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US sanctions against Iran ahead of nuclear talks
Washington is seeking to increase pressure on Tehran by imposing sanctions on Wednesday on entities that it believes are involved in the illegal trade of Iranian petrochemicals and petroleum. In a press release, the U.S. State Department announced that sanctions would be imposed on seven entities in the United Arab Emirates (UAE), Turkey and Iran. The Department accused these entities of trading Iranian petroleum products and petrochemicals. Two vessels were targeted. In a separate press release, U.S. Secretary Marco Rubio stated that the action was taken against four sellers and one purchaser of Iranian petrochemicals valued at hundreds of millions dollars. The action on Wednesday is the latest step taken against Tehran since Trump re-established his "maximum press" campaign, which included efforts to reduce Iran's oil exports and prevent Tehran from developing nuclear weapons. Rubio stated that the President was committed to reducing Iran's illicit oil exports, including those to China, to zero as part of his campaign to exert maximum pressure. The Iranian mission at the United Nations, New York, did not respond immediately to a comment request. This action is taken as the United States has resumed discussions with Iran about its nuclear program. The U.S.-Iran negotiators are scheduled to meet again in Rome this Saturday. Trump, in his first term from 2017-2021, rescinded the U.S.'s participation in a 2015 agreement between Iran and major world powers which placed strict limitations on Tehran’s uranium-enrichment activities as a trade for relief of sanctions. Trump also reimposed U.S. sanctions. Since then, Iran's uranium enrichment has exceeded the limits set by that agreement. Western powers accuse Iran a secret agenda of developing nuclear weapons capability through enriching uranium above the level they claim is acceptable for a civil atomic energy program. Tehran claims its nuclear program is solely for civilian energy purposes.
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Saudi Arabia is able to live with lower oil price, according to sources
Five sources familiar with the discussions said that Saudi Arabian officials were briefing industry experts and allies to explain the kingdom's unwillingness to support the oil market through further cuts in supply and its ability to handle a long period of low oil prices. Saudi Arabia's possible policy shift could indicate a move to produce more and expand its market share. This would be a major change, after spending five years balancing the oil market by producing a large amount of oil as a member of the OPEC+. These cuts helped to support prices and, as a result, the revenue from oil exports that many oil producers depend on. The Saudi government’s communications office has not responded to a comment request on this matter. Sources said that Riyadh was angry because Kazakhstan and Iraq produced above their OPEC+ target. These targets are set by the group to maintain a balance between supply and demand in oil markets. OPEC+ source said that after pushing its members to meet these targets and compensate for the oversupply of recent months, a frustrated Riyadh has changed tact. Saudi Arabia pushed OPEC+ to increase output more than planned in May. This decision helped push oil prices down below $60 a barrel, a four-year low. Prices are down, which is bad for oil producers who rely on exports to finance their economies. Saudi Arabia, for example, has a low cost of production but they still need a higher price of oil to fund government expenditures. Many large oil producing countries are forced to reduce their budgets when oil prices drop. Saudi Arabia appears to be telling allies and experts they are prepared to do this. Five sources claim that Saudi officials have in recent weeks told their allies and participants in the market they can cope with the price drop by increasing borrowing and reducing costs. One source said, "The Saudis may have to scale back some of their major projects if they want lower prices." Due to the sensitive nature of the subject, all sources declined to provide their names. According to the International Monetary Fund, Saudi Arabia requires oil prices to be above $90 in order to balance its budget. This is higher than the other major OPEC producers, such as the United Arab Emirates. Analysts have stated that Saudi Arabia could be forced to cut back or delay some projects as a result of the drop in price. Not a price war yet OPEC+ could decide to increase output again in June. This includes the Organization of Petroleum Exporting Countries (OPEC) and its allies, such as Russia. Saudi Arabia contributes two fifths of the 5% global supply cut by OPEC+. Two of the five Russian sources familiar with Russian thinking and conversations have confirmed that Riyadh is planning to increase output faster. Two sources stated that Russia prefers the group to stick with slower production increases. The office of Alexander Novak, Russian Deputy Premier Minister, did not respond to a comment request. Saudi Arabia and Russia - the de facto leaders in OPEC+ - make up the largest contributions to OPEC+'s cuts. The Russian budget is about $70 per barrel, and spending by the Kremlin has increased due to the Russian conflict in Ukraine. One of the sources stated that Russia could see a further drop in revenues as the prices of its sanctioned, discounted oil could fall under $50 a barrel due to OPEC+'s increased output. Reasons for Change Theories about the apparent shift in Saudi strategy include punishing OPEC+ member countries that exceed their quotas, or a fight for market shares after ceding the ground to non OPEC+ producers like the United States and Guyana. A higher output could also give President Donald Trump a boost, as he has asked OPEC for a production increase to keep U.S. gas prices low. Trump will visit Saudi Arabia next month and may offer Riyadh a package of arms and a nuke agreement. OPEC+ has decided to triple the planned increase in output to 411,000 bpd. OPEC+ still holds back over 5 million bpd. The group aims at reducing these restrictions by the end 2026. Giovanni Staunovo, UBS analyst, said: "We still would call this a managed' unwinding of cuts. This is not a battle for market share."
