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Copper reaches six-week high amid hopes for new US-Iran Peace Talks
Prices of copper rose to a six-week high on Wednesday as optimism grew over the possibility of another round of talks between Iran and the United States to end the conflict. The benchmark copper price on the London Metal Exchange reached $13,392.5 per metric ton, its highest level since March 2. At 1605 GMT, it was down by 0.1% to $13,275 per ton. Copper prices have been pushed down by profit-taking, triggered in part by the stronger dollar. The dollar's rise makes metals priced in dollars more expensive for those who hold other currencies. Traders said that the mood and volume of industrial metals was buoyant. U.S. president Donald Trump stated on Tuesday that talks to end Iran war in Pakistan could resume within the next two day after the weekend's collapse led Washington to impose an Iranian port blockade. Britannia Global Markets stated in a report that "risk appetite has returned following a temporary ceasefire last week. This is reinforced by reports that 'Washington and Tehran will be looking to arrange a second round in the next few days. The Yangshan Copper Premium, which is a measure of China's appetite to import copper, highlights expectations of a stronger demand. It has risen 270% to $74 per ton since the end January, and is now at its highest level since June last. The Chinese industrial metals market will be able to gauge the demand for industrial metals based on data that is due later this week. The price of copper and nickel is influenced by concerns about sulphur shortages in the Middle East, which are used to process these metals. Middle East is responsible for 24% global sulphur. It's a by-product of oil and natural gas refining. Last year, its aluminium production accounted for nearly?7 millions tons or 9% global supplies. Aluminium prices are at a four-year high. Aluminium rose by 1.5%, to $3.615 per ton. Zinc rose by 1.7%, to $3.398, while lead climbed 1.6%, to $1.966. Tin fell 1.2%, to $49.700, and nickel slid 0.3%, to $18,150.
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Gold prices fall as attention turns to US-Iran developments
Investors analyzed the latest signals on the U.S.-Iran issue and how they might affect interest rates. As of 11:22 am, spot gold was down by 0.7% to $4,807.34 an ounce. ET (1522 GMT), having reached its highest level since March 18, earlier in the day. U.S. Gold futures dropped 0.4% to $4.830.60. Kitco Metals' senior analyst Jim Wyckoff said, "Gold and silver are only experiencing some mild and normal profit-taking following overnight highs." Gold prices are rising on the back of increased risk appetite, and a selling off during periods of risk aversion. This is contrary to gold's role as a safe haven. "Traders are focusing on the impact of tighter monetary policies and inflation pressures,"? he said. The U.S. president Donald Trump said that the war with Iran is close to being over. He told the world to prepare for "an amazing two days" as the chief of the Pakistani army, the mediator in the conflict, arrived in Tehran to try to prevent another conflict. Shipping through the Strait of Hormuz was 'constrained', and oil prices did not change much. The strait remains closed 45 days after the Revolutionary Guards of Iran declared it closed. Despite a two week ceasefire, the future of the transit is uncertain. Chicago Fed President Austan Goolsbee stated on Tuesday that the Federal Reserve may have to wait until 2027 before cutting interest rates, if a 'prolonged period of high oil prices' from the Iran War delays the inflation's progress toward the U.S. Central Bank's 2% target. Markets currently expect a rate cut in the U.S. this year. Gold's appeal as an inflation hedge is diminished by higher interest rates. Silver spot remained at $79.58 an ounce while platinum increased 0.2% to 2,108.79. Palladium fell 1.2% to $1,568.15. Ashitha Shivaprasad reported from Bengaluru, and Jan Harvey edited the story.
