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Gold prices rise on weaker dollar and rising Middle East tensions
Gold prices rose Thursday on the back of rising tensions in Middle East, a weaker Dollar, and better-than-expected U.S. Inflation data. As of 0202 GMT, spot gold was up 0.6% to $3,372.46 per ounce. U.S. Gold Futures rose 1.5% to $3393. The U.S. Dollar Index fell to near a two-month low making greenback priced bullion more appealing to overseas buyers. Kelvin Wong is a senior analyst at OANDA. He said that the weakness of the dollar index was a powerful catalyst. Gold faced resistance at $3.346, but the breakout bullish triggered technical selling. The rising geopolitical risk aided the safe-haven assets. President Donald Trump announced on Wednesday that U.S. military personnel would be moved out of Middle East because of increased security risks due to increasing tensions with Iran. In the meantime, U.S. consumer price data revealed that gasoline prices were lower than expected, but inflation could increase due to import tariffs. Trump has again called for the Fed to cut rates significantly. Wong stated that the CPI data is not alarming and could lead to the Fed acting more quickly than expected. The Fed will meet on June 17-18. Traders are now expecting a rate cut of 50 basis points by the end of the year. They await U.S. Producer Price Index data due at 1230 GMT for more clues. Trump also said that Washington and Beijing agreed on a framework for restoring a fragile truce to the U.S. China trade war. This could have avoided higher tariffs. Trump said he would be willing to extend the deadline of July 8 for trade negotiations with other countries before U.S. tariffs increase, but he did not anticipate such a requirement. (Reporting by Anmol Choubey in Bengaluru; Editing by Sherry Jacob-Phillips) (Reporting and editing by Sherry Jacobi-Phillips in Bengaluru)
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Australian shares fall as mining losses offset banks' energy gains
Australian shares were mostly unchanged on Thursday as strong performances by banks and energy stocks partially offset the positive performance of miners. Meanwhile, President Donald Trump’s hint to extend the deadline for trade negotiations eased fears over impending tariff increases. As of 0108 GMT, the S&P/ASX 200 index remained at 8,593 point. The benchmark closed Wednesday at a record high of 8,592.1. Overnight, Trump indicated that he was open to extending the deadline of July 8 for trade negotiations before U.S. higher tariffs go into effect. However, he doubted whether an extension would be needed. China and the United States - Australia's two top export partners - have reached a framework agreement, which has boosted investor confidence for a lasting solution between the superpowers, and eased fears of further disruptions to the market. The lack of specifics could lead to future disputes over tariffs. If the current momentum continues, Chinese export-dependent miners will have their worst session since June 2. BHP, Rio Tinto, and Fortescue all dropped between 0.9% to 2.4%. Energy firms have bucked the trend of gloomy news, rising 1.4% as oil prices reached a new high. The sub-index looks set to post its fourth straight session of gains. Woodside and Santos, major index companies, both gained 1.5% and 0.8% respectively. The "Big Four" banks grew between 0.1% to 0.4%. Gold stocks rose nearly 2% in tandem with bullion price increases. The shares of metals mining company Northern Star Resources rose by about 1%. Qantas, one of the leading performers on the benchmark index with a 4.3% gain, was the most notable corporate news. This came a day after Qantas announced that it would be closing its Singapore-based Jetstar Asia budget airline due to increased costs and competition. The Australian Defence Minister expressed his confidence in AUKUS, despite Trump's administration conducting a formal review. The benchmark S&P/NZX50 index for New Zealand fell 0.1% to 12,592.86.
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Worries about escalating tensions between the US and Iran cause oil prices to rise
The oil prices rose on Thursday, reaching their highest level in over two months after U.S. president Donald Trump announced that U.S. personnel would be moving out of the Middle East. This sparked fears about the potential disruption to supply if tensions escalated with Iran. Brent crude futures increased 15 cents (0.2%), to $69.92 a bar at 1230 GMT. U.S. West Texas intermediate crude rose 22 cents (0.3%), to $68.37. Brent and WTI both surged over 4% on Wednesday, reaching their highest levels since early April. Trump said on Wednesday that U.S. personnel was being relocated out of the Middle East, because "it could potentially be a dangerous area." He added that the United States wouldn't allow Iran to possess a nuclear bomb. According to U.S. sources and Iraqi ones, it was reported on Wednesday morning that the U.S. will be preparing to evacuate its Iraqi Embassy and allow dependents of military personnel to leave Middle East locations due to increased security risks. Iraq is OPEC’s second largest crude producer after Saudi Arabia. Saudi Arabia is the No. Officials from the United States have said that military dependents can also leave Bahrain. Aziz Nasirzadeh, Iran's minister of defense, said Tehran would strike U.S. military bases in the area if nuclear negotiations fail and conflict with Washington arises. Trump has repeatedly warned Iran of bombings if it fails to reach a new deal on nuclear energy. Oil prices were also boosted by optimism about a possible trade agreement between the U.S.A. and China that could increase energy demand in two of the world's largest economies. The Energy Information Administration reported that crude oil inventories in the United States fell by 3.6 millions barrels, to 432.4 million last week. The analysts polled had predicted a draw of two million barrels. (Reporting and editing by SonaliPaul in Houston, ArathySomasekhar)
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The Information reports that OpenAI has discussed raising funds from Saudi Arabian and Indian investors.
