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Gold falls to a seven-month low after dollar firms and rate hike bets increase
Due to the pressure from a stronger dollar and expectations of an interest rate increase, gold prices dropped to a seven-month-low on Wednesday. Gold spot fell 3.3%, to $3.973.79 per ounce at 2:00 pm EDT (1800 GMT), having hit its lowest level since 2025. U.S. Gold Futures closed 3.4% lower, at $4,008.80. Dollar-priced gold became more expensive to holders of other currencies as the U.S. currency firmed. After the U.S. Central Bank's latest policy meeting, traders have increased their bets that interest rates will rise in the U.S. this year. They are also concerned about inflationary pressures resulting from the Iran War. Tai Wong, a metals trader who is independent, stated that the'market pricing' a rate increase as early as September, due to a Fed that has become more hawkish, as well as a dollar surging at its highest level in 13 months, combined with lower inflation expectations, are placing heavy pressure on precious materials. He added that "for gold, there is support at just under $3.900, and central bank purchasing continues, so a crash is unlikely. However, expect a long period of consolidation, as the gold market is no longer in favor." When interest rates increase, gold becomes less appealing to investors because it does not offer a yield. Spot gold has lost more than 1,600 per ounce since it reached a record high of $5,594.82 at the end of January. ING analysts have cut their gold predictions. They now expect prices to average $4.300 per ounce during the third quarter in 2026 - and $4.600 for the fourth. This is compared to their previous projections which were $4.850 and $5,000 respectively. Investors?also await U.S. The Fed's preferred measure of inflation, Personal Consumption Expenditures, is due Thursday. Lukman Otunuga is a senior research analyst with FXTM. He said that more hawkish signals or economic data supporting the argument for higher rates could translate into further downside risks for gold. Silver spot fell 9.1%, to $56.41, after reaching its lowest level since Nov.?2025. Standard Chartered stated in a 'note' that silver is 'vulnerable to volatility in the near term due to outflows of exchange-traded commodities, but a market undersupplied suggests a recovery in price in the next few months. Palladium fell 6.8%, to $1153.68, and platinum dropped 5.5%, to $1560.72.
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Stocks recover as Dollar rises to an all-time high
The stock market rebounded Wednesday, despite a drop in technology stocks. This was partly due to concerns over stretched valuations. Meanwhile, the dollar reached a new high. The technology stocks that were hard hit on Tuesday started to rise ahead of Micron's earnings, whose chips are a key component in the AI boom. Investors priced in at minimum one rate increase from the Federal Reserve for this year, but sentiment was still fragile. All three Wall Street indexes rose, with gains driven by consumer discretionary, materials and industrial stocks. The biggest losers were energy stocks as the flow of crude through the Strait of Hormuz continued to push prices down. The Dow Jones Industrial Average increased by 1.12%. The S&P 500 rose by 0.84%. And the Nasdaq Composite grew by 0.89%. Wasif Latif is the chief investment officer at Sarmaya Partners. Investors are trying to position themselves for Micron's earnings announcement. The MSCI index of global stocks rose by 0.45%. MSCI's index for Asian stocks outside Japan increased by 0.15%. South Korea's KOSPI rose 3.5%, after falling?10% the previous session. The broader European stock market remained roughly unchanged for the day. The shares of Rheinmetall fell 15% after reports that the German government was planning to cancel a multi-billion euro frigate project. This decline was partially offset by gains made in heavyweight luxury and technology stocks. STRAIT of HORMUZ On signs that more oil tankers stuck in the Gulf will be moving out of the Strait of Hormuz, crude oil prices continued to fall, trading at four-month lows. The outlook is uncertain, as the U.S., and Iran, have given conflicting reports about what they agreed to in their peace agreement, including important elements like nuclear inspections, and control of the Strait. Brent dropped to $73.53 a barrel, a 4.55% drop on the day. DOLLAR JUMPS The U.S. dollar rose for the 'third day in a row against a basket major currencies, reaching its highest level in over a year. Markets expect Fed rate increases. Investors lowered expectations that the European Central Bank would raise rates more than they did this year. They also priced in a higher chance of the Fed raising borrowing costs. The euro traded at its lowest level in over a year. It was down for the third day, trading at $1.1354. The yen also traded around 161,77 on this day. This kept?markets on alert over a possible currency intervention to prop up the battered Japanese?currency. The dollar index rose by 0.21%, to 101.60. This is its highest level since 2025. The stronger dollar has pushed gold prices to their lowest level in more than seven months. Spot gold dropped 2.35%, to $4.011.69 per ounce.