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Gold prices fall as attention turns to US-Iran developments
Gold fell on Wednesday, after reaching a peak of one month. Investors were assessing the latest signals regarding the U.S./Iran situation to determine what it could mean for interest rates. As of 8:47 am, spot gold was down by 0.6% to $4,809.15 an ounce. ET (1247 GMT), having reached its highest level since March 18, earlier in the day. U.S. gold futures fell 0.4% to $4831.60. Jim Wyckoff is a senior analyst with Kitco Metals. He said, "Gold and Silver are only experiencing some mild and normal profit-taking following overnight highs." Gold prices are rising on the back of a?improved appetite for risk and falling during periods of risk aversion, which is contrary to its traditional role as a?safe haven. He said that traders are more concerned with the impact of tighter monetary policy and inflation pressures. U.S. president Donald Trump said that talks with Iran could resume soon and lead to a deal. He told the world to be on the lookout for "an amazing two days", as U.S. forces who imposed a blockade stopped vessels from leaving Iranian ports. As shipping through the Strait of Hormuz was restricted, oil prices rose. The strait remains closed 45 days after the Revolutionary Guards of Iran declared it closed. Despite a two-week ceasefire, the future of the transit is uncertain. Chicago Fed President Austan Goolsbee stated on Tuesday that the Federal Reserve could have to wait until 2027 before reducing interest rates, if the high oil prices caused by the Iran War continue to delay the inflation's progress toward the 2% target set by the U.S. Central Bank. The market currently believes that there is a 31% probability of a rate cut in the U.S. this year. Gold's appeal as a hedge against inflation is diminished by higher interest rates. Silver spot fell by 1.2%, to $78.61 an ounce. Platinum dropped 0.1%, to $2,101.82. Palladium rose 0.3% to $1,591.60. Ashitha Shivprasad, Bengaluru reporting; Jan Harvey editing.
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IMF warns against large fuel subsidies in response to war-driven energy shock
In its Fiscal Monitor report, released on Wednesday, the International Monetary Fund stated that the war in the Middle East had intensified the strains already present in an already fragile fiscal situation. Higher interest rates and rising energy prices have already fueled calls for assistance from developing countries and emerging markets. Rodrigo Valdes is the new head of fiscal affairs at the IMF. He said that countries should avoid fuel subsidies in order to help their citizens cope with an oil shortage and a corresponding rise in energy prices. He said that targeted, temporary cash transfers would be the better option. We don't have any oil. "We don't have oil." "Energy needs to be more costly for everyone so that we can adjust and consume less," Valdes said in an interview. The IMF cut its growth forecast on Tuesday due to energy price spikes caused by war and disruptions in supply. It warned that the global economic system could be pushed to the 'edge of recession' if the conflict intensifies and oil prices remain above $100 per barrel until 2027. Valdes stated that "you can pass on (higher energy costs) and do other things to help." "It is a global shock, and if countries suppress price signals, the global price would be higher." It is very important to send price signals so that demand can be adjusted. Valdes stated that the impact of the war would be determined by the export controls, damage to the energy infrastructure, and the ability of other countries to increase oil production. He said that once conditions stabilized it was important to stay focused on the longer-term issues, as public debt increased, primarily due to permanent spending on entitlements or reduced revenues in many of the world's largest economies. According to the IMF’s Fiscal Monitor, global government debt will reach 93.9% in 2025. This is up two percentage points compared to 92% one year prior. It will also be expected to reach 100 percent by 2029. That’s a full year sooner than was predicted just a few months ago. The report stated that this would be the highest level of government debt since World War II. The report said that the government debt would continue to rise and could reach up to 102.3% GDP by 2031. The IMF also said that interest payments had also increased sharply. They will reach nearly 3% GDP by 2025, up 2% from four years ago. Valdes warned about emerging risks. He said that hedge funds were less able to "hold debt on the long term." The duration of debt has also decreased, which means that short-term rates are more easily transmitted to debt dynamics. In a blog that accompanied the report, the IMF noted other challenges, including higher security costs, spending on energy and climate change, and increasing interest rates at a time where revenues have not kept pace. The IMF warned that trade and financial fragmentation would further stifle growth and increase borrowing costs. Political instability could also undermine reforms and revenue collections. Financial conditions could be tightened quickly by sudden changes in the markets, such as in AI stocks. Valdes said that countries should begin working on fiscal consolidation as soon as the immediate crisis is resolved. He said that while some countries are taking the issue seriously, many others have not yet developed a clear plan. "We are not in a crisis... but the longer you delay, the greater the effort you will need and the greater the chance of a disorderly consolidating later." Reporting by Andrea Shalal Editing done by Shri Navaratnam
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Putin criticizes Russia's top officials over economic contraction
On Wednesday, Russian President Vladimir Putin scolded top officials after the economy shrank by 1.8% during the first two months of the year. He asked them to 'come up with new measures that will boost the economic growth. The tight monetary policies of the central bank and Western sanctions that target the oil revenues of the country are the main reasons for the slowdown in Russian growth. The International Monetary Fund has raised its estimate of Russia's GDP growth in 2026 from 0.8% to 1.1% after the Middle East crisis spiked oil prices in March. The government has forecast growth of 1.3% for this year, but warned it could revise that figure lower later this month because of the lacklustre performance of the economy at the beginning of the year. Putin said that calendar factors alone were not enough to explain the contraction, telling his top economic officials including Maxim Oreshkin and Elvira Nabibullina of the central bank, as well as Finance Minister Anton Siluanov. "I would like to know why macroeconomic indicators are falling short," Putin said. He added that they were even falling short of officials' forecasts. Putin said he was expecting proposals for "additional?measures aimed at revitalizing growth," that would promote 'business initiatives and redirect skillful labour into sectors with greater growth potential. Putin stated that the government has?also prepared?a set of measures to reduce state?budget dependency on volatile global commodity market revenues, but did not provide any details. (Reporting and writing by Vladimir Soldatkin, Gleb Bryanski and Dmitry Antonov; Editing by PhilippaFletcher).
