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Gold drops 1% after US-EU agreement boosts risk appetite before Fed meeting
On Monday, gold fell to a three-week-low as a U.S. - European Union trade agreement lifted the dollar and risk-sentiment. Investors awaited new cues about rate policy at this week's Federal Reserve Meeting. As of 10:10 am, spot gold dropped 1% to $3304.87 an ounce. ET (1410 GMT), reaching its lowest level since the 9th of July. U.S. Gold Futures fell 0.6% to $3,320.20 an ounce. The U.S. Dollar Index rose to its highest level in a week, increasing the price of bullion for foreign buyers. "I believe the more trade news we receive, the higher the dollar will rise." These tariff deals lower the appeal of gold, driving the sell-off amid risk-on sentiment. A weekend agreement between U.S. president Donald Trump and the European Commission placed a 15% tax on EU goods. This is half of the initial rate threatened. It eased fears of an escalating trade war. This agreement follows the U.S. - Japan agreement of last week, and U.S. & Chinese officials will resume their talks in Stockholm, Sweden, on Monday to try and extend their 90-day trade truce. A U.S. Trade Representative said that no major breakthroughs were expected with China. Discussions would be focused on monitoring and implementing current commitments. Meir said that the gold price is not moving much because of the uncertainty surrounding the implementation or the unrealistic nature of the deals. When its two-day meeting ends on Wednesday, the U.S. Federal Reserve will likely keep its benchmark interest rate between 4.25% and 4.50%. The markets continue to factor in a possible September rate cut. In an environment of low interest rates, gold tends to perform well. Other than that, silver spot was down by 0.2% to $38.05 an ounce. Platinum fell by 1.8% to $1375.88, and palladium rose 0.5%, reaching $1,226.25. (Reporting and editing by Ros Russell in Bengaluru, Sherin Elizabeth Vaghese from Bengaluru)
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Panel of OPEC+ stresses the need to comply with all output limits
A panel of OPEC+ members on Monday emphasized the importance of full compliance with oil production agreements, in advance of Sunday's separate meeting of eight OPEC+ member countries to decide whether or not to increase oil output for September. Online, the Joint Ministerial Monitoring Committee (JMMC), which is composed of top energy ministers of the Organization of the Petroleum Exporting Countries, as well as their allies, led by Russia convened for a brief discussion. The JMMC is a two-monthly meeting that has the authority to call a full OPEC+ meeting to discuss market developments if necessary. In a press release issued after the meeting, OPEC stated that "the committee reiterated the importance of achieving complete conformity and compensating", Compensation cuts are the ones that certain countries like Iraq and Kazakhstan are asked to implement to compensate for previous overproduction. The JMMC requested that countries who are not fully compliant submit updated compensation plans before August 18. In a late Friday post on X, OPEC said that the committee did not have decision-making power over production levels and its role was limited to "monitoring conformity with production adjustment and reviewing overall market condition". OPEC+ has cut production to support the oil market for many years. It reversed its course in order to regain the market share and when U.S. president Donald Trump asked OPEC to pump more oil to keep gasoline prices down. Since April, eight members have increased their output. The most recent decision is to increase oil production by 548,000 barrels a day in August. Three OPEC+ source said last week that the eight countries will hold a separate gathering on August 3. They are likely to agree on a further 548,000 bpd for September. By September, OPEC+ will have undone its latest production cut of 2.2 millions bpd and the United Arab Emirates will have delivered a quota increase of 300,000 bpd ahead of schedule. The oil prices are still being supported despite OPEC+'s increases, thanks to the summer demand. Some members have also not increased production as much in line with the headline quota increases. Brent crude traded above $70 per barrel on Monday. Reporting by Ahmad Ghaddar and Olesya Astakhova. Alex Lawler. Mark Potter edited the report.
