declares Iran deal 'over
Gold prices dropped on Wednesday, as oil prices surged and inflation fears intensified after U.S. president Donald Trump declared that the conflict with Iran is "over." Gold spot dropped 0.8%, to $4.072.69 an ounce at 09:11 am EDT (1310 GMT), after reaching its lowest level in the previous session since July 2. U.S. Gold Futures for August Delivery fell 1.8% to $4.083.20 an ounce. David Meger is the director of metals and futures at High Ridge Futures. Iran has escalated hostilities after U.S. forces attacked Iranian targets as a response to attacks against tankers in Strait of Hormuz. Crude oil prices increased by more than 5%. Inflation can be fueled by higher energy prices, and this could lead to higher interest rates in order to control the price pressures. Gold is often seen as a hedge to inflation but the metal's non-yielding nature makes it less appealing in an environment with high interest rates. The Federal Open Market Committee minutes for its June 16-17 meeting are due at 2:00 pm EDT (1800 GMT) to provide further clues about monetary policy. Meger stated that the market is searching for information to help clarify the path of future rate increases. According to the CME FedWatch Tool, traders are now pricing in a 67% probability of an increase in U.S. interest rates in September. This is up from 62% Tuesday. In a note published on Tuesday, Bank of America said that its 2026 gold forecasts will be reduced by 14% to $4,360 due to a more hawkish Fed. However, it added that $5,000 is still within reach once the tightening cycles ends. Silver spot fell by 2.42%, to $58.5681 an ounce. Platinum dropped 3.6%, to $1.582.13, while palladium declined 4.3%, to $1.221.97.
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Trump on Iran: US likely to strike them again Wednesday night
U.S. President Donald Trump warned Iran the United States would likely launch additional strikes on Wednesday night, following the attacks of the previous day. "I'll give a little warning. We're going hit them hard tonight," Trump said to reporters before his meeting with Ukrainian president Volodymyr Zelenskiy at the NATO Summit in Turkey. Trump had said to reporters in Ankara that a memorandum-of-understanding between the United States & Iran, which served as an initial ceasefire agreement, was "over". He did not say that Washington would go back to full-fledged warfare, and it was not clear if the negotiations to turn the ceasefire into an agreement permanent would continue. "I don’t know if there will be a deal." Trump stated that he may not make a deal. Iran claimed that it had?targeted U.S. sites in Bahrain?and Kuwait?after U.S. forces struck Iranian targets as a response to attacks against tankers in the Strait of?Hormuz. In addition to the renewed hostilities, the increased tensions have raised'safety and... security concerns in the Strait of...Hormuz. Shipping data shows that at least four oil and.gas.tankers turned back, rather than try to cross the vital supply route. Reporting by Gram Slattery, Doina Chiacu, and Humeyra Pauk; editing by Michelle Nichols
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Scientists warn that China's ability to cope with catastrophic storms will be tested in 2026.
