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Iron ore nears a two-week high due to resilient demand and China's stimulus bets
Iron ore futures prices rose on Friday, reaching their highest level in almost two weeks. They were also on course for a weekly increase, thanks to a resilient demand, as well as rising expectations about additional stimulus measures from China, the world's largest consumer. The May contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading session at its highest level since 3 March at 794 Yuan ($109.79), an increase of 2.5% from week to week. As of 0742 GMT the benchmark April iron ore traded on the Singapore Exchange had risen 1.55% to $103.8 per ton. This was the highest price since February 28. This week, the contract has gained 3,3%. China's central banks said that they would reduce interest rates, the reserve ratio for banks and their liquidity at the right time. Steelmakers increased production during March's peak construction season, which has also helped to support prices. A survey by consultancy Mysteel revealed that the average daily hot metal production, which is typically used to gauge demand for iron ore, increased for a third consecutive week, increasing by 0.03% on a weekly basis to 2,31 million tons as of 13 March. China's plans to reduce crude steel production and the escalating trade war in the world, which could dampen outlook for demand, continue to be headwinds that limit further gains. Coking coal and coke, which are used to make steel, have both gained in the DCE. The benchmarks for steel on the Shanghai Futures Exchange have advanced. Rebar rose 0.77%; hot-rolled coil climbed 1.53%; wire rod increased 0.78%; and stainless steel ticked up 0.41%.
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The sewage that contaminates Britain's waterways and oceans is a stain.
Under the dark seas of southern England, 400 millions mussels are encrusted on ropes that hang from buoys scattered over an area as large as the largest airport in the country. The Holmyards built Europe's biggest offshore mussel farming in Lyme Bay. They believed that it would be able to handle the millions of gallons sewage that is pumped into UK water each year. Even if the bacteria are far away, they can still pollute the water and block exports for several weeks to Europe. This could damage the business of a company that produces sustainable food. Sarah Holmyard, the sales manager at the farm, said: "It is criminal that they are allowed to dump their waste in the oceans and get away without any consequences." It's affecting a lot of businesses including ours. The Holmyards' problems, while affecting a small industry in Britain, show how the failure of basic services such as water or sewage can have a negative impact on the economy. Interviews with 20 people, and data analyses show that polluted waters have also affected tourism and construction projects. This is a drag on economic growth at a time the new Labour Government is trying to jump start the economy. According to a Freedom of Information Request, in the five years leading up to October 2024 the Environment Agency objected to 60 planning applications because of the pressure they would put on local sewerage networks. Clean water activists have begun to oppose planning applications. They believe that this will more effectively pressure the government to fix the sewage system, than the current efforts which focus on harming biodiversity. Ash Smith, a campaigner with Windrush Against Sewage Pollution, said that "money talks". Standing knee-deep in gray, untreated sewage in a local stream in Oxfordshire, Ash Smith explained that they were opposing house building in order to demonstrate how the water system has broken down the country's overall infrastructure. Pumping sewage into rivers, seas and oceans has been a major scandal for Britain. Privatised water companies are accused of prioritising profits over investments and dumping sewage into waterways when their ailing infrastructure can't cope. The pollution has discouraged wild water swimmers and angered surfer, led to warnings of toxic blue-green algae blooms in lakes, and created an army who are now experts in water quality, after noticing changes in waterways. In England, water companies will discharge sewage for more than 3.6 million hours by 2023. This will pollute streams, rivers, and coastlines with sanitary items and condoms. It could also damage ecosystems and habitats. SEWAGE SPILLS British sewers combine rainwater and wastewater. Water companies can "spill" water into waterways during heavy rains to avoid sewers becoming overloaded. Many have been fined, however, for releasing too much sewage. Environment Agency data shows that South West Water discharged sewage 530,737 times in 2023, an 83% increase from 2022, making it one the worst performers in England. South West Water is looking at ways to improve the water quality in Lyme Bay. We are ensuring that all designated shellfish waters in the region meet the government target of fewer than 10 spills a year, 10 years before the deadline. In addition, we plan to almost double our investment from 2025-30 to 2.5 billion pounds. John Holmyard, his wife Nicki and their plan for a mussel farm was a complex one. After years of farming mussels in the colder waters near Scotland, they looked for a location with warmer water and a good amount of nutrients to help them grow faster. The site had to be sufficiently far offshore to prevent runoff but also have some protection from the sea to reduce the swell. After visiting other similar sites in Britain, Europe and China, they settled on Lyme Bay and spent seven long years getting planning and regulatory approvals - not knowing if their intuition would be right. The Holmyards expect to reach 10,000-12,000 tonnes when the project is complete. John Holmyard who runs the farm with Nicki, Sarah, and George said that they never thought sewage would affect their farm. "But, it hasn't worked out that way." Shellfish producers have been affected by the toxic effects of sewage. Prior to Britain leaving the European Union, mussels or oysters were able to be shipped directly to the continent without purification. After Brexit, only purified products or those from