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Gold's record rally: Who's keeping it moving?
Gold prices reached a record of $3,532 an ounce on February 2, extending the rally that has seen them rise by more than 90% since 2022. The demand is expected to be robust for a while due to various factors. The main drivers are central bank purchases, strong investment demand visible in the inflows of physical gold exchange traded funds and the upending of Western Security Policy by U.S. president Donald Trump, as well as his trade wars and concerns over the independence of the U.S. Federal Reserve. Will central banks continue to buy more? Metals Focus estimates that central banks will buy 900 tonnes of gold this year, double the average annual purchase of 457 tons between 2016-2021. After Western sanctions frozen half of Russia's foreign currency reserves by 2022, developing countries are looking to diversify away from the dollar. According to World Gold Council, a trade body, the official numbers reported to the International Monetary Fund represent only 34% the total central bank gold consumption estimate for 2024. In 2022-2025 they will account for 23% of the total annual demand for gold, which is double the share in the 2010s. Will the drop in the jewellery sector continue? According to the WGC, demand for gold jewellery, which is the primary source of physical consumption, dropped 14% in the second quarter 2025 to 341 tonnes, its lowest level since the pandemic-ravaged third quarter of 2010. High prices discouraged buyers. WGC estimates that high prices were the main cause of the decline. The majority came from China and India, whose combined share of the market fell below 50% only for the third time in five years. Metals Focus estimates that gold jewellery production will fall 9% in 2024 to 2,011 tonnes and experience a 16% decline this year. DO PEOPLE STILL PURCHASE SMALL GOLD COINS AND BARS? The retail investment market has seen a significant shift in consumer preferences, but overall purchases remain strong. According to the WGC's report, investment demand for gold bars increased 10% by 2024 while coin purchases fell 31%. This trend is expected to continue into this year. Metals Focus anticipates a 2% increase in net physical investment this year, to 1,218 tonnes. The demand for metals remains strong in Asia amid positive expectations about prices. Can gold ETFs attract more inflows? According to the WGC, gold ETFs are now a major source of demand. They recorded inflows of 397 tonnes in the period between January and June, which is their biggest first-half inflow since 2020. The total gold ETF holdings at the end June reached 3,615,9 tons, the highest since August 2022. Five years ago, their record was 3,915 tonnes. Metals Focus anticipates a net investment of 500 tons in ETPs by 2025, after seven tons inflows in the year 2024.
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Rosatom and EDF promote large nuclear reactors for India's energy future
The Russian nuclear company Rosatom and France’s EDF have positioned large nuclear power plants as the cornerstone for their engagement with India. They are also exploring small modular reactors to be used in targeted applications. India wants to increase its nuclear power production capacity from the current 8 gigawatts to 100 gigawatts in 2047. Reports from April indicated that India was easing rules for foreign entities to be able to own minority stakes nuclear power projects. Rosatom and Indian partners are discussing a range of energy solutions, including large-scale NPPs as well as small modular reactors. Katerina Astashina (South Asia Lead), Rosatom, said in a panel at the Powergen event in New Delhi on Tuesday that large NPPs represent the most promising and strategic avenue for the further development of this dialogue. EDF, who is proposing to build six 1,650MW reactors at the Jaitapur Site in Maharashtra has stressed the importance of maximising the available sites. Kalirajan S., managing director of EDF Nuclear Projects India said that when there are fewer suitable sites, it's always best to choose larger capacity reactors so we can make the most of these sites. "SMRs are also going to be used in captive power plants by small players that want to create a power system supporting data centers. "SMRs will also play a part in captive power plants for small players who want to set up a supporting power system for data centers..." India's nuclear energy generation, which is just over 8 gigawatts in size, represents about 3% its total installed capacity. NTPC, India's largest coal power plant operator, will also look to bring multiple technologies from around the world in order to deliver energy at the lowest cost, according Prasenjit Pala, executive director for nuclear at NTPC. NTPC plans to build nuclear power capacity of 30 GW over the next 20 years. Sethuraman N.R., William Maclean (Editing)