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Rubio pledges security to Gulf leaders amid Iran deal concerns
U.S. Secretary Marco Rubio met with the leaders of the United Arab Emirates (UAE) and Kuwait (Kuwait) on Wednesday. He pledged not to undermine the security of these Gulf allies, as he tried to reassure Gulf Allies sceptical about a 'proposed deal' to end the U.S. - Israeli war against Iran. The U.S. and Iran?accord signed last week is the first between American and Iranian Presidents since the?1979 Islamic Revolution. It includes a $300 billion fund proposal and the lifting of certain sanctions against Tehran. Rubio, who arrived in Abu Dhabi, the capital of the UAE late Tuesday night for a three day tour through the oil-rich Gulf region is on his first high level diplomatic mission to discuss the agreement that will end the four month old war with Iran. He told reporters in Kuwait when he made his second stop of the tour, "We won't do anything to undermine the security our long-standing allies." During the war, Tehran battled two of the most powerful militaries in the world and effectively took control of the Strait of Hormuz. Commercial shipping of oil was "heavily" disrupted and shook the energy markets and world economy. Rubio hosted a working dinner in Abu Dhabi, the capital of the UAE. He was joined by other high-ranking officials including Sheikh Tahnoun bin Zayed Al Nahyan, National Security Advisor Sheikh Tahnoun bin Zayed Al Nahyan, and Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan. Rubio went on to Kuwait, and then to Bahrain. All three countries host American strategic military bases, and they were all hit by Iranian missiles during the conflict. This resulted in civilian deaths. Kuwaiti state news agency KUNA reported that Rubio had held discussions with Kuwaiti Emir Sheikh Meshal Al-Ahmad Al-Sabah about efforts to bolster stability and security. The State Department reported that he also attended the raising of the flag at the U.S. embassy, which had resumed its operations following Iran-linked drone strikes. The American flag, a symbol for liberty, unity and freedom is now proudly flying over Kuwait City. Kuwait is a vital partner in regional security and stability," Rubio said on social media after the ceremony. RUBIO TO? ADDRESS REGIONAL CONCERNS In a meeting held with the UAE President, the State Department reported that Rubio had discussed with him the Memorandum of Understanding with Iran, the safe transit of the Strait of Hormuz and the importance of peace for the region. Rubio reaffirmed U.S. support for the security of the Emirates - a major oil producing country. U.S. allies in the region are particularly concerned that Iran may use $300 billion of the proposed amount to rebuild its military. The agreement does not address Tehran’s ballistic missile capability, a concern to Gulf States, who were hit by Iranian drones and missiles during the war. Rubio, the top American diplomat, has been absent from Iran-related talks in recent weeks. Vice President JDVance led a roundtable discussion with Iranian counterparts at the weekend?in Switzerland. As a result, the UAE, which is a global financial hub that prides itself on its stability in an unstable Middle East, will face significant economic strains. SEPARATE NEGATIONS OVER THE STRAIT OF HORMUZ A diplomat who was briefed about the talks stated that Qatari Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani met with Oman in Muscat to discuss the possibility of initiating talks involving Iran, Iraq and Gulf Arab States on the Strait of Hormuz. These discussions are not part of the U.S. - Iran peace talks. The shipping has started flowing through the Strait of Hormuz. This has led to a fall in the oil price. However, the long-term management and operation of the waterway is still being discussed between Iran, Oman, and other Gulf States. A diplomat said that there were plans to hold regional reconciliation talks in Saudi Arabia, between Iran, Gulf Arab States and possible other regional countries. Rubio's comments during his trip to the region will be closely examined to see how he frames the deal, which many Republicans in Congress believe amounts to capitulation. Rubio has a delicate mission: he must defend an accord preliminary that Trump supports, but he must also address in a credible manner the concerns of Gulf counterparts. Last week, Iran and the United States signed a memorandum outlining 14 points that outlined 'broad agreements to end the conflict. The interim agreement paved the path for 60 days of talks to resolve thornier issues, such as those related to Iran's nuke programme. The central question in the talks is what happens to Iran's highly-enriched uranium. This includes material that has been enriched up to 60% purity. That is a small step away from the 90% required for weapons-grade uranium. Tehran claims its nuclear program is for peaceful purposes. (Francois Murphy, Doina Ciacu, and Katharine Jack in Washington, and Gram Slattery, Michael Georgy, and Don Durfee in Vienna; editing by Don Durfee and Howard Goller; Sharon Singleton, Ali Williams, and Ali Williams; writing by Gram Slattery, Michael Georgy, and Howard Goller; additional reporting by Francois Murph in Vienna)