British waters rated Class A will be accepted by the EU. This change has almost completely destroyed the mussel industry in north Wales, on Britain's West Coast. This region used to be the main source of Britain's exports into Europe, but it now only sells to Europe rarely due to a lack in bulk purification and poor water quality. Shellfish Association of Great Britain SAGB says British exports could double if seas are cleaner. James Green harvests and sells shellfish in Whitstable in southeast England, a town famed for its shellfish dating back to Roman times. He used to sell about half his product to markets in Europe and Hong Kong, but Brexit, and issues with water quality, have forced him to only sell purified oysters within the country. Southern Water, his water supplier, will be fined 90 millions pounds in 2021 because it dumped sewage for five years, up to 2015. This caused a disruption in harvests and exports. He was not compensated and said it's hard to wait until improvements. He said, "I have a business." "Can you hold off until the changes kick in in five, six or seven years?" Green tracks rain and sewer overflows in order to assess the risks of harvesting his oysters. He also monitors E.coli, Salmonella, and Norovirus. Southern Water announced that it would invest heavily in order to maintain the high quality of its shellfish beds along its coast. The 2021 court case involving events that occurred between 2010 and 2015. It found no evidence to support the impact of these events on shellfish beds. These beds are affected by a variety of factors. Driven to despair Holmyards mussels have been tested almost daily for E.coli contamination in the Netherlands and always come out within the Class A limits. The British authorities have reported high E. coli numbers in monthly tests of similar nature, and classified parts of the farm as Class B. Negative readings in the British system can result in different harvests. Holmyards was stopped from exporting their mussels from this part of the farm for a few weeks and the area was also classified as Class B at the same time next year. The family finds it strange, because bacteria from the beach should have been heavily diluted before they reached the farm. Also, the British results don't match the Dutch tests that are more frequent. John stated that they have been unable since Brexit to raise new capital due to the threat of export bans. Food Standards Agency in Britain, which is responsible for classifying areas where shellfish are harvested, has said that it tried to be flexible but had to protect the public's health. It also added that classifications will only improve as water quality improves. Sarah and George explained that an annual survey had shown the farm to have spawned a variety of species such as lobster and crab. In Europe, their blue mussels are a premium product, renowned for their sweet, rich flavour. Despite the bans, Holmyards exports about 95% their mussels into the EU. The rest is sold in Britain. The tourism bosses believe that this type of locally produced, high-quality food is what they should be promoting to potential holidaymakers. Alistair Handyside is the chairman of South West Tourism Alliance. He said that while weather and costs were the main factors affecting tourism, the talk about sewage has damaged the appeal of some locations. He said, "It makes you despair." TOXIC EXPOUT The sight of litter and sewage on beaches and rivers has also prompted thousands to protest. Sally Burtt Jones was one of SOS Whitstable's founders. She is part of a group that organizes protests, tests the local water, and campaigns for legislation change. She expressed her pride in her work as a campaigner. She said, "We care for the community and sea." "When we come together, we can bring about change." John Reeve is a representative of Surfers Against Sewage in Saltburn, a seaside town located on the coast of the Northeast. He has studied geology and worked with local officials to determine how to manage rainwater when storms are becoming more intense due to climate changes. He said, "We're making a change over time." Water industry claims it has made significant investments in infrastructure since privatisation of 1989. However, population growth and climate changes have created new pressures during a period when successive governments and regulator Ofwat were focused on keeping bills low for customers. Ofwat reported that water companies in England & Wales have paid out 53 billion pounds ($66billion) in dividends since privatisation, and collective net debt of 69.5billion in 2024. The government has also gained the power to tie dividends to performance. It has proposed that customer bills increase by 36% on average before inflation in the next five year to fund upgrades to infrastructure. The government is reviewing the sector. Ofwat's spokesperson stated that customers want change: "We must see a transformation of the culture and performance of companies." We will monitor companies and hold them accountable." The Environment Agency has also been a hindrance to construction due to the failures of sewage systems. Most objections to housing, retail, office, school, science business park, and leisure centres are overcome by finding ways to reduce the impact. The objections can add to the time, costs and complexity of building projects. This is a major challenge for the government, which wants to stimulate a boom in infrastructure and housing construction. The biodiversity of the world has been affected by water pollution. The stocks of Atlantic Salmon, which spawn in the freshwater breeding grounds of Britain, have reached new lows. The rod catch for 2023, as declared in the provisional declarations, is the lowest since 1988. Environment Agency blamed the Holmyards for the pollution and sedimentation. Sarah stated that the potential of the business being duplicated elsewhere is huge. But if the same problems of not being allowed to export due to the water quality are present, it will not work. ($1 = 0.8046 pound) (Reporting and editing by David Clarke; Kate Holton, Dylan Martinez)
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REFILE - Stocks fall with S&P500 in correction; bonds are in demand amid tariff anxiety (March 13).