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European steelmakers warn of trade and pricing risks despite strong quarterly earnings
The top European steelmakers' first-quarter earnings were better than expected, but they warned that trade tensions around the world, low European prices, and market volatility will cloud the outlook for the remainder of the year. ArcelorMittal, which reported on Wednesday a smaller-than-expected drop in its quarterly core profit, flagged trade disruptions as a risk to its 2025 steel demand forecasts, particularly in the U.S. and China, sending its shares down more than 5%. Aditya Mittal, CEO of world's second largest steelmaker Aditya Mittal, said that increased uncertainty over global trade terms is damaging business confidence. If not resolved quickly, it could cause further economic disruption. SSAB, which also reported a smaller-than-expected drop in earnings on Tuesday, said the proximity of its facilities to customers, and specialised products helped cushion the immediate impact of new U.S. tariffs, but warned of a "more uncertain than usual" second-quarter outlook in its steel division. Aperam, a steel company based in Luxembourg, also reported results slightly above expectations Wednesday. It attributed this to the higher volumes it saw in Europe as well as the consolidation of the U.S. business. Aperam is a manufacturer of stainless steels and specialty alloys. It operates mostly in Brazil and the EU, with limited exposure to the U.S. The group warned of further pricing pressures on earnings for the second quarter. However, it is expected to improve in comparison with the performance from the previous three-month period. Its shares fell in the early trading after it admitted that it is difficult to give a forecast for future quarters. Timoteo Di Maulo, group CEO, said that it was difficult to make reliable projections in this volatile environment. Maxime Kogge is an Oddo-BHF Analyst. He believes that the second quarter will bring relief, as trade restrictions are expected to increase prices. European players may also reduce their exposure to China and restructure efforts could pay off. The European steel industry is facing a combination of high energy prices, cheap Chinese producers, and higher tariffs for exports to the United States at a time where the global market is already struggling with excess capacity. The Organisation for Economic Co-operation and Development (OECD) said earlier this month that "the global steel excess capacity will continue to rise, (...) fueled by cross-border investment by Chinese steel firms." ArcelorMittal's assessment of the Asian market was mixed. It expects that the strong demand in India will continue, supported by the new Indian safeguard duty of 12% on steel imports from China. The group believes that in China, overcapacity will continue to result in low steel spreads, which is the difference between the price of steel and the cost to produce it. ArcelorMittal, despite its cautious tone in its statement, reaffirmed their 2025 investment plans and noted that European steel spreads were rebounding, supported by the European Commission’s Steel and Metals Action Plan. They also noted trade barriers against imported goods and an anticipated rise in Germany’s infrastructure spending. On May 8, Outokumpu Oyj, a Finnish steel company, and Acerinox, a Spanish steel company will report their first quarter results.