Scientists warn that extreme weather conditions will only become more common this year. Weather systems are expected to bring severe weather conditions that will test the resilience of both the densely populated urban areas and rural communities. The National Climate Center of China expects that up to six typhoons will form in the South China Sea and the Northwest Pacific in July. This is more than the normal 3.8. Three of these storms could land, which is more than the average of 1.8. It said that the intensity of cyclones would also be higher. Scientists claim climate change is exposing the second largest economy in the world to more destructive weather events. This year, the El Nino pattern that could fuel stronger typhoons (as hurricanes are called in Asia-Pacific) and increase temperatures, has been a cause for concern. China is preparing for Super Typhoon Bavi, the second tropical storm to hit in one week. Bavi, which measures more than 1,000 km in diameter and has winds exceeding 290 kph (182 mph), briefly touched down on the U.S. Island of Rota at the Western Pacific. Last week, the typhoon Maysak hit China's southernmost province Hainan. It then swept quickly into the Chinese region Guangxi where it caused the most damage. Maysak's remnants also caused at least two tornadoes to form in central China. Benjamin Horton is the dean of City University of Hong Kong's School of Energy and Environment. He said, "The problem of these events is they just keep increasing." Horton warned that the magnitude of these events was increasing, and that there wasn't time to recover or become resilient. He expects to see more frequent and intense cyclones in this year, which will drop unprecedented amounts rainfall, leading to floods, landslides and crop damage, as well as a loss of life. He said, "This will just repeat itself over and over again." WATER, WATER EVERYWHERE Hengzhou, which is at the epicenter of the Guangxi flooding, was hit with heavy floodwaters after the dams of local reservoirs failed. Officials have confirmed that at least six people are dead in Guangxi and 375,000 other people are affected. Death toll expected to increase. A call for assistance posted on Chinese social networks on Tuesday stated that "at least 1,000 people are trapped in the mountains, and it is dark everywhere. We need urgent rescue." The post has not been independently verified. CCTV reported that after the failure of an intermediate-sized reservoir, on Monday, large quantities of silt and mud were carried by floodwaters into downstream villages and farms. CTV reported that in some homes, floodwaters had reached the second-floor, trapping people on roofs while violent torrents of water rushed all around them. Hengzhou is a largely rural city with more than one million residents. It has six reservoirs of medium size and over 200 smaller ones. The canal project, which is expected to be completed in September, will cost 70 billion yuan (10.3 billion dollars). Hui Su is the chair professor of Department of Civil and Environmental Engineering, Hong Kong University of Science and Technology. El Nino shifts typhoons westward towards China's coastline, increasing risks. Climate change also makes storms more destructive and wetter. The United Nations weather agency increased its forecast last week?for a rapid emergence of an El Nino in the months to come. El Nino, defined by the World Meteorological Organization, is a periodic increase in sea surface temperature over the eastern and central Pacific Ocean. This could potentially raise global temperatures, and lead to extreme weather.
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IMF cuts 2026 global growth to 3%; sees rebound in 2020
The International Monetary Fund lowered its global growth forecast for 2026 again on Wednesday, to 3.0%. It warned of the ongoing risks caused by the Middle East war, trade fragmentation, and possible corrections in the market expectations regarding AI. Global lender said the war had prevented a more severe downturn in the global economy, and that the demand-driven growth in the tech industry helped?to _offset the drop in energy supply caused by the war. Growth is expected to rebound in 2027 at 3.4%, which is below the 3.5% average seen in 2024-2025. The IMF increased its headline inflation forecast for 2026 by 0.3 percentage point to 4.7%, from April. However, it said that the rate should fall to 3.9% in 2019. The IMF said that energy prices are 25% higher than they were before the February 28 war started and will remain so. According to the new forecast, the Strait of Hormuz is expected to begin reopening in mid-July and reach prewar conditions by march 2027. The IMF stated that the global economy has fared better than expected in the wake of the conflict. It also noted that the outlook for countries with a strong technology integration and energy exporters was more positive. However, commodity importers who are less well-positioned to reap the benefits from AI development saw their growth projections lowered. Global trade growth is expected to drop sharply from 5% to 3.5% by 2026, following a year of heavy front-loading in anticipation of U.S. Tariffs. It will then rebound to 4.3% in 2027. Deniz Igan of IMF Research Department’s World Economic Studies division said that the global economy proved more resilient in April than expected, despite the effects of war and the closing of the Strait of Hormuz. Prices were up, confidence was low, but the release of strategic reserves and commercial inventory, along with increasing energy efficiency, helped offset supply shortages. Private sector also quickly adapted, finding alternate routes and supplies. She said, "So far, things are going well, but it doesn't remove the risks that exist, especially