Investors fled to safer assets on Thursday, as global trade tensions were feared to increase inflation and slow the growth of the economy after U.S. president Donald Trump's recent tariff threats. The benchmark S&P 500 closed Thursday for the first time more than 10% lower than its previous record close, which was achieved on February 19, Trump has threatened to impose a 200% tariff on European beverages if the EU doesn't remove the whiskey surcharges from the United States. Trump's increased tariffs on U.S. imports of steel and aluminum took effect Wednesday. The Bureau of Labor Statistics, part of the Labor Department, released data on Thursday that showed U.S. Producer prices (PPI), which were expected to rise faster than consumer prices (CPI), actually remained unchanged in February. Last month's trends were not enough to reassure investors, who had been preparing for the potential impact of trade conflicts on future inflation and economic growth. Tim Ghriskey is a senior portfolio strategist with Ingalls & Snyder, New York. He said that if it weren't for the ongoing trade war, the market would have been up strongly on the inflation data. "Traders have their attention on the trade conflict." Ghriskey said, "It appears that the administration (in the U.S.) is very aggressive. They seem to be committed to the long-term and personalities are unlikely to change their minds in the near future." Wall Street saw the S&P500 fall 77.78 or 1.39% to 5,521.52. The Dow Jones Industrial Average also appeared to be approaching a confirmation of a correction, as it ended Thursday at 40,813.57, down 537.36, or 1.30%. This was roughly 9.4% lower than its latest record-breaking closing high. The Nasdaq Composite dropped 345.44, or 1.96% to 17,303.01. After confirming the correction on March 6, the tech-heavy index fell more than 14% compared to its recent record. According to Yardeni Research, stock market corrections have been fairly common. The S&P 500 has experienced a correction at least 56 times since 1929. Data showed that only 22 of these corrections morphed to bear markets. A bear market is defined as a decline of at least 20% from the most recent highs. MSCI's index of global stocks fell 9.33 points or 1.12% to 821.52 in Thursday. This is more than 7% lower than its latest record high, after hitting his lowest point since September. The pan-European STOXX 600 Index closed earlier down 0.15%, after gaining 0.81% the previous session. The U.S. S&P 500 is down over 6% year to date, but European stocks are doing better thanks to government plans for defense spending and a possible Ukraine peace agreement. The STOXX Index is up 6.5% for the year-to-date despite recent drops. U.S. Treasury Yields fell on Friday as the equity selloff increased demand for U.S. Government debt. The escalating Trade Wars between the United States, and its trading partners threatens to deter growth and increase inflation. The yield on the benchmark 10-year U.S. notes dropped 4.6 basis point to 4.27% from 4.316% at late Wednesday, while the 30-year bond rate fell 4.1 basis to 4.59%. The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve fell by 4 basis points, to 3.955% from 3.995% at late Wednesday. The U.S. Dollar was mixed in terms of currencies. It weakened against the safe-haven Japanese yen, but gained on the Euro and Canadian dollar. The dollar fell 0.38% against the Japanese yen to 147.68. The euro fell 0.33% to $1.085, while the Canadian dollar declined 0.45% against the greenback. Against the Swiss Franc the dollar gained 0.14%. Oil prices fell after a rally on Wednesday, when traders took into account macroeconomic concerns as well as demand and supply expectations. U.S. crude oil settled at $66.55 per barrel down $1.13 or 1.67% and Brent settled at $69,88 per barrel down 1.51% or $0.07 for the day. Gold prices soared to record levels on Thursday and were just a few cents away from the $3,000 mark per ounce. The momentum was driven by increased tariff uncertainty as well as bets placed on the Federal Reserve's monetary policy being eased. Spot gold increased by 1.73%, to $2982.84 per ounce. U.S. Gold Futures increased by 1.51% to $2.983.50 per ounce.