The Information reported Wednesday that OpenAI, the maker of ChatGPT, has spoken to Saudi Arabia's PIF and India's Reliance industries, as well as existing shareholders United Arab Emirates' MGX, about its 40 billion financing. According to the report, people who are familiar with the fund-raising said that the investors could each invest at least hundreds millions of dollars. SoftBank, OpenAI's main financier, is seeking to raise additional funds for its ambitious Stargate infrastructure plan and model development. Two sources familiar with the matter said that OpenAI CEO Sam Altman had met earlier this year with India's Minister of IT and discussed India’s plan to create a low-cost AI eco system. Altman then planned to visit UAE in order to raise funds with Abu Dhabi Investment Group MGX. The Information reported that Microsoft-backed startup had also discussed raising $100 million each at Coatue and Founders Fund for the fundraise. The company also plans to raise $17 billion more in 2027. Could not confirm immediately the report. OpenAI, PIF Reliance Industries MGX SoftBank and SoftBank have not responded to our requests for comment.
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White House official: Trump will sign resolutions that nix California's EV regulations
A White House official confirmed that President Donald Trump would sign three congressional resolutions Thursday, which will bar California's electric car sales mandates as well as diesel engine regulations. This confirms an earlier report, citing auto industry and House aides. Trump signs resolutions of disapproval, under the Congressional Review Act, to block California's landmark proposal to end gasoline-only vehicle sales by 2035. This plan has been adopted and endorsed by 11 states representing a quarter of the U.S. automobile market. Trump will sign a resolution repealing a waiver granted in December by the U.S. Environmental Protection Agency, under former Democratic president Joe Biden. This waiver allowed California to mandate at least 80% electric vehicles by 2035. Sources said that the White House invited a number of auto industry officials to join them at Thursday's signing. Trump will sign a congressional resolution to rescind EPA approval for California's plan to increase the number of zero emission heavy-duty trucks by 2023, as well as another resolution regarding California's low NOx regulation, which is a low nitrogen oxide regulation, on heavy-duty highway vehicles and off-road engines. The historic signing of the bill today is a significant victory for American manufacturers, consumers and energy security in the United States. "We thank President Trump for fulfilling his promise to end these extreme mandates, and to ensure that every American has the freedom to choose their vehicle," American Petroleum Institute CEO Mike Sommers stated. The signing of the agreement is a victory for General Motors and Toyota, as well as auto dealers and other automakers who heavily lobbied to stop the rule. It's also a blow to California, environmental groups, and others who say that the requirement are vital to ensure cleaner vehicles and reduce pollution. GM stated that the move will help align emission standards with market realities. California announced in 2020 a plan to require by 2035 that at least 80% new cars sold are electric, and up to 20% of them plug-in hybrids. California Governor Gavin Newsom said he would challenge the repeals at court. He claimed that the action taken by Congress was illegal and estimated to cost California taxpayers $45 billion more in health care costs. California has been granted more than 100 waivers since 1970 under the Clean Air Act. The Alliance for Automotive Innovation (representing GM, Toyota and other automotive companies such as Volkswagen, Hyundai Stellantis, Volkswagen, Hyundai Stellantis, etc.) had previously praised this repeal. John Bozzella said that the EV mandates never could have been met. In reality, to meet the mandates it would be necessary to divert finite capital away from the EV Transition in order for Tesla compliance credits. The latest measures taken in recent months to target electric vehicles are listed below. Separate legislation passed in May by the U.S. House of Representatives would eliminate a $7.500 tax credit on new EVs. It would also impose a $250 annual fee for EVs to cover road repair costs, and repeal vehicle emission rules intended to encourage automakers to build more EVs. The bill would also phase out EV batteries production tax credits by 2028. Reporting by David Shepardson and Steve Holland; Editing and proofreading by Stephen Coates
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Colombia's Petro has threatened to implement a referendum on labor reform as the deadline for the Congress looms.
The leftist president of Colombia, Gustavo Petro, signed a decree on Wednesday to hold a vote on labor reforms. This was an attempt to get the Senate to take a vote on this issue before the session ends later in the month. The referendum proposal seeks a limit on the number of hours that can be worked in a day, an increase in the surcharge from 75% to 100% for work done on Sundays and holidays and the requirement for drivers to pay social security contributions. The Senate is debating the modified reform of labor after rejecting in May a 12-question referendum version in a close 49-47 vote. Petro claimed that this vote was fraudulent. The current legislative session ends on 20 June. Petro and his Interior Minister, Armando Benedetto, stated that the referendum will be cancelled if the reform passes. To be valid, each measure must be approved by a majority of 13.5 million voters - a third the Colombian electoral roll - in order to hold if voted on. The opposition parties claim that Petro's decree amounts to a coup and violates Colombia's Constitution. It also destroys the separation between the three branches of the government. Analysts warn that, in the meantime, the decree may face legal challenges including at the Constitutional Court. The majority of social and economic reforms promised to Petro, who was elected 2022 on promises to end centuries of inequality in Andean countries, have been rejected by legislators. Colombia will hold presidential and legislative elections in the first six months of 2026. (Reporting and writing by Carlos Vargas, Nelson Bocanegra and Natalia Siniawski. Editing and reviewing by Gabriel Araujo and Kyra Madry.