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Medvedev accuses the EU-US of being 'anti-Russian" over possible fallouts for Russian oil
Dmitry Medvedev, the former Russian president, said that the framework agreement between the European Union (EU) and the United States is "anti-Russian", comparing it to a ban de facto on the purchase of Russian oil and natural gas. On Sunday, the U.S. and the EU reached a deal that imposes a 15% tariff on the majority of EU goods. Ursula von der Leyen said, in a subsequent statement, that the agreement will help the EU phase out Russian fossils fuels and replace them with American alternatives. The purchase of U.S. Energy Products will help to diversify Europe's supply sources and increase its energy security. Von der Leyen stated that we will purchase significant amounts of U.S. oil, LNG and nuclear fuels to replace Russian oil and gas. Russia has said repeatedly that U.S. Liquefied Natural Gas is more expensive than Russian LNG. The EU has been trying for years to reduce its Russian oil and gas purchases, despite the sweeping sanctions it has imposed on Moscow due to its conflict in Ukraine. Medvedev stated that Trump "wiped the floors" with the EU but that the agreement is not good for Russia as well. Medvedev wrote in Telegram that the "deal" is anti-Russian and prohibits the purchase of Russian oil and gas. He said that the impact on Europe and its people would be negative, as they will have to pay more money for their energy. Medvedev stated that "one can only feel sympathy for ordinary Europeans." (Reporting and editing by Andrew Osborn)
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Ghana cancels $1.2 billion bauxite deal, eyes global partnership, sources say
Three sources with direct knowledge said that Ghana had cancelled a $1.2billion bauxite leasing agreement with Rocksure International and was instead seeking a partnership with a large overseas company in order to tap into one of West Africa’s richest deposits. Two sources indicated that potential partners could be Dubai-based Emirates Global Aluminium or a Chinese company. Ghana has made a strategic shift by terminating the agreement. The country holds 900 million tons of bauxite - the 7th largest in terms of global reserves - but has struggled with attracting sustained investment into mining and refinery infrastructure. Rocksure's lease covers the Nyinahin Hills, central Ghana. These hills are home to approximately 376 million tonnes of bauxite - the raw material for aluminium. The Asante Bauxite Company Joint Venture was based on a joint-venture between Rocksure, the state-owned Ghana Integrated Aluminium Development Corporation and GIADEC to build a mining and alumina refining facility. Rocksure held 70% of the JV. GIADEC owned 20%, and the government 10%. A 2019 Supreme Court decision declared the lease null and void because it was never ratified in parliament. One source said that, "by the Exton Cubic decision, without ratification you have no lease", adding that the Ministry of Lands and Natural Resources informed Rocksure. GIADEC refused to comment citing ongoing discussions. The Lands Ministry did not reply to comments. Rocksure declined to comment as well. One source said that the company had not received a formal notification of termination. Only that GIADEC would be leaving the JV. Ghana, Africa's largest gold producer, is lagging behind other regional countries like Guinea in terms of bauxite output. Guinea is a global leader in bauxite. The GIADEC source stated that GIADEC is actively courting new investors including EGA, and several Chinese companies. EGA lost its mining licence in Guinea due to delays in building a refining plant. In June, it signed a Memorandum of Understanding with GIADEC to explore opportunities in Ghana. In an email reply to questions, the company said: "EGA expressed interest in developing bauxite in Ghana. It is currently assessing technical and commercial parameters for such a collaboration." EGA stated that no binding agreements had been signed and did not provide investment figures, resource estimations or timelines. According to a third source, EGA considered investing in Ghana as early as 2022. However, it backed out of the deal because they didn't want their Guinea license to be jeopardized. The source stated that they didn't wish for Guinea to think that their focus was shifting to Ghana. EGA stated that "Sourcing Bauxite from Ghana aligns our objective to increase aluminium production by diversified our supply base." GIADEC aims at beginning extraction and offtake from the Block B area - also known as Block B – in the first quarter next year. According to the first source, although no agreements have been signed, discussions with potential partners have advanced. The first source stated, "We are looking at all the options to determine which serves the national interest." Ghana Chamber of Mines predicts that national bauxite production will increase to 2 million tonnes in 2025 from a record-breaking 1.7 million tons last year. (Reporting and editing by Maxwell Akalaare Adombila, Veronica Brown and Susan Fenton).