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Gold price explosion fuelled by Fed rate cut looming
Gold's latest rally, triggered by expectations for U.S. interest rate cuts, fears about the independence of the Federal Reserve and healthy investor demand and central bank demand will likely propel prices to record levels in coming weeks. Analysts expect spot gold to be in a range of $3,600 to $3,900 in the short to medium term. It could even reach $4,000 in 2026, if geopolitical and economic uncertainties continue. According to polls, gold has gained over 33% this year. Analysts have raised their average price forecast for 2025 from $2,756 per ounce in January to $3065 in April and to $3220 most recently in July. Financial markets have been betting on a rate cut in September after Fed Chair Jerome Powell acknowledged the rising risks of employment. Ricardo Evangelista is a senior analyst at ActivTrades. He said that the dollar's bearish outlook, based on expectations of Fed cutbacks, investors' distancing themselves from U.S. investments, and tariff-related uncertainty, supports gold. Since Donald Trump's return to the White House, in January, the dollar has dropped by nearly 11%. The dollar's weakness makes gold priced in greenbacks less expensive for those who hold other currencies. Trump's criticisms of Powell, and his attempts to remove Lisa Cook as Governor have raised concerns about the Fed's independent and led to further gold purchases. Carsten Menke, Julius Baer's analyst, said: "The wildcard that is most likely to cause a bullish move in the market... could be the potential interference of the U.S. Federal Reserve or concerns over the dollar as a safe haven." Gold's appeal is also boosted by security concerns from the Middle East, between Russia and Ukraine, and demand from central banks in developing countries. This includes China's central banks adding gold to their reserves for the ninth consecutive monthly in July. World Gold Council data indicates that central banks are planning to increase their gold holdings in proportion to their reserves while reducing dollars reserves over the next 5 years. Michael Hsueh is a precious metals analyst at Deutsche Bank. He said that the combination of rising gold prices and central bank accumulation has led to a sharp rise in gold reserves for some central banks. Inflows into gold-backed ETFs are also significant. SPDR Gold Trust is the largest gold ETF in the world. Its holdings have risen to 977.68 tonnes, a 12% rise so far this season and their highest level since August 2022.
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South Sudan clashes kill 14 in renewed violence north
The military announced on Tuesday that at least four soldiers as well as 10 militia members had been killed during fighting in a South Sudanese area where previous clashes resulted in the arrest of the First Vice President Riek Machar. Machar, a long-time rival of Salva Kiir, was arrested in March. This sparked international calls for restraint. It also sparked fears that a civil war could break out between Kiir Dinka forces loyal to Machar and Nuer fighters loyal Kiir. Garang Ateny, South Sudan's military spokesperson, said that fighters from the White Army, a group Machar's critics claim is affiliated with the SPLM-IO, the party he leads in Upper Nile, attacked the South Sudanese military on Monday near Nasir, in Upper Nile State. Early this year, violence erupted in the northeastern town that led to Machar’s arrest. Ateny stated that the White Army had launched three attacks against the position of the army, and added that the army lost four soldiers during the conflict while 10 attackers died. It was not possible to reach the spokespeople of SPLM-IO or White Army. Machar and his group deny that they have any links with the White Army. Since a 2018 agreement that ended a civil war rife with ethnic tensions between the two men, which resulted in hundreds of thousands deaths, Kiir has been a Dinka who shares power with Machar. Machar's arrest for allegedly trying to incite a revolt through his supposed support of the White Army militia has sparked fears that ethnic conflict will erupt again. (Written by Elias Biryabarema, edited by William Maclean).