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U.S. stocks and global stock prices fall on the back of GDP decline and crude price drop
Wall Street stocks plunged sharply, pulling down their European counterparts as well, due to a waning investor appetite for risk following a disappointing U.S. economic report, a series of disappointing data, and mixed earnings results. The benchmark Treasury yields in the United States are headed to their seventh consecutive session of declines due to no progress being made on tariff negotiations. The dollar grew and crude oil prices fell. The Nasdaq, which is dominated by tech stocks, was the worst performing of the three major U.S. indexes. All three U.S. indexes of stocks were headed for their third consecutive monthly loss on the last day in April. The first three months in 2025 saw a contraction of the U.S. Gross Domestic Product (GDP). U.S. president Donald Trump blamed Joe Biden, his Democratic predecessor and said that his tariffs will eventually lead to a booming economic. Peter Cardillo is the Chief Market Economist of Spartan Capital Securities, based in New York. He blamed Trump. Cardillo stated that Trump's policies were responsible for the numbers. "They have created uncertainty. When you create uncertainty, no one will put their foot down on the accelerator." Cardillo said that they are seeing it as earnings come in. "Guidance is being withdrawn." The ongoing multi-fronted trade war has continued to cloud the U.S. earnings season. Companies are increasingly reducing or pulling back their guidance because of the fog of uncertainty surrounding tariffs. Wall Street pared its losses following the release of positive economic indicators. Personal Consumption Expenditures (PCE) price index unchanged on a monthly basis and stronger-than-expected consumer spending. Meta Platforms, Microsoft and other members of the "Magnificent 7" group of companies that are involved in artificial intelligence, will report their results after the bell. Positive results could reverse Wednesday's decline. Jay Hatfield is the portfolio manager of InfraCap, a New York-based company. He said, "We believe it's irrational that people sell tech stocks so hard, especially when we have big kahunas to report." If we made this call today, we would be explaining why the market is up 2%. The Dow Jones Industrial Average dropped 466.73, or 1.15 %, to 40 061.02, while the S&P 500 declined 83.29, or 1.50% to 5,477.54, and the Nasdaq Composite was down 343.74, or 1.97% to 17,117.58. The U.S. GDP data has caused European stocks to erase their previous gains. The MSCI index of global stocks fell by 8.10 points or 0.97% to 823.21. The pan-European STOXX 600 fell by 0.12% while Europe's FTSEurofirst 300 fell by 3.70 points or 0.18%. Emerging market stocks increased 4.65 points or 0.42% to 1,110.64. MSCI's broadest Asia-Pacific share index outside Japan closed up by 0.78% to 580.07 while Japan's Nikkei gained 205.39, or 0.57% to 36,045.38. The dollar's gains were maintained after a series of mixed economic data from the United States. The dollar index (which measures the greenback versus a basket including the yen, the euro and other currencies) rose by 0.26%, to 99.42. Meanwhile, the euro fell 0.19%, to $1.1363. The dollar gained 0.3% against the Japanese yen to reach 142.75. The sterling fell 0.5% to $1.339. The Mexican peso fell 0.35% against the dollar to 19.626. The Canadian dollar rose 0.08% against the greenback, to C$1.38. The yield on the benchmark U.S. 10 year notes dropped 1 basis point from late Tuesday to 4,164%. The 30-year bond rate rose by 1.5 basis points, from 4.648% to 4.6626% late Tuesday. The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve (Federal Reserve), fell by 4.5 basis points, to 3.613% from 3.658% at late Tuesday. Trump's trade conflict has eroded demand prospects, causing oil prices to fall further. This is their biggest drop in almost 3-1/2 years. U.S. crude dropped 1.89%, to $59.30 per barrel. Brent was down to $63.22 a barrel on the same day. The dollar's strength has led to a decline in gold prices. Spot gold dropped 0.39% to $3302.72 per ounce. U.S. Gold Futures dropped 0.66% to an ounce of $3,297.00.