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Wall Street sets records as euro falls after US-EU trade agreement
Investors welcomed a new trade agreement between the U.S.A. and European Union cautiously, as the markets began a week of intense activity. The STOXX 600 reached a four-month peak with a 0.5% increase, while the euro fell 0.7% against the US dollar. This was the biggest blow to the 10% rally this year since May. The EU will spend $600 billion in U.S. investment and impose a 15 percent import tariff on the majority of EU goods. It will also open up important parts to its market. Chris Turner, an ING analyst, said: "The deal is much better than the 30%-50% tariff rate that was threatened in the last few months. However, it is likely to be as bad as universal tariff rates discussed late last year." The U.S./EU agreement averts a potentially damaging standoff between two blocs that account for almost a quarter of global trade. However, a number European capitals have complained about its lopsidedness in favor of Washington. There are still major deals to be finalised before Trump's deadline of August 1. The U.S.-China talks in Stockholm, Sweden on Monday should lead to an extension of the 90-day trade truce between the two countries. Meanwhile, the deal struck by Europe follows the one with Japan last weekend. MUFG FX Strategist Derek Halpenny stated that the EU deal is ultimately "good from a perspective of financial markets as it further reduces uncertainty ahead of the 1st August which now looks like an insignificant day". Apolline Menut, fund manager Carmignac, called it a victory for the U.S. given the forced purchase of U.S. military and energy equipment and the zero tariff retaliation from Europe. She said: "This isn’t a breakthrough in trade - it’s damage control to the benefit of diplomatic pragmatism." "The economic costs may be painful, but the strategic calculus remains brutally rational." The export-heavy DAX in Germany and the CAC 40 in France had both risen initially, but had slid back into negative territory early afternoon trading. Meanwhile, S&P 500 futures and Nasdaq's futures indicated that Wall Street would resume with new record highs. As Asian markets reopened the euro also gained strength, but fell further into the red when the dollar pushed higher across the board. The yields on government bonds in the Eurozone, which is a proxy of borrowing costs, have also been pushed down. The benchmark yield for the euro zone, Germany's 10-year bond, fell 0.5 basis points to 2.71%. It had risen more than 10 basis point at the end last week, when the European Central Bank tempered talk of rate cuts imminent. FED, BOJ AWAIT The S&P 500 futures, Nasdaq, and Dow were all between flat and 0.3% up as the EU deal signed at Donald Trump's golf club in Scotland over the weekend added to the ones that were struck in Asia with Japan, Indonesia, and the Philippines last week. Morgan Stanley analysts said that the likelihood of the S&P reaching its "bull case" by mid-next year of 7,200 points had increased, but was still "not without risk" due to possible tariff-driven inflation and high U.S. long-term bond yields. Overnight, MSCI’s broadest regional share index ended 0.3% lower, while Japan's Nikkei fell more than 1% from its one-year-high last week. The Australian dollar was trading at $0.657 and hovered around its near eight-month high. Traders also await interest rate decisions by the U.S. Federal Reserve and Bank of Japan. They are also looking forward to monthly U.S. payrolls and earnings of megacap companies Apple, Microsoft and Amazon. Investors will need to pay attention to the comments of officials to determine the future interest rate path. The BOJ can now raise rates this year because of the trade agreement with Japan. The Fed will likely be cautious about any further rate cuts, as they are awaiting more data on the impact of tariffs and inflation to make a decision. Trump has repeatedly criticized Fed Chairman Jerome Powell's refusal to cut rates. Two Trump-appointed Fed Board members have outlined reasons to support a rate reduction this month. Oil prices have risen in commodities after the U.S. EU trade agreement. Brent crude futures as well as U.S. West Texas Intermediate crude both rose 0.5%. On reduced demand for traditional safe-havens, gold prices fell 0.1% to $3.334 an ounce. This is their lowest level in almost two weeks.