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Aluminium prices rise to levels seen before the Iran war due to a stronger dollar and Gulf supply expectations
The price of aluminium fell to pre-Iran war levels on Wednesday as the U.S. Dollar strengthened and the Middle East Risk Premium continued to decline. This outweighed any signs of disagreement between Washington and Tehran regarding key terms of a peace agreement. Benchmark three-month aluminum on the London Metal Exchange fell 3.3% to $3,124 per metric ton at 1601 GMT. It had earlier fallen as low as $3,110 and was below the support of the 200 day moving average, which is around $3142. The price of'metal for construction, packaging, and transport has fallen 18% after the Iran War caused Gulf production to be curtailed. This tightened markets outside China, and prices reached a four-year high on June 2. Macquarie analysts said in a recent research note that "sentiment has cooled" as the possibility of the Strait of Hormuz reopening?has increased and high margins are accelerating supply growth elsewhere. After a peak in this quarter, they expect aluminium prices to gradually decline through the end of 2028 due to new capacities in Indonesia, European restarts, and a possible recovery in Middle Eastern production. The U.S. Dollar reached a 13-month peak as investors prepared for Federal Reserve rate increases. The dollar price of metals increases when the U.S. dollar is stronger. LME copper dropped?2.2%, to $13,069.50 per ton. It had previously fallen to its lowest level since May 5, and was below the support of the 100 day moving average. Macquarie believes that a price correction in copper is likely to occur over the medium-term, given the 870,000 tonne visible stock built since 2025. They also forecast a surplus for the coming years. LME zinc dropped 2.1% to $3.419;?lead fell 1.2% to $1.911.50 and?tin declined 2.7% to $49.695. Nickel fell by 2.0% to reach $16,820 after hitting a three-month low at $16,660. Polina Devitt is the reporter. (Additional reporting by Solomon Cefai, editing by Mark Potter and Jonathan Ananda; Joe Bavier was the editor.)
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UK 10-year gilt rates fall to a three-month low due to oil price drop
British 10-year bond rates fell to a 3-month low on Wednesday, as part of an international government bond rally. Oil prices had fallen to their lowest levels since before the start of the Iran war. According to LSEG, the 10-year gilt 'yield', which moves inversely with price, reached its lowest level since March 18 when it hit 4.676%. This was at 1408 GMT. It surpassed a previous record low of 4.679%, set on April 8 The yield on 10-year U.S. Treasuries was 4.69% late on Wednesday. This is in line with what happened in the market. The yields on longer-dated bonds have reached their lowest levels since April. Brent crude oil fell by 4%, the lowest price since the beginning of the conflict in February. As more oil tankers started to leave the Strait of Hormuz, the losses increased. The PS2.9 trillion ($3.8 billion) market for government bonds in Britain has not shown any signs of concern about reports that Andy Burnham could replace Finance Minister Rachel Reeves, who is almost certain to be the next Prime Minister. Investors await details of Burnham's plans for borrowing, taxation and spending. "Our concern remains that there are no additional funds to increase public expenditure. Mohit Kumar is the chief European economist of Jefferies. He said that tax increases are unlikely to be effective and that efficiency savings will never work. Kumar said Jefferies expects the yield curve for gilts to steepen and that they will "stay away" (from long-dated gilts). Investors now expect a Bank of England rate increase of between 1 and 2 bps by year's end, down from one to two last week, as lower oil costs are expected to curb inflation pressure. The 'Debt Management Office' reported that the auction of benchmark 5-year gilts, worth PS4,25 billion, was conducted without incident Wednesday. Investors bid 3.47 times the amount offered. The 5-year yield in the cash market fell to a 2-month low of 4,242%, and was down last 6 bps for the day.