with the war." The collapse of the deal and renewed fighting would pose major risks because countries are largely out of reserves and have little room for maneuver. After three oil tankers were struck in the Strait of Hormuz by the U.S. military, the U.S. military launched a new round of strikes on Iran and revoked the license that allowed the country to export its oil. This put pressure on the fragile ceasefire. Igan added that the simultaneous efforts of many countries to rebuild oil reserves may also cause a spike in prices. She said that if there was a perception of a longer period, both the incentive to use reserves and the space to do so would shrink quickly. Igan stated that inflation and inflation expectations are rising, but mainly in the short term. There is little evidence to suggest that they will change in the medium-term. SCENARIOS HAVE CHANGED The IMF’s updated World Economic Outlook has dropped the three scenarios that it released in April before the United States reached a ceasefire agreement with Iran, and reverted to a more traditional baseline forecast. The April reference forecast assumed a shorter conflict. The IMF raised its forecast for 2027 by 0.1 percent points to 2.2%, compared with the April forecast. The forecast was lowered from 1.1% to 0.9% in April and the 2027 forecast remained unchanged at 1.2%. The growth forecast for Japan in 2026 was lowered by 0.1 percentage points to 0.6%. In 2027, the forecast was raised by the equivalent amount to 0.7%. The forecast for 2027 was also raised by 0.3 percentage points, to 4.5%. China's growth is now expected to reach 4,6% in 2026. This is up from April's forecast of 4.4%. In?2027, growth will reach 4,1%, which was up from April's 4%. India, which is one of the fastest-growing economies in the world, was also downgraded to 6.4% from 6.5% for 2026, while the IMF raised its forecast for 2027 to 6.7%. The IMF raised its forecast for 2027 by 1.9 percentage point to 6.5%. (Reporting and editing by Christian Schmollinger; Andrea Shalal)
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The benchmark interest rate of the Romanian central Bank is 6.5%
The central bank of Romania?held the benchmark interest rate to 6.5% on Wednesday as expected, due to the fact that inflation has fallen from double digits during the third quarter but is still a little above target. All the analysts surveyed by expected this decision. The bank expects the inflation rate to drop to 5.5% before year's end, but does not expect that it will return to its target range of 1.5%-3.5% until after the third quarter of 2027. The third quarter is expected to see a sharp drop in inflation as the effects of the higher electric costs and tax increases imposed last year to lower the largest budget deficit within the European Union, and maintain Romania's investment grade rating, fade. The central bank stated that "the annual?inflation is expected to shrink slightly in June before posting a?substantial decline in the?third quarter." "At the time, it is expected that disinflationary forces will become more evident over the longer term, due to the aggregate demand and the budget correction which began in 2025, but continued into 2026." The bank stated that political uncertainty following the 'collapse of a pro European government' two months ago, and the failure to reach an agreement on a new majority in parliament, as well as the breakdown of the 'interim agreement' between the U.S. Four parties in Romania's ex-broad coalition government?have put forward competing candidates for the position of prime minister. This has extended a political crises that has stalled policies and threatened access to EU funds, which are?underpinning Romania's economy amid dwindling domestic demand. Analysts predict that the central bank will keep the benchmark interest rate at 6.5% for the entire year 2026, and also the first quarter 2027. (Reporting and editing by Emelia Sithole Matarise; Luiza Ilie, reporting)
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Gold drops over 1% and oil increases after Trump declares Iran peace deal "over"
Gold prices fell more than 1% after the?U.S. Donald Trump declared that the interim peace agreement with Iran is "over", which sent oil prices higher, and revived fears of inflation and rising interest rates. By 1145 GMT the spot gold price had fallen 1.1% to $4.061.32 an ounce, its lowest since July 2. U.S. gold futures for August delivered fell nearly 2%, to $4.074.20/oz. After Trump declared that the four-month conflict between Iran and Israel ended in June, oil prices jumped more than 6% after he said that the agreement signed by both parties to end it was "over". UBS analyst Giovanni Staunovo said that the spike in oil prices has rekindled fears of an inflation spike, which could influence the Fed's decision-making at upcoming meetings. Iran's Revolutionary Guards had earlier claimed that they had targeted U.S. bases in Bahrain, Kuwait and Saudi Arabia following U.S. attacks on Iran and the suspension of the license allowing the country to sell oil. Gold is often considered a hedge against inflation, but higher interest rates to curb inflation can weigh down on the metal. The CME FedWatch tool shows that the markets?currently? expect a 68% probability of a U.S. interest rate increase in September, up from a?62% chance on Tuesday. The Fed's Minutes, due at 1800 GMT, will be closely monitored?for clues about the interest rate outlook. "Gold will continue to be under pressure in the coming sessions. The prospects of new lows 2026 are rising amid heightened geopolitical tensions as well as Fed rate 'hike bets", stated Nikos Tzabouras. Silver spot fell by 2.1%, to $58.78 an ounce. Platinum dropped 3.8%, to $1.578.91. Palladium was down 4.5%, to $1.220.0.