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Ivory Coast secures Africa's first sustainability-linked loan with World Bank guarantee scheme
Ivory Coast has raised 433 million euros ($507 million) with Africa's first sustainability-linked foreign currency loan in a transaction that also comes with guarantees from the World Bank, arrangers of the deal said on Tuesday. In recent years, the West African nation has turned to sustainable financing to increase its resilience to climate shocks as well as diversify their funding sources. In July, it raised $337m in an ESG certified Japanese samurai Bond. The structure of the sustainability-linked loan helped Ivory Coast to "attract significant appetite from international investors and secure favourable financial terms," said Rothschild and Co, which advised the Ivorian government in the deal. The World Bank Group’s International Bank for Reconstruction and Development, or IBRD, offered a guarantee for the first loss while its Multilateral Investment Guarantee Agency provided a guarantee for the second. Hiroshi Mattano, MIGA's executive vice president, said in a press release that "we are helping Ivory Coast to secure financing at better terms, accelerate climate commitments and build resilience in key sectors." The terms of the loan, which are more favorable than standard financing, are tied to performance targets for renewable energy, prevention of deforestation as well as reforestation. Standard Chartered acted both as sole lender and lead arranger. The World Bank announced in December that it would support Ivory Coast with a debt for education swap. This was a first-ever transaction for this Washington-based lender.
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India's JSW Cement reports larger quarterly loss due to one-off charges
India's JSW Cement reported on Tuesday a larger quarterly loss in the first results it has released since its listing in August. The company was hurt by an one-off charge relating to the conversion from preference shares to equity shares. The combined net loss for April-June was 13.56 billion rupees (154.96 millions), compared to a loss 151.2 million rupees one year earlier. Cement maker reported that 160 million compulsory convertible preferential shares were converted during the quarter into 235.7 millions equity shares at an additional premium of 132.75 rupies each, resulting in a valuation differential of 14.66 billion rupies. This was reported as a one-time charge by the company in its quarterly results. The company's profit before tax, excluding this charge of 81.4 million rupies, rose to 1,65 billion rupies from 81.4 millions a year ago. Ambit Capital analysts said that the company's quarterly earnings were boosted by a 2% increase in prices year-over-year. The company's operating revenue increased by 8% while its expenses decreased by 1% compared to the previous period. The company is part of the JSW Group (steel-to-autos), which has cement mills located in Western, Southern and Eastern India. The stock's modest debut last month was due to investors who looked past the market jitters, and instead bet on the long-term prospects that emerged from India's continued emphasis on developing infrastructure. $1 = 87.5060 Indian Rupees (Reporting and editing by Sumana Mukherjee, Tasim Zaid and Sahal Muhammad in Bengaluru)
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Gold reaches record high of $3,500 an ounce as attention turns to payroll data
Investors piled into gold after it surged to an all-time record above $3,500 an ounce on February 2, as they grew more confident of a Federal Reserve interest rate cut, and the lingering economic and political risks. As of 10 am EDT (1400 GMT), spot gold was up by 0.5%, at $3,491.47 an ounce, after reaching a record high price of $3,508.00. Bullion is up 33% for the year. U.S. Gold Futures for December Delivery gained 1.1%, to $3.554.30. The gold market has entered a period of strong consumption for the season, and there are expectations that rates will be cut at the Fed's September meeting. Suki Cooper is a precious metals analyst with Standard Chartered Bank. She said that we continue to expect record highs. Cooper continued, "We expect gold to continue its upward trend and predict that it will average $3,500/oz during Q3-25, and $3,700/oz during Q4-25." According to CME FedWatch, the markets are pricing a 90% probability of a rate cut of 25 basis points at the Fed meeting on September 17. Gold that does not yield typically gains in an environment of lower interest rates. Analysts believe that gold's record-breaking run in 2018 is due to sustained central bank purchasing, diversification from the U.S. Dollar, a resilient safe haven demand amid geopolitical tensions and trade frictions and broader dollar weakness. The appeal of gold has been boosted by the uncertainty surrounding U.S. policies under President Donald Trump. His public battles with the Fed - including his criticism of Chairman Jerome Powell and his push to remove Governor Lisa Cook - have raised questions about central bank independence. "The allegations against Cook are a warning to other FOMC Members to yield to government pressures for substantial rate reductions... In such a climate, gold investments are more attractive," Commerzbank wrote in a note referring to Federal Open Market Committee. The focus now shifts to the nonfarm payrolls report in the U.S. on Friday, which will provide clues as to how much of a rate cut there might be for September. Zain Vawda said that a weak job report this week might reignite talk about a possible 50-bps rate cut during the meeting. Vawda said, "I don't think this will occur, even if the NFP is poor, but the market participants might start pricing in the possibility and that could fuel a gold rally." ETF inflows have fueled the rally. SPDR Gold Trust, the world's biggest gold-backed ETF said that its holdings increased 1.01% to 977.68 tonnes on Friday, the highest level since August 2022. Spot silver fell 0.5% to $40.48 an ounce after reaching its highest level since September 2011. Palladium dropped 1.4%, to $1.121.75, and platinum fell 0.7%, to $1.389.75.