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Gold prices fall on hopes of rate cuts after weaker US data
Gold prices recovered some of their losses on Wednesday, as the bets that U.S. Federal Reserve would cut rates increased after weaker than expected first quarter U.S. economic growth. At 10:57 am, spot gold fell 0.2% to $3,308.52 per ounce. ET (1457 GMT). Bullion fell over 1% in the morning session but is on track to record its fourth consecutive month of gains, with a 6% increase so far in April. U.S. Gold Futures dropped 0.5% to $3318.50. The data showed that the U.S. Gross Domestic Product contracted by 0.3% on an annualized basis last quarter as businesses imported goods in anticipation of tariffs expected from the Trump Administration. Gold is still in a bullish market, and the data released today suggests that initial Fed rate reductions will be easier, which should benefit gold, said Tai Wong. An independent metals trader added that given gold's recent sharp rise to $3,500, it may continue to trade sideways. The Fed will resume cutting rates if it sees clear signs of an economy in decline by June. This could be by as much as a whole percentage point at the end of the calendar year, traders predicted on Wednesday. Low interest rates are also conducive to the growth of non-yielding gold bullion as a hedge against financial and political turmoil. Last April 22, it reached a record-high of $3,500.05 an ounce. The U.S. Personal Consumption Expenditures (PCE) Price Index was unchanged in march after increasing by 0.4% in the previous month. The quarterly PCE, excluding volatile components such as food and energy, grew at a rate of 3.5%. This is a significant increase from the 2.6% growth in October-December. Wong said that gold has largely shrugged off the lowest reading in core PCE in the past pandemic, due to the sharp rally it experienced earlier, following the unexpected contraction of U.S. Gross Domestic Product. The biggest data on jobs this week is the U.S. monthly employment report, due on Friday. This could provide more insight into the Fed's outlook for interest rates. China's markets are closed for the Labour Day holiday from May 1-5. Silver spot fell 0.9%, to $32.68 per ounce. Platinum dropped 1.1% to $866.74. Palladium slipped 0.1% to $933.50. (Reporting by Anjana Anil in Bengaluru; Editing by Sahal Muhammed)
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Record gold prices dampen demand during Indian festival
The gold demand was lower than usual on Wednesday, during an Indian festival where buying gold is considered auspicious. Retail consumers reduced purchases due to the record-high price rally. Indians celebrated Akshaya Tiritiya, which is the second largest gold-buying holiday after Dhanteras. Surendra Mehta is the secretary of the India Bullion and Jewellers Association. Mehta stated that big retail chains were doing better than small retailers because they were offering discounts for jewellery-making charges. Near-record prices were stretching consumers' budgets. The domestic gold price hit a new record of 99,358 Rupees per gram this month. On Wednesday, it was around 95,000 Rupees, almost 30% higher than the previous Akshaya Tithi festival. Saurabh Gadgil said that despite record high gold prices, consumers are still positive. Many people exchange old jewellery for new pieces to help manage their budgets for weddings and festivals, he added. On Wednesday, Indian dealers offered a discount Up to $20 per ounce above official domestic prices. This includes 6% import duties and 3% sales taxes. Sachin Jain CEO of World Gold Council India operations said that the gold demand during Akshaya Tritiya could have been lower in volume, but the value could be the same, or even slightly higher, he added. Retailers, big and small, offered discounts on the cost of jewellery to attract retail buyers. A jeweller in Hyderabad said that many people still prefer to invest their money by buying coins and bars. "Demand is lower than normal, but better than expected by the industry." Mehta of IBJA said that despite record-high prices retail sales did not suffer. (Reporting and editing by Ed Osmond, Rajendra Jadhav)
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London Metal Exchange increases fees after scrapping OTC trading plan
The London Metal Exchange has decided to increase fees for contracts using LME prices instead of requiring that private bilateral deals be traded between members and their clients on its platform. Sources in the industry said that members of the LME had complained that the plan was too expensive and that COMEX, for example, does not require this requirement. In a whitepaper published last year, the exchange first proposed its plans to force members to conduct private transactions, also known as OTC trades, through its electronic trading platform Select. The revised plans will be subject to a consultation until the 13th of June, and include hedged LME contracts for Select. If market monitoring shows that controls on the exchange are encouraging more OTC trading, then LME will move forward with its original proposal. The LME said that it would double the fees for OTC