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Moeve, a Spanish oil company, has seen its profit fall due to blackouts
Moeve, the second largest oil refiner in Spain, previously known as Cepsa said Monday that its adjusted net profits fell 19% during the first half of this year. This was primarily due to the effects of a massive blackout of power in April in Spain, Portugal and other countries. The adjusted net income fell to 324 millions euros ($378million), and earnings before interest taxes, amortization, and depreciation dropped 33% compared to a year earlier to 733 millions. These figures do not include one-off revenue and losses, such as those resulting from asset sales. According to preliminary estimates, the company attributed its core profit decline to the costs of stopping and restarting two oil refineries before and after the blackout on April 28, which cost them about 50 million Euros. Rival Repsol which operates five refineries across Spain said that the blackouts and other minor power supply issues cost them 175 million euro in the second quarter. After a shutdown, it can take up to two weeks before such plants are fully operational again. Moeve refineries were also shut down for maintenance in the first six month of the year. This further decreased utilisation rates, and the refining margins fell to $6 per barrel from $9.2 per barrel during the same period last year. Moeve, owned by the Abu Dhabi fund Mubadala as well as U.S. based private equity group Carlyle Group and a plan worth 8 billion euros, rebranded itself last year in order to reflect its move towards low-carbon business. Moeve has sold 70% its oil production assets, including Abu Dhabi and South America operations since 2022.
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Trump reduces Russia's 50-day deadline on the war in Ukraine
Donald Trump, the U.S. president, announced on Monday that he would reduce the deadline of 50 days he had given Russia for its war in Ukraine. This was to show his frustration at Russian President Vladimir Putin's prolongation of the fighting between both countries. Trump and British Prime Minister Keir starmer said: "I am disappointed in President Putin" ahead of their Scotland meeting. "I will reduce the 50 days I gave him because I know what is going to happen." He didn't give a new date. Trump announced the deadline of 50 days earlier this month. The U.S. President has expressed his frustration with Putin over the continued attacks on Ukraine, despite U.S. attempts to end this war. Before returning to the White House in January, Trump, who views himself as a peacemaker, had promised to end the three-and-a-half-year-old conflict within 24 hours. Trump has threatened to impose new sanctions against Russia and its buyers if an agreement cannot be reached by the beginning of September. The president hasn't always followed through on his harsh words about Putin, citing the good relationship the two men had in the past. Trump said, "We thought that we had this settled many times. And then President Putin launches rockets at some city such as Kyiv killing a lot people in nursing homes or whatever." "And I'm saying that's not how to do it." Reporting by Andrew MacAskill in Scotland and Andrea Shalal; additional reporting by Jeff Mason, William James and Susan Heavey; writing by Susan Heavey, Jeff Mason and Mark Heinrich; editing by Doina Schiacu and Mark Heinrich
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Floods in Romania kill 1, evacuate hundreds
Officials said that severe overnight flooding in eastern Romania caused the death of one person, and destroyed thousands of homes. Hundreds of people were evacuated, and three helicopters searched for stranded villages. The emergency response agency reported that 25 villages in nine counties were affected, with heavy rains and high winds tearing off roofs and uprooting trees and blocking some national roads. In eastern Romania, the counties of Neamt and Suceava were worst affected. Two rivers burst through their banks and killed a man aged 66, forcing hundreds to flee. All roads leading to the village Brosteni, in Suceava County, were closed. Water management agency of the Environment Ministry said that some rivers had reached record-high water levels. It said that repairs were being carried out on bridges which had collapsed. It said that repair works on collapsed bridges were underway.
US and China to start new talks on tariff truce, easing the path for Trump-Xi Meeting
The top U.S. economic officials and Chinese representatives will resume their talks on Monday in Stockholm to address long-standing economic disputes that are at the heart of a trade conflict between the two largest economies. They hope to extend the truce for three months while preventing tariff increases. China faces an August 12 deadline for a lasting tariff agreement with the Trump administration. Beijing and Washington had reached preliminary agreements in May and early June to end weeks' worth of escalating tariffs, and to stop the cutoff of rare-earth minerals.