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Asia Gold Discounts in India Hit 8-Month High as Record Prices Weigh on Demand
The gold discounts in India reached their highest level in almost eight months this week, due to the record-high prices and customers staying away from other major hubs. Jewelers are reporting fewer sales. The rising price of bullion has caused a significant drop in demand. On Thursday, the domestic gold price reached a new record of 87.886 rupees for 10 grams. This week, Indian dealers offered a discount Up to $39 per ounce, including import duties of 6% and sales taxes of 3%, compared to a discount from $10 to $21 the previous week. A Mumbai-based dealer from a bullion import bank said, "Jewelers don't want to build high-cost inventories at the end the financial year as they are busy with closing accounts." India's fiscal year runs from April to March 31. India's gold exports will drop by 85% from the previous year in February, and reach their lowest level in 20 years. The demand has been dampened due to record high bullion prices. China, which is the largest gold consumer in the world, traded gold at a discount ranging from $1 to $18 over spot prices. Hong Kong dealers charged premiums from $1 to $2 per ounce. . Standard Chartered analyst Suki cooper said in a report that "China's Market is alternating between a discount or a premium." The physical market has given gold a weaker foundation... China's stock markets have slowed down amid high prices highlighting the macro-drivers." Bullion was traded in Japan A trader stated that a discount of 3 dollars and a premium $0.5 is the difference between these two prices. A Japanese trader said, "The market is choppy and volatile because of Trump's policies. It seems investors are waiting for the trend to be clear." A trader in Singapore said that gold was traded at a discount of $0.50 to a premium of $3.
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BMW's profits slump as China sales and brake problems plague earnings
BMW's 2024 net profit fell by more than a third to 7,68 billion euros, in line with the market expectation, due to weak sales in China, Germany, and delivery delays caused by brake problems. It said that the premium carmaker expected its profit margins for cars to reach 5-7% by 2025. This is at best a small increase over last year's 6,3%. The company was anticipating intensifying wars in trade and continued tough competition in China. The carmaker's forecast includes all tariffs that were imposed on March 12th, including increased tariffs for U.S. Steel and Aluminium imports, and a 25% duty placed on certain vehicles imported from Mexico, such as BMWs. The group has proposed a payout ratio of 36.7% - one of the highest ever in its history - consisting of a 4.32 euro dividend per preferred share by 2024. This is still lower than the 6.02 euro dividend paid for the previous fiscal year. Cut its 2024 Outlook The drop in China sales, and the problems with Continental brakes that affect 1.5 million vehicles has caused the rate to fall from 8-10%. The carmaker's warnings were confirmed by the drop in net profit of 41% for the fourth quarter. In January, Earnings would be affected by inflation and higher fixed costs due to unwinding of inventory in the last three months.
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Gold reaches record levels as tariffs threaten to raise the price of gold.