trades, which are not exchange-related. This was announced in a press release issued by the exchange on Wednesday. The fee for using LME rates in OTC contracts is $2.36 per lots. This would be about 10 U.S. dollars per ton for copper, where one lot equals 25 metric tonnes. Since publication of the paper, the LME owned by Hong Kong Exchanges and Clearing has spoken to its members and to the metals market as a whole about its plans to increase transparency and liquidity. Matthew Chamberlain, Chief Executive Officer of LME, said: "We have carefully listened to these views. They have allowed us to refine certain elements in order to better meet the different needs of different segments of the market." Earlier in the year, it was reported that the Futures Industry Association and the Association for Financial Markets in Europe sent a letter together to the LME expressing their members' concerns over these proposals. The LME has tried to address the concerns of its members about the hedging of LME contracts and block trades up to 10 lots, for the most liquid contracts. This includes the benchmarks for three months. The report said that "the feedback received suggested there should be differentiation between different metals." The LME analyzed factors like bid/ask, the size of the trade book, the average size, and notional size. The LME proposes 15 lots, or 375 tonnes, for aluminium; 10 lots, or 250 tonnes, for copper, lead, zinc, and other metals; and 5 tons, or 30 tons, for nickel. Plans also include expanding the definitions of short-dated carry-trades from 15 to 60 days as long as contracts to buy or sell are within 15-days of each other. This can save money for buyers and sellers on the physical market who want to change delivery dates. Reporting by Pratima Dasai and Eric Onstad, Editing by Jan Harvey & Freya Whitworth
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Czech Government to Take Majority in Nuclear Power Project worth $18 Bln
The Czech government has agreed to an updated model of financing for the construction of two new nuclear units. It will also take a major stake in this project, worth at least 18 billion dollars, from CEZ, according to Prime Minister Petr Filia. This will relieve CEZ of some of its financial burden. CEZ is owned 70% by the Czech state. The remaining 30% shares are free to float at the Prague Stock Exchange. CEZ agreed to build a new reactor in its Dukovany plant using state loans and guaranteed financing. However, it sought another solution when the government increased the project from one to two units. It said it couldn't afford to take on such a large amount of debt. The financing model was a major obstacle to a deal being reached with South Korea's Korea Hydro & Nuclear Power, a subsidiary of Korean utility KEPCO. This company was selected last year to construct the plant. Fiala announced that contracts with South Korea's KHNP will be signed on May 7th. Zbynek Stanjura, Finance Minister, said that the government will provide loans to finance the new units. After signing contracts with the European Union, the government will apply for approval. (Reporting and editing by Jason Hovet, Jan Lopatka)
Ghana signs agreement with nine additional gold mines to purchase 20% of their output
A government agency announced on Wednesday that Ghana had reached an agreement with nine additional mining companies for the purchase of 20% of their production. The deal is part of a larger gold purchase program to increase Ghana's gold reserves as well as stabilize its currency.
In 2022, the Central Bank of Ghana signed an agreement to buy 20% of annual production from Gold Fields, Newmont, AngloGold Ashanti and Asanko Mining, members of an industry group including Gold Fields. The central bank of Ghana settles all purchases in Ghanaian cedis.
Bank of Ghana gold reserves rose from 8.77 tons to 30.8 tons in February, helping it to reach $9.4 billion in gross reserves this year.
According to a GoldBod statement posted on X, the new agreement covers mining companies that do not participate in the central banks' arrangement. GoldBod is a government agency set up to increase small-scale miner earnings and reduce the impact smuggling.
Golden Team Mining Company Limited is one of the companies. Others include Akroma Gold Limited. Cardinal Namdini Mining Limited. Goldstone Akrokeri Limited. Earl International Group Limited. Xtra Gold Mining Limited. Prestea Sankofa Gold Limited.
The price of gold has risen 29% in the past year due to tariffs imposed by President Donald Trump and geopolitical uncertainties.
The GoldBod said that the mining companies agreed to deliver to them 20% of all gold they intend to export from the country in the form dore bars.
This agreement is a major step towards maximising the national benefits of Ghana's gold reserves.
The payment will be made in Ghanaian Cedis at a discount of one percent on the London Bullion Market Association's (LBMA) current spot price.
GoldBod spokesperson said that nine gold miners produced approximately 200 kilograms per month. (Reporting and writing by Christian Akorlie, Maxwell Akalaare Adombila, Editing by Ayen Bior and Ros Russel)
(source: Reuters)