If there is no agreement, the global supply chain could be thrown into turmoil by U.S. tariffs returning to triple-digit rates that would amount to an embargo on bilateral trade. The Stockholm talks follow Trump's largest trade deal to date with the European Union, which was announced on Sunday. It included a 15% tariff for most EU exports into the U.S. including autos. The EU will also invest $600 billion in U.S. energy and buy $750 billion of American energy over the next few years. The U.S. and China talks are not expected to produce a similar breakthrough, but trade analysts believe that a 90-day extension is likely of the tariff and export control ceasefire struck in mid May.
A further extension would help prevent further escalation, and allow for planning a possible meeting between Trump and Chinese president Xi Jinping at the end of October or beginning of November. A U.S. Treasury spokeswoman declined to comment on South China Morning Post's report, which cited unnamed sources who said that the two sides will refrain from introducing any new tariffs for 90 more days.
Trump's administration will soon impose new tariffs on China, including those on semiconductors. Pharmacies, ship to shore cranes and more.
"We are very close to making a deal with China." "We're very close to a deal with China. We'll see what happens," Trump told reporters Sunday, before European Commission President Ursula von der Leyen signed the tariff agreement. Financial Times reported Monday that the U.S. had paused curbs of tech exports to China in order to avoid disrupting talks with Beijing, and to support Trump's attempts to secure a meet-up with Xi. The newspaper reported that the Commerce Department's industry and security bureau, which is responsible for export controls, was told not to take any tough measures against China. This information came from current and former officials. The report could not be verified immediately. Outside of business hours, neither the White House nor the Department responded to requests for comments.
DEEPER ISSUES The previous U.S.-China talks held in Geneva and London, in May and in June, focused on reducing the U.S. and Chinese tariffs from triple-digit rates and restoring the flow for rare earth minerals that China had stopped and Nvidia H20 AI chips as well as other goods that the United States had stopped.
The talks so far have not covered broader economic topics. The U.S. has complained that China's export-driven, state-led model floods the world's markets with cheap products, while Beijing complains that U.S. export controls on technology goods are meant to stunt Chinese economic growth.
"Geneva and London really were just trying to get their relationship back on track, so that at some point they could actually negotiate about the questions which are the source of the initial disagreement between the two countries," said Scott Kennedy. He is an expert in China economics at the Center for Strategic and International Studies, Washington.
Kennedy stated that "I would be surprised if some of these things were harvested early, but an extension of ceasefire for 90 more days seems the most likely result." U.S. Treasury secretary Scott Bessent already announced a deadline extension. He also said that he wanted China to rebalance their economy from exports towards more domestic consumption, a goal of U.S. policymakers for decades. Analysts claim that the U.S. and China negotiations will take more time than other Asian nations because they are more complex. China's hold on the world market for rare earth magnets and minerals, which are used in everything from car windshield wiper motors to military hardware, has proven to be a powerful leverage point against U.S. industry.
TRUMP-XI MEETING?
There is speculation in the background about a meeting between Trump & Xi that could take place at the end of October. Trump has stated that he would decide on a historic trip to China soon, and any new tariffs or export controls could derail the planning.
Sun Chenghao is a fellow with the Center for International Security and Strategy at Tsinghua's Center for International Security and Strategy, Beijing. He said the Trump-Xi Summit would give the U.S. an opportunity to lower its 20% tariffs against Chinese products related to fentanyl. He said that in exchange for the Chinese commitment to purchase more U.S. farm goods and other goods by 2020, they could fulfill their 2020 pledge.
Sun stated that the future summit of heads of state is very helpful to negotiations, as everyone wants to achieve an agreement or pave a way for the negotiations in advance.
Analysts said that China would likely ask for a further easing of U.S. export controls on high-tech products and a reduction in the multi-layered U.S. duties totaling 55 percent. Beijing argues that these purchases will help reduce the U.S.-China trade deficit, which is expected to reach $295.5 billion by 2024. (Reporting and editing by Diane Craft, Stephen Coates, and Shivani Tanna; Additional reporting in Bengaluru by Shivani.
(source: Reuters)