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US construction spending dips in July
The U.S. housing market was still constrained by high mortgage rates in July, which lowered the construction spending. Census Bureau of the Commerce Department reported on Tuesday that construction expenditures dropped 0.1%, following a 0.4% decline in June. The drop was expected by economists. In July, spending fell 2.8% compared to the same month last year. Spending on private construction fell by 0.2%. Residential construction investment increased by 0.1%. Outlays for new single-family housing projects also rose 0.1%. The second quarter saw the fastest contraction in residential investment in over two and a half years. The third quarter is expected to see a further decline, marking the third consecutive quarterly decline. High mortgage rates have harmed the housing market. Mortgage rates are still high, despite the fact that they have dropped from their lofty levels this year on expectation of a Federal Reserve rate cut in September. Slowing employment is also affecting home sales. In July, the inventory of new homes completed and for sale reached its highest level in 16 years. In July, spending on multifamily housing units decreased by 0.4%. Investments in non-residential private structures such as offices and factories fell by 0.5%. The second consecutive quarter saw a decline in nonresidential structure spending. The increase in public construction spending was 0.3%. The state and local governments increased their construction expenditures by 0.1%, while federal government spending increased by 3.2%. Lucia Mutikani, reporting; Andrea Ricci, editing.
Trump administration to sell coal leases in Alabama, Montana and Utah
The Trump administration announced on Tuesday plans for competitive coal leasing sales in Alabama, Montana and Utah this year as part of an overall government effort to boost domestic coal production.
Why it's Important The sales are part President Donald Trump’s effort to revitalize U.S. Coal Mining despite global efforts for a transition to cleaner energy sources in order to reduce planet-warming CO2 emissions.
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In a press release, Interior Secretary Doug Burgum stated that coal has been the foundation of America's industrial and energy strength for many years. By moving forward with lease sales, "we are creating good paying jobs, supporting local community, and securing resources that keep America Strong."
By the numbers: In Tuscaloosa county, Alabama, Interior Department's Bureau of Land Management is offering two leases that cover 14,050 acres (5.685.83 ha) and are estimated to contain up to 53 million tons of metallurgical coke used in steelmaking. The sale is scheduled for September 30.
The Little Eccles Tract in Emery County is 120 acres and contains an estimated 1,29 million tons recoverable coal. Canyon Fuel Company submitted a request for the sale and it will be held on October 1st. BLM in Montana will sell 1,262 acres of estimated 167.5 millions tons of coal on October 6. The sale may extend the life of Spring Creek Mine until 2051. The mine's operator, Navajo Transitional Energy Company, applied for the lease.
CONTEXT Trump signed executive orders to boost coal production. One of these executive orders included the designation of metallurgical coking coal as an essential mineral. Trump has claimed that while coal-burning power plants generate less than 20 percent of the electricity in the United States, deregulation can revive this industry and help to support energy security. However, critics have cited coal's decreasing competitiveness and its environmental impact. Rod Nickel, Nichola Groom and Nichola Broom contributed to the reporting.
(source: Reuters)