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CFO of Chile's Codelco says the company will focus on public-private partnership to boost production and finances.
Alejandro Sanhueza, CFO of Chile's Codelco (the world's biggest copper producer), said that the company will increase its public-private partnership efforts in order to improve its finances and develop new projects, as part of efforts to boost production. The energy transition is driving a global demand for copper and Lithium. This has led to a skyrocketing of the market at a moment when Codelco struggles to increase production after it hit quart-decade lows in 2023. The CFO's comments, which are the strongest yet, show that the state-run firm will focus on private funding to boost growth. Sanhueza stated that public-private partnerships would be a "pillar for growth". They are not intended to fund overhaul projects or existing operations, in order to comply with nationalization regulations of the company which prohibit it from accepting private money into its mines. Sanhueza wrote in response that "Greenfield Initiatives (new projects), are an important part of our strategy for growth and a way to continue partnerships with other parties." He added that this would also help to diversify risks. Our exploration partnerships enable us to attract additional financing and production capacity. This allows us to accelerate the value generation using resources that are not available to Codelco. Codelco has also reached agreements with Rio Tinto, BHP and other companies to explore new copper mines. Sources with knowledge in the matter describe these as promising. Codelco has already formed a partnership with Freeport McMoRan in the El Abra Mine and owns a five-percent stake in Anglo American Sur. It also bought a 10% stake from Enami, a small state-owned firm. Sanhueza stated that another goal is the building of joint infrastructure, facilitating access to new technologies, or minimising environmental impacts. Codelco announced a groundbreaking agreement with Anglo American earlier this year. The company claimed that it would increase production of copper by 120,000 tons per year over a 21-year period. Sources claim that the company wants to finalize this agreement by September. Sanhueza stated that the company will also be increasing its own exploration budget, which is expected to increase to an annual average of $150 millions in 2025-2029. Sanhueza stated that Codelco had a large stock of mining assets, which was a privilege for the industry. This collaboration allows us to better utilize these resources which complement our own projects. (Reporter Fabian Andres Cambero, Editing by Alexander Villegas & Sandra Maler).
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World Bank will end nuclear energy ban, but still debate upstream gas
Ajay Banaga, president of the World Bank, said that its board had agreed to lift a ban on financing nuclear energy projects for developing countries. This is part of an effort to meet the growing demand for electricity. Banga sent an email outlining the bank's new energy strategy to its staff following what he described as a constructive meeting with the board. Banga said that the board had not reached a consensus on whether or not the bank should be involved in upstream natural-gas projects. He wrote, "This will need further discussion." In 2017, the global development bank, a lender at low interest rates that lends to countries to build everything from railroads to flood barriers, announced it would cease funding upstream oil projects by 2019. However, it will still consider gas projects for the poorest countries. In 2013, it decided to stop funding nuclear projects. Since taking office as the Bank's president in June 2023 the Banga government has pushed for a change in its energy policy, saying the bank should adopt an "all-of-the above" strategy to help countries meet their rising electricity demands and achieve development goals.
Portugal wants European regulators to lead Iberia's outage investigation
Portugal's acting energy minister said that it wants the European energy regulators, ACER, to conduct an independent investigation to determine the cause of the massive power outage which brought Spain and Portugal almost to a standstill in the last month.
Maria da Graca Carvalho stated that Prime Minister Luis Montenegro wanted an independent investigation conducted by the European Agency for the Cooperation of Energy Regulators in order to supplement the technical report prepared by the European Network of Transmission System Operators ENTSO-E.
Carvalho, in response to questions, said that "ACER is a suitable entity for coordinating any external evaluation process. It could bring more transparency, impartiality, and confidence to the conclusions."
In a written statement, the minister said that "there is no evidence at this time" to suggest that cyber attacks, human error or sabotage could have been the cause of the outage.
Last week, Spain's Energy Minister said that a sudden loss of electricity generation at a Granada site, followed by outages in Badajoz, Seville and seconds later, caused the unprecedented blackout in Spain and Portugal.
Iberia is behind the EU target of all countries having 15% of their energy systems interconnected with the wider European network by 2030. Iberia's contribution remains at only 3%.
Carvalho stated that Portugal, despite the reasons for the blackout, was considering how to improve the resilience and security in the national electric system. This is a strategic imperative. (Reporting and editing by Andrei Khalip, Jan Harvey, and Sergio Goncalves)
(source: Reuters)