Asia shares rose Friday, and global markets tried to rebound after a brutal sale earlier in the week. Gold reached a new record as investors became nervous due to the latest escalation in global trade tensions. After Senator Chuck Schumer announced that he would vote for a Republican funding bill to avoid a government shutdown, he signaled his party's support. U.S. Stock Futures were a strong response. Nasdaq futures gained more than 1% in one instance and S&P futures advanced by 0.6%. FTSE Futures also gained 0.3%. DAX futures rose 0.6%. Alvin Tan is the head of Asia FX Strategy at RBC Capital Markets. He said that this news, for today at least, was positive for the market sentiment. The broadest MSCI index of Asia-Pacific stocks outside Japan, which includes Japan, traded 0.95% higher. However, it is still on course to lose 1.5% this week as global trade conflicts have weakened global stock markets. Donald Trump, the U.S. president, said that he will impose a 200% tariff on imports of European wines and spirits if the EU does not remove the retaliatory charges on American whiskeys and other products which come into effect in the next month. Vishnu Varathan is the head of Asia ex-Japan macro research at Mizuho. Recent developments have sparked the steep sell-offs on Wall Street, and confirmed that the S&P 500 is in a correction. This comes just one week after Nasdaq also confirmed this. "I don't think Trump 2.0 is the same as Trump 1.0. Michael Strobaek is the global chief investment officer of Lombard Odier. He said that this time the president appears to be willing to let U.S. stocks and the economy suffer as he implements his "America first" goals. Gold, a safe-haven asset, has benefited from the trade war. The yellow metal hit a record of $2,993.80 per ounce last Friday. The yellow metal was expected to rise 2.6% this week. Japan's Nikkei gained 0.8%. Chinese stocks rose on Friday after Hohhot, a northern Chinese city, announced large cash rewards for boosting birth rates. Investors also anticipated a press conference by officials of Beijing's top planning office and other agencies next week to discuss additional measures for boosting domestic consumption. The Hang Seng Index in Hong Kong jumped by 2.4% while China's blue-chip index, the CSI300, grew by 2.3%. Shanghai Composite Index rose by 1.7%. Dollar Trouble The dollar gained some ground on Friday thanks to the safe-haven flows. However, it was still not far from recent lows due to fears of an imminent U.S. economic recession and growing trade tensions. The Euro last traded at $1.08465, down 0.04%, while the Pound fell 0.03% to $1.9475. The German fiscal reset plan, which includes a 500-billion-euro fund for infrastructure as well as sweeping changes in borrowing rules and growth boosters to boost military spending and revive Europe's biggest economy has given the euro additional support. The German lower house, which is leaving office in March, will vote on these measures before forming a new Parliament on March 25, Investors will be waiting for further information on the rate outlook, amid the uncertainty surrounding Trump's policies on trade and the impact they have on U.S. inflation and growth. "Our assessment shows that the rate trend is constant, and will continue to be lower." Varathan from Mizuho said that it's a matter of timing. "I believe that the tariffs are only going to be an inconvenience and not a hindrance to the Fed's cuts because, even if prices increase, it will still result in a negative shock of demand, which makes people worse off. Dollar was up by 0.5% last week against the yen, at 148.50. However, it was expected to suffer a small loss for the week against the Japanese currency due to the increasing bets on more Bank of Japan rate hikes. Next week, the BOJ will also meet. Oil prices rose after falling the previous session. Brent futures increased by 0.67%, to $70.35 per barrel. U.S. West Texas Intermediate Crude Futures rose 0.75% per barrel to $67.05.
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Mayor says that Russia shot down four drones heading for Moscow after Kyiv attacked oil complex
Sergei Sobyanin, the mayor of Moscow, said that Russian air defences had repelled a drone attack flying towards Moscow. No injuries were reported in either the capital, or an earlier attack against an oil complex located in one region in southern Russia. Sobyanin, on his Telegram official channel, said that emergency services were working on the site of the debris fall. Sobyanin didn't mention Ukraine. But Kyiv has launched an ongoing series of drone attacks against Russia, since President Vladimir Putin dispatched tens-of-thousands of troops to Ukraine over three years ago. Most of these attacks have targeted energy and other infrastructure. Veniamin Kodratiev said that an attack by Ukrainians had ignited a fuel tank at the Tuapse Oil Complex on the Black Sea shores. He said that no one was injured in the attack. Kondratiev, who did not specify whether the site was hit by a missile or drone, said that 121 firefighters battled to extinguish the fires. Export-oriented Tuapse Refinery produces high-sulfur diesel, naphtha and vacuum gasoil. It has a capacity of 240.000 barrels per day. Andrei Vorobyov said that three drones headed for Moscow were brought down in his area. He said debris had fallen onto a building site and an under-construction residential building. The RIA news agency, citing emergency services, reported that one of the drones hit the roof a multi-storey building in west Moscow. The TASS agency reported that debris also fell on a house outside of Moscow. Reporting by Andrew Osborn; Editing by Tom Hogue and Andrew Osborn)