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Study says climate change will affect Italy's economic growth in the long term and increase debt risks.
A study published on Wednesday suggests that climate change could have a significant impact on Italy's economic growth in the long term and make its heavy debt burden even harder to sustain. The output of Italy could be reduced by as much as 6% by 2050. These findings are coming at a time when 'Europe, including Italy, is grappling with an intense heatwave which has seen temperatures rise above normal seasonal levels and been linked to thousands deaths on the continent. The Euro-Mediterranean Centre on?Climate Change's (CMCC) analysis argues that the damage caused by climate change goes beyond direct economic impact. It also affects government finances, reducing tax bases, increasing debt sustainability risk and driving up borrowing costs via what researchers?describe a "climate-spread". Massimo Tavoni is the director of the European Institute on Economics and the Environment (CMCC) and one of the study?authors. The study concluded that without additional mitigation and adaption?measures Italy's GDP in 2050 would be between 2.2% to 6.0% lower than a scenario with no climate damage. Even if the growth scenario was more favorable, the GDP would still fall between 1.6% to 4.2% below what it would otherwise be. The report warns that climate impacts are?uneven across Europe with southern and east nations more vulnerable to economic losses. Italy is the country with the highest debt burden in the currency bloc, with public debt amounting to 138% of its gross domestic product. Economists have warned for years that a weak trend in growth makes the country particularly vulnerable to shocks, which can undermine tax revenue and increase borrowing costs. Researchers estimate climate-related impacts may eventually double the refinancing risk on Italian public debt. However, they emphasize that "the outcome depends on future climate policies and adaption efforts." Matteo Calcaterra is another author who said that "delaying action?means increasing global warming's economic costs." "Action quickly means protecting the growth trajectory of the country and its long-term debt sustainability." (Reporting and editing by Keith Weir, with Valentina Consiglio)
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Is MORNING BID AMERICAS 'over?
Anna Szymanski is the Editor-in Charge of Open Interest. The oil prices?rose on Wednesday, after the U.S. & Iran exchanged new military strikes. This was the biggest?escalation of violence since both sides agreed to a truce last month. Donald Trump said the memorandum was also "over". The U.S. launched strikes on Iranian targets on Tuesday after several oil tanks were struck by projectiles in the Strait of Hormuz recently. Washington's action prompted Iranian attacks against U.S. base in the region. Global stock markets were shaky on Wednesday as chip stocks continued to fall, which dragged down major Asian indexes. The chip-heavy KOSPI Index in South Korea has now fallen into bear market territory after falling 20% since a record closing date at the end of June. It's still a good 70 percent higher than last year. Below, I will go into more detail. Check out Mike Dolan’s mid-week article, where he talks about issues such as Russia's Achilles heel in its conflict with Ukraine. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discuss the latest news in finance and markets seven days a weeks. IS IT "OVER"? After the recent military exchanges, and Washington's decision to revoke sanctions on Iranian oil effective July 17, oil prices rose 3% on Tuesday. Brent crude traded at over $78 per barrel on Wednesday, after Trump's comments on the MoU. The traders may be a little on edge, but will likely believe that this flare-up was just a bump along the road and not a permanent restart of hostilities. They'll also assume that the U.S. president's statements were mostly bravado. The chip stock selling continued on Tuesday. The SOX chip index fell nearly 5% in the US and the Nasdaq dropped more than 1%. Elon Musk’s SpaceX also fell victim to the selling. It lost nearly 7% in its first day of being a Nasdaq 100 constituent. SK Hynix and Samsung, both South Korean chipmakers, closed their shares lower on Wednesday despite yesterday's impressive results. In Europe, shares opened lower and Wall Street futures fell sharply just before the bell. The kiwi currency jumped in New Zealand after the central bank raised rates by a quarter point to 2.5%. Further tightening is "likely" to be needed. This is a timely reminder of the global price pressures that continue to exist. This will be even more acute, now that a new uncertainty is looming over the improving energy situation in the Middle East. The bond market fell on Wednesday. Today, the minutes of the Fed's policy meeting from last month will be released, and could shed more light on policymakers' thinking. The reports predate the recent Hormuz transits, which is a reminder that economic reports have a short shelf-life. Chart of the Day South Korea's benchmark KOSPI index fell over 5% on Tuesday, down roughly?20% since a record-breaking close in late July, signaling a bear market despite massive gains in this year. Watch today's events Minutes of the Federal Reserve's policy meeting held in June released * ?U.S. 10-year note auction (6 p.m. EDT) The second day of the NATO summit is underway in Ankara. Want to receive Morning Bid in your email every morning? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed here are the author's. These opinions do not represent those of News. News is committed, as part of the Trust Principles to independence, integrity and neutrality. (By Anna Szymanski, with additional writing by Al Reed).