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Debswana, the central bank of Botswana, plans to increase diamond production by 20% in 2026.
A central bank official said on Wednesday that Debswana Diamond Company in Botswana expects to increase diamond production this year by 'about 20%. This could be a boost for an economy trying to recover from the 'long downturn of the global diamond market. Debswana, a joint venture between Botswana's government and De Beers which produces 90% of the diamonds produced in the country, plans to increase production to 18 million carats by 2026. Production was reduced sharply to 15 million carats the previous year due to a weak market. Thato Mokoti said at a press conference that the increase in production would drive the economy this year. A spokesperson for the company confirmed that an increase in production is planned. The diamond industry accounts for approximately a third (or three quarters) of Botswana’s fiscal revenues and about three-quarters (34) of its foreign currency earnings. This leaves the economy highly vulnerable to fluctuations in global demand. The downturn, which began in 2023 and was triggered by the economic uncertainty as well as increased competition from lab-grown stone, forced producers to reduce production. Debswana cut output by 16 percent last year while Botswana’s economy has contracted for the past two years. In February, Finance minister Ndaba Gaolathe stated that the economy would rebound to a growth rate of 3.1% by 2026. This was largely due to a recovery in both diamond production and demand. Minerals and energy Minister Bogolo Joy Kenewendo said on 'Tuesday' that Botswana is seeing a soft rebound in demand for diamonds in key markets like the U.S. Debswana produced around 24 million carats per year before the recession. Andrew Motsumi, the Managing Director of Debswana, told 'the media' on Tuesday that Debswana is restructuring in order to become more leaner and efficient. The company plans to reduce annual operating costs by one third by 2028 to 6 billion Pula ($416 millions).
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Gold falls to a seven-month low after dollar firms and rate hike bets increase
Due to the pressure of a stronger dollar and rising expectations for interest rate increases, gold prices dropped to a "more than seven-month-low" on Wednesday. Spot gold dropped 2.5%, to $4.006.29 per ounce at 11:40 am EDT (1540 GMT), following its lowest price since November 2025. U.S. Gold Futures fell 3% to $4 023.30. Dollar-priced gold became more expensive to holders of other currencies as the U.S. currency firmed. The U.S. dollar has firmed, making bullion priced in dollars more expensive for holders of other currencies. The market is pricing in a rate increase as early as September, due to a hawkish Fed. A surging dollar, at a high of?13 months, combined with lower expectations for inflation are putting pressure on precious metals," Tai Wong, an independent trader, said. He added that "for gold, there's support at just under $3.900, and central bank purchases are continuing, so it is unlikely to collapse, but expect an extended period of consolidation, as gold trading is no longer in favor." Investors are less interested in gold when interest rates increase because it does not offer a yield. Gold spot, which reached a record high of $5,594.82 in late January, is now down more than $1500 per ounce. ING analysts have cut their gold predictions. They now expect prices to average $4.300 per ounce during the third quarter of 2026, and $4.600 in the final quarter, compared to their previous projections. Investors are also waiting for?U.S. The Fed's preferred measure of inflation, Personal Consumption Spending, is due Thursday. Lukman Otunuga is a senior research analyst with FXTM. He said that more hawkish signals or economic data supporting the argument for higher rates could translate into further downside risks for gold. Spot silver, among other metals fell 5% to $58,96 after reaching its lowest level since December 2025. Standard Chartered stated in a 'note' that exchange-traded product outflows leave?silver susceptible to volatility in the near term, but a market undersupplied suggests a price improvement in the coming month. Palladium fell 5.2%, to $1173.23, and platinum lost 4%, to $1586.55.