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Iran's ruling class caught between Trump's repression and an economy in trouble
Iran's clerical leadership may find that engaging the "Great Satan" in order to negotiate a nuclear agreement and ease crippling economic sanctions is the lesser evil. Four Iranian officials have said that despite its deep mistrust for the United States and in particular President Donald Trump, Tehran is growing increasingly worried about public anger at economic hardships escalating into massive protests. People said that despite the defiant and unyielding rhetoric of Iran's clerical leadership in public, there was a pragmatic desire within Tehran's power corridors to strike a bargain with Washington. Tehran's fears were exacerbated when Trump revived his "maximum-pressure" campaign from his first term, which aimed to reduce Iran's oil sales to zero by imposing more sanctions. This would bring Iran's fragile economy to its knees. Masoud Pezeshkian, the president of the Islamic Republic of Iran, has repeatedly emphasized the severity of its economic situation, saying that it was more difficult than the Iran-Iraq War in the 1980s. He also pointed this month at the latest round U.S. sanction targeting oil tankers transporting Iranian oil. According to one of the Iranian officials, leaders are concerned that cutting off diplomatic avenues could further fuel discontent in Iran against Ayatollah Ali Khamenei. This is because he is the final decision maker for the Islamic Republic. Alex Vatanka is the director of the Middle East Institute's Iran Program in Washington. He said that there was no doubt whatsoever that the man, who has been the supreme leader since 1989, and his foreign policies preferences are the most responsible for the current state of affairs. Iran's poor economy prompted Khamenei, who was then president of Iran, to back the nuclear deal struck in 2015 with major powers. This led to the lifting of Western sanctions as well as an improvement in economic circumstances. Then-President Trump’s renewed attack on Iran after he withdrew from the nuclear agreement in 2018 squeezed life standards again. The situation is getting worse every day. I cannot afford to pay rent, bills or clothes for my kids," Alireza Yousefi said, 42, an Isfahan teacher. "Now, even more sanctions make it impossible to survive." The Iranian Foreign Ministry did not reply to a comment request. "ON EQUAL TERMS" Trump, while increasing the pressure on Iran through new sanctions and military threats, also opened the doors to negotiations when he sent a letter to Khamenei suggesting nuclear talks. Khamenei rejected the offer Wednesday, repeatedly saying that Washington had made excessive demands and that Tehran wouldn't be pushed into negotiations. In an interview published Thursday, Abbas Araqchi, Iran's top diplomatic official said: "If we negotiate while the other party is exerting maximum pressure on us, we will be in a weaker position and achieve nothing." He said that "the other side must be convinced of the ineffectiveness of the pressure policy - then we can sit down at the table and negotiate on equal terms." A senior Iranian official stated that there was no other option but to reach a deal, and it was possible. However, the road ahead was bumpy, given Iran's mistrust of Trump following his abandonment of the 2015 agreement. Iran's economic collapse has been largely prevented by China, its main oil buyer and one of the few countries still trading with Tehran in spite of sanctions. According to estimates by the U.S. Energy Information Administration, oil exports dropped after Trump abandoned the nuclear deal, but recovered in recent years. They are expected to generate more than $50 billion of revenue between 2022 and 2023, as Iran finds ways to avoid sanctions. But uncertainty still looms about the future of exports, as Trump's policy of maximum pressure aims to choke off Iran's crude oil sales by imposing multiple rounds of sanctions against tankers and other entities involved in trade. PUBLIC ANGER SIMMERS Iran's rulers also face a series of crises: energy and water shortages; a collapsing dollar; military setbacks for regional allies, and growing fear of an Israeli attack on its nuclear facilities. All of these are exacerbated by Trump's hard stance. Lack of infrastructure investment, excessive consumption driven by subsidies and declining natural gas production, as well as inefficient irrigation are all contributing to the energy and water sector's problems. This leads to blackouts, and water shortages. According to foreign exchange websites and officials, the Iranian rial's value has dropped by more than 90 percent against the dollar ever since sanctions were reinstated in 2018. State media reported that Iranians, worried about Trump's harsh approach, have bought dollars, other hard currency, gold, or cryptocurrency, indicating further weakness in the rial. State media reported that the price of rice had