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Copper reaches six-week high amid hopes for new US-Iran Peace Talks
Prices of copper rose to a six-week high on Wednesday as optimism grew over the possibility of another round of talks between Iran and the United States aimed at ending the war. The benchmark copper price on the 'London Metal Exchange reached $13,392.5 per metric ton, its highest level since March 2. In official rings, it traded at $13,227, down 0.4%. The lower copper prices were attributed to profit-taking by traders, triggered in part by the stronger dollar. When it increases, metals priced in dollars become more expensive for those who hold other currencies. Traders said that the overall sentiment and volume of industrial metals was positive. U.S. president Donald Trump announced on Tuesday that talks to end the Iran War could resume in Pakistan within the next two day after the weekend's collapsed negotiations led Washington to impose an Iranian port blockade. Britannia Global Markets stated in a report that "risk appetite has returned following a temporary ceasefire last week. This is reinforced by reports Washington,?Tehran and China are planning to hold a second round in the next few days." The Yangshan Copper Premium, which is a measure of China's appetite to import copper, highlights expectations of a stronger demand. It has risen 270% to $74 per ton since the end January, and is now at its highest level since June of last year. The Chinese industrial metals market will be able to gauge the demand for industrial metals based on data that is due later this week. Due to disruptions in Middle East supplies, copper and nickel are being supported by fears about sulphur shortages. Middle East is responsible for 24% global sulphur. It's a byproduct from oil and gas refineries. Last year, its aluminium production amounted at nearly 7?million tonnes or 9% global?supplies. Aluminium prices are at a four-year high. Aluminium rose 0.1% to $3,565 per ton. Zinc rose 1.2%, to $3,382, while lead climbed 0.8%, to $1,951.5. Tin fell 0.3%, to $50,175; and nickel grew 0.6%, to $18,385.
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Trump claims he told China's Xi to not give Iran weapons
Donald Trump told Fox 'Business 'Network that he asked Chinese President Xi Jinping a question in a letter, asking him not to supply weapons to Iran. Xi replied that China did not supply tehran. In the Tuesday interview, Trump did not specify when the letters had been exchanged. He threatened to impose an immediate 50% tariff on countries that supplied Iran with arms last week. "I sent him a note asking him to not do that and he replied with a message saying that he is not doing it," Trump said on?FBN’s "Mornings with Maria". He said he didn't expect changes to the global oil markets due to the war against Iran or Venezuelan political developments would affect the dynamics of the planned meeting between him and Xi in the next month. "He is someone who needs oil." We don't," Trump said. In a later Truth Social post, Trump also stated that he would "permanently"?open? the Strait of Hormuz. China was extremely happy with this. "I'm doing it for the World, too," Trump wrote. He added: "President Xi is going to give me a huge, fat hug when I arrive in a couple of weeks." Trump's statement that shipping through the Strait of Hormuz is still restricted was not immediately understood. The White House didn't immediately respond to an inquiry for clarification about the president’s post. Even with the current two-week ceasefire, the future of the waterway is uncertain 45 days after Iran's revolutionary?Guards closed the strait, effectively blocking 20% of the world's oil and liquefied gas shipments. Sources?said that traffic is only a fraction of the 130 daily crossings before the war. Trump said that talks between the United States and Iran to end the war may resume this week after ending over 'the weekend with no agreement. The?U.S. The?U.S. (Reporting and editing by Andrew Heavens, Hugh Lawson and Humeyra Pamuk)
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Four dead in Turkey after second school shooting within two days
The local governor reported that a student killed?at least?four people, including fellow students, and injured at least?20 other at a middle-school in southeast Turkey on Wednesday. This was the second school attack to occur in the country in just two days. Governor Mukerrem Unluer said that three?students? and one teacher?died in the incident which occurred in Kahramanmaras province. The attacker died in the attack. The governor said that the student, who was in eighth grade at the school, had hidden their father's guns inside a backpack and used them to commit the attack. In Turkey, school shootings are rare. On?Wednesday, television footage showed ambulances arriving to the school where crowds and police had gathered by the gate. Justice Minister Akin 'Gurlek'said on X a probe was opened into the attack. A former student opened fire on a school, in the province of Sanliurfa (southeast Turkey), wounding at least 16 people including teachers and students. He then killed himself.