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Chemours settles chemical release lawsuit with US Justice Department for $450 million
The U.S. Department of Justice announced on Wednesday that The Chemours Company had agreed to a $450-million?settlement for the'release of forever chemicals' in West Virginia, North Carolina and New Jersey. According to a DOJ statement, the multi-state settlement includes a $22.5-million civil penalty as well as $90-million in funding for controlling per- and polyfluoroalkyl chemicals, also known by their acronym PFAS. The statement said that this is the "first comprehensive settlement" by the federal government in order to "resolve enforcement complaints over pollution by a forever chemical manufacturer." According to the U.S. Government's complaint, three Chemours plants in West Virginia and New Jersey allegedly discharged PFASs into three different rivers. Chemours stated that the settlement resolved?federal complaints related to PFAS releases and other alleged noncompliance measures, primarily in its Washington Works Fayetteville Works Chambers Works facilities. The settlement acknowledges that Chemours began planning and implementing remedial measures and operational improvements at its facilities. It also?contains additional actions the company will be taking to mitigate future emission and enhance existing programs?, the company stated?in a press release. Chemours shares rose by 5.4% during the morning trading. Researchers have linked PFAS (also known as forever chemicals, because they degrade slowly in the environment) to a range of health issues. As part of the settlement, Chemours also announced that it had settled with the West Virginia Rivers Coalition in a lawsuit filed by the coalition alleging violations of certain discharge limits at Chemours Washington Works facility for less than $1 million. Reporting by Katharine J. Jackson in Washington, Daphne Psaledakis and Arunima K. Kumar in Bengaluru. Editing by Doina C. Nickel and Rod Nickel.
The industry increases pressure on the EU to reduce energy prices
On Wednesday, top business leaders called on the European Union to take urgent action to lower energy prices. They said that this was crucial for European industries to be able to compete with the U.S.
The message from the industries was timed to land just before EU leaders meet in a Belgian Castle on Thursday for a "retreat". They will discuss how Europe can compete with China and America economically.
In a written declaration, CEOs from the city of Antwerp stated that the next five years would be the most challenging in Europe's industrial history.
The outcome of the crisis is not predetermined, even though it is dire. They told EU leaders that if they act, we can prevail. They called for emergency measures in Europe to reduce energy costs and increase demand for products "made in Europe".
The statement was signed?by hundreds of CEOs including the world's largest chemical producer BASF, Europe's largest steel company ArcelorMittal and several energy groups.
COSTLY ENERGY
Jon?Morrish is the CEO of Heidelberg Materials for Europe. When asked what his message was to EU leaders, he replied: "Number 1, energy prices must be brought down. They need to take us seriously and realize how this is affecting Europe's competitiveness.
He said that Cement-maker 'Heidelberg', whose main market is Germany, had begun to shift some investments outside of Europe because of high energy prices.
Conrad Keijzer, CEO of Swiss specialty chemicals maker Clariant, asked: "Why is Europe so far behind the rest?of the world?" It's all about the energy situation."
Many energy-intensive industries saw their bills increase after the loss of Russian gas imports due to Moscow's full-scale invasion in Ukraine 2022. The EU data also shows that power prices are affected by a number of factors, including crowded power grids, taxes, and the EU CO2 emissions tax. For industries in Europe, power costs are double what they are in the U.S. or China.
High Taxes
Ursula von der Leyen, the European Commission's chief, told the Antwerp Summit that EU countries need to improve their power grids. She also made several other proposals to lower energy bills.
While energy prices are falling, taxes on energy in the United States are rising. The taxes paid by industry on electricity are up to 15 times more than the taxes levied on gas. She said that this is "just wrong".
No Quick Fix
Some companies admit that there is no easy fix. This is partly because it will take many years to modernise power?grids so that low-carbon energy can be freely distributed across the EU.
In the EU, the electricity system is set up so that the price of power is determined by the last power station needed to meet the total demand. Many times, this is a natural gas plant, leaving consumers exposed to gas costs that are higher in the U.S.
The political will to change this system is lacking. When they updated EU energy rules in 2024, EU governments decided not to redesign the market. Five years have passed since they failed to get the necessary unanimous approval to reform EU-level tax rules on energy to give low-carbon sources a competitive advantage.
Philippe Kehren is the CEO of multinational chemicals company?Solvay. He said that industry leaders should intervene to ensure stable electricity prices.
I don't think there is any other choice, to be honest. "Industries cannot cope with high, volatile electricity prices," said he. Kate Abnett, Alex Chituc, Jan Strupczewski, Ingrid Melander and William Maclean contributed to the report. Mark Porter, William Maclean and Aurora Ellis edited.
(source: Reuters)