risen 200% in the past year. Media reports indicate that housing and utility costs in Tehran and other major cities have risen sharply in recent months. They climbed roughly 60%, mainly due to the steep decline of the rial and the rising cost of raw materials. Some Iranian experts claim that the official inflation rate is over 50%, but it hovers at around 40%. The Statistical Center of Iran has reported a dramatic rise in food costs. In January, the prices of a third of the most essential commodities increased by 40%. They were now more than twice as high as they had been in the previous month. According to the Tasnim News Agency, Ebrahim Sadeghifar, head of Iran's Institute of Labor and Social Welfare (IILSW), 22%-27% of Iranians are now living below the poverty level. Last week, Iran's Jomhuri-ye Eslami daily reported that the poverty rate was around 50%. I can't pay the rent on my carpet shop, or my employees' wages. No one can afford to buy carpets. "If this situation continues, I'll have to layoff my staff," Morteza (39), said over the phone, from Tehran's Grand Bazaar. He gave only his first name. How can they hope to resolve the economic crisis without talking to Trump? Talk to him, and you will reach an agreement. "You cannot afford to be proud on an empty stomach." NUCLEAR RED LINE According to Iranian state media, at least 216 protests took place in Iran during February. These included retirees and workers, as well as students, health professionals, merchants, and healthcare professionals. According to reports, the protests were mainly focused on economic hardships such as low wages and unpaid salaries for months. Officials fear that a decline in living standards, despite the small scale of most protests, could explode. One of the four officials who was close to the government said, "The country is a powder-keg and any further economic strains could ignite it." The officials stated that Iran's ruling class is aware of the possibility of a return of unrest, similar to protests from 2022-2023 over the death of Mahsa Amin in custody or nationwide protests of 2019 over the rise in fuel prices. Senior Iranian officials said that there were several high-level discussions to discuss the potential of new mass demonstrations and possible measures to prevent them. Iranian officials, however, said that despite concerns about possible unrest, Tehran would only go so far with any discussions with Trump. They stressed that "excessive requests" such as the dismantling of Iran's nuclear program or conventional missile capability were not on the table. The senior official stated that "yes, there is concern about increased economic pressure and there are concerns regarding the nation's anger growing, but we cannot give up our right to produce nuclear energy just because Trump wants it." Ali Vaez is the Iran project director for International Crisis Group. He said that Iran's leaders believed that negotiations with Trump would be a sign of weakness and could lead to more pressure rather than less. He said: "Ayatollah Khmenei appears to believe that surrendering is the only thing more dangerous than sanctions." (Reporting, Writing and Editing by Parisa Hafezi)
Gold reaches record highs as Trump tariffs encourage safe-haven purchases
Gold prices reached a record high on Monday. This was boosted by the inflow of safe-haven assets after U.S. president Donald Trump's tariffs against Canada, China, and Mexico heightened concerns about inflation, which could stifle economic growth.
By 09:38 am, spot gold had risen 0.6% to $2.816.53 an ounce. After hitting a session high of $2,818.58, gold prices rose 0.6% to $2,816.53 per ounce by 09:38 a.m. ET (1438 GMT).
U.S. Gold Futures increased 0.7% to 2,855.90. They are trading at a premium over spot rates.
Phillip Streible is the chief market strategist of Blue Line Futures. He said, "It has to do with the tariffs... many people believe this could increase inflation and also impact the economic growth due to the higher costs associated with that. Tariffs can create a stagflationary environment."
Trump's 25% tariffs on Canadian and Mexican imports, as well as a 10% tax on Chinese products, were imposed on Tuesday. This sparked fears of a global trade war, which could slow down growth and fuel inflation.
Canada and Mexico have ordered retaliatory actions, while China has said that it will challenge the tariffs in the World Trade Organization. It also plans to take countermeasures which are not specified.
Bart Melek is the head of commodity strategy at TD Securities. He said that the market was not convinced of the extent of the current trade war.
Melek said, "We haven’t seen a full response from gold. If this trade war continues over a long period of time, it could lead significantly higher gold price down the road."
During times of economic or political instability, gold is considered a safe haven investment.
J.P. Morgan stated that bearish contagion could affect gold in the short term but disruptive tariffs would be a bull case on a longer-term basis.
Investors will be assessing the U.S. economic health by examining data on U.S. jobs, the ADP Employment Report and the U.S. Employment Report this week.
Spot silver increased by 0.1%, to $31.33 per ounce. Platinum fell 2.2%, to $956.45, and palladium dropped 0.3%, to $1,005.25.
(source: Reuters)