Helen Jewell explains why gold and defense stocks fell as the war broke out.
Investors tend to raise money first, and then ask questions. Investors who are aware of this phenomenon will not have a problem. It's a great opportunity.
Gold dropped by nearly 4% in the four days following the first U.S./Israeli strike on Iran. So did European defence stocks. It seems strange. Gold has been historically a safe investment in turbulent times. Conflicts are usually the driving force behind military equipment demand.
This is due to investor positioning, or more specifically, crowded trading.
Many fund managers will execute a “program trade” to de-risk quickly and mechanically in order to raise money when a market-jolting, large event occurs.
Instead of selling only certain positions, they try to raise cash by reducing a percentage fixed across all their holdings. The positions that have increased the most are sold most. This is why, when magnified across the market, assets that should benefit from an event can fall the fastest.
CROWDING OUT
In the last few weeks, gold has been the most obvious example.
BlackRock data shows that in 2025, a record amount of money will flow into commodity ETPs. BlackRock data shows that $83 billion of the $100 billion in new money went to gold products. In January, $15.5 billion was added to gold ETPs - the largest monthly inflow in recent memory.
Bank of America data shows that gold was trading 30% above its 200 day moving average before the Middle East conflict. This is the highest of any major asset.
Shortly, gold was a very busy trade. It was because of this that its value dropped when war broke out, despite the fact that it had a reputation for being safe.
The same is true for European defense companies.
The index of the industry has risen more than three-times as much as the European market in the last 12 months. Some companies have soared since the beginning of the Ukraine War. Rheinmetall in Germany, for instance, has risen by 1,700%. In January, flows into an iShares European Defence ETF reached a record high.
This sector, which was a 'clear beneficiary of rising geopolitical conflict', weakened immediately after the war began. It was obvious that this was due to crowded positioning and not fundamentals.
What's next?
In a crisis, de-risking can be the easiest part. What to do next is the harder question.
Investors should ask themselves a few key questions. Is it essentially the same, in which case the original positions can be restored? Or is the world radically different?
Consider first two categories of wounded assets: European defense contractors and gold.
The case for European defense companies is still pretty good, if not even better than at the end February.
Our analysis on the gold front shows that mining firms are poised to generate record-breaking cash flows, while trading at a discount to their historical average valuations. This thesis is still valid, given that recent gold price weakness wasn't likely driven by a fundamental change in investor sentiment.
You can also take a look at South Korean chip stock prices, which have fallen sharply in value since the beginning of the war.
These stocks were the big winners of the first two month of the year. They rose more than 50%. This was due to the massive amount of capital being deployed by large technology companies for artificial intelligence hardware.
Why did they retreat? The war did not change much for the companies themselves. They were located in a region that was vulnerable and, perhaps most importantly, the stock prices had risen the most.
In February, Korean stocks were trading at a level nearly 40% higher than their 200-day moving average. The momentum score was also the highest of any market segment. Companies like SK Hynix gained 400% in the previous 12 months.
A retreat was to be expected. The retracement in the last few weeks was excessive, especially for large and cash-generating firms.
Asia's dependence on Middle East oil - and the rise in Asian fuel costs - are serious risks for the region. It could potentially affect the outlook of these companies if it persists.
In some cases, the crisis can change fundamentals in a short time, which can lead to mismatches in?price' and 'value.
This may be true for oil companies. Brent crude has soared to over $100 per barrel after Iran closed the Strait of Hormuz, through which a fifth of world oil used to transit. Oil producers' shares haven't kept up with the price of crude oil. This 'gap' could present an opportunity.
It is important to know the difference between a fundamental shift and a technical recalibration when navigating markets.
Helen Jewell is the author of this article. She is International CIO for Fundamental Equities at BlackRock. This column is intended for educational purposes and should not be taken as investment advice. This column is interesting to you? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn, X and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
(source: Reuters)