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As rising yields and the dollar sap appeal, gold drops by 2%
Gold fell more than 2% on Friday, as a strong U.S. dollar and surging Treasury yields weakened its appeal. Higher oil prices and continued tensions in Middle East also reinforced expectations for higher interest rates. By 1141 GMT the spot gold price was down by 2.1%, at $4,551.81 an ounce, its lowest level since May 5. Bullion has already lost 3.4% this week. U.S. gold futures for delivery in June fell 2.8% to $4,556.40. Benchmark 10-year U.S. Treasury Yields have risen to a near-year-high, increasing the cost of gold that does not yield. Dollar strength also made greenback-priced gold more expensive for overseas buyers. "Yields are higher and the dollar is stronger on increased inflationary concerns. This is partly due to the Gulf hostilities, but also backed by the PPI and CPI figures released this week," said StoneX analyst Rhona OConnel. Brent crude oil prices rose 7.8% in the past week and hovered above $109 per barrel as the Strait of Hormuz remained largely closed. As manufacturers pass on the costs, higher fuel prices can contribute to inflation. In turn, this forces central banks keep interest rates high, reducing the appeal of non-yielding metals. This week, data on inflation showed that consumers and businesses have begun to feel the effects of war. According to CME's FedWatch Tool, traders have priced in U.S. rate cuts for this year. O'Connell said that "Gold has been wary about the Gulf -war for some time now, and the news from India this week regarding import duties has increased tensions in an already weak market." This week, gold discounts in India reached a new record. The reason was a steep increase in import duties. Ross Norman, an independent analyst, said that the news is awash with uncertainty, which is causing gold prices to rise. Spot silver dropped 6.3%, to $78.26 an ounce. Platinum fell 3.1%, to $1,991.33, while palladium fell 1%, to $1,422.41. All three metals were on track to post weekly losses. (Reporting by Anjana Anil in Bengaluru; Editing by Shreya Biswas)
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Nigeria offers pension funds a waiver on investing in the proposed Dangote refinery IPO
Nigeria's pensions regulator has granted fund managers a "special waiver" to invest in the planned initial public offering of?Dangote Oil?Refinery. This is an unusual policy change aimed at supporting a key asset for the country. A circular dated May 13 stated that the National Pension Commission would suspend eligibility criteria, such as "profitability" and a track record of dividends which typically govern how pension funds allocate their assets. The move is part of an broader effort to channel domestic long-term?capital towards large industrial projects viewed as?vital for growth and energy security. PenCom stated that the decision was made after a review of "strategic significance" and "strong foundations", as well as a review the track record of Dangote Group, the parent company. Fund administrators can invest in an IPO under a waiver but they must adhere to internal guidelines, risk control and fiduciary responsibilities towards?contributors, retirees and fund contributors. The regulator stated that the forbearance is "exceptional and one-off, and strictly case-specific," but it will not apply automatically to future offerings. Aliko Dangote's refinery is Africa's biggest and has helped Nigeria to rely less on fuel imports. PenCom stated that the directive was effective immediately. Reporting by Camillus Eboh; Writing by Elisha Gbogbo; Editing by Andrew Heavens
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Trump spoke to Xi on lifting sanctions against Chinese companies buying Iranian oil
Donald Trump, the U.S. president, said on Friday that he will soon make a decision about lifting sanctions against Chinese companies who 'buy Iranian oil'. Hengli Petrochemical, one of China's largest private refiners, and a symbol for Beijing's efforts to modernize?and upgrade?the industry, was among the Chinese oil refiners that were sanctioned by the U.S. Trump said to reporters on Air 'Force One, shortly after departing Beijing following his two day?summit? with President Xi Jinping. The Chinese summary of the summit did not mention any deals, but U.S. officials such as Trump mentioned the possibility that China could buy more American energy during the summit. Trump stated that his patience was running out with 'Iran. He said that he and Xi had agreed that Tehran 'couldn't be allowed to possess