Oil jumps, stocks fall as Trump says interim Iran deal 'over'
The oil price surged by?more?than 5% on Tuesday, while the global stock and bond markets fell as investors fled risky assets after U.S. president Donald?Trump declared that the memorandum signed with the?Iran in order to end the Gulf Conflict was "over".
Trump said this while he attended a NATO summit in Ankara. He also added that he didn't want to engage Tehran. He said, "I think it's a waste of my time to deal with them." The market sentiment was already fragile following the exchange of attacks between U.S. forces and Iranian forces in the Gulf.
Brent crude futures jumped 5% to $78 per barrel, the highest in a single day since late May.
Although this was far below the peak of $120 at the height the conflict, the inflation risk was still present, especially since the months of conflict had reduced global oil inventories.
"It is clear that the market doesn't want it and this really weighs on sentiment," said Chris?Beauchamp. Chief market strategist at IG.
The benchmark 10-year U.S. Treasury notes yields have risen for the seventh consecutive day, reaching a new one-month record of 4.58%. In Europe, German and Italian 10-year bond yields?rose to their highest levels in a full month, at 3.075% apiece, and respectively 3.9%. The U.S. Strategic Petroleum Reserve crude stock levels fell to their lowest since 1983 according to data released this week. This leaves the markets more vulnerable to supply shocks in future.
Khoon 'Goh, Asia Research Head at ANZ Singapore, stated that the main issue is whether or not we can still see oil flowing through the Strait of Hormuz and whether traffic continues to pass.
STOCKS DROP
European shares fell 1.6% on the way to the largest one-day decline in the STOXX600 since mid-March. U.S. Futures dropped 0.9% to 1.3%.
The VIX volatility indicator jumped almost 13%, its biggest one-day increase in more than a month. However, it was still lower than the March highs.
In recent weeks the stock market has been under pressure as investors have questioned the valuations for some of this year’s best-performing semiconductors and AI-related stocks. Samsung Electronics' shares fell for the second consecutive session on Wednesday despite the company announcing a?19-fold increase in profit. Analysts and investors worry that the demand for memory chips may slow down in the second half.
In the past few weeks, the market has shifted away from chip stocks to other sectors, such as financials and consumer stocks, and then back again to the hyperscalers who have dominated the market for the last year.
Samsung's results showed that investors are questioning valuations as some bottlenecks within the AI supply chain, such as data centres or memory chips, start to clear and pricing for AI models become harder to predict.
Marieke Blom, ING's global head of research and chief economist, said: "You could see the?market trying to determine what pricing power it will have. This can lead to fluctuations in valuations."
We also see that capex expenditure is increasing relative to EBITDA, meaning that the amount that can be supported via share buybacks and so on is decreasing. We may also see "pressure on valuations" in certain parts of the AI-chain.
The dollar is rising, pushing the euro up to $1.14 while the yen remains at 162.5, just below its 40-year-low.
The minutes of the Federal Reserve's meeting last month are due on Wednesday. Traders believe that new chair Kevin Warsh may reduce the details to soften any possible policy message. Reporting from Tom Westbrook and Amanda Cooper, both in Singapore; editing by Kevin Buckland and Hugh Lawson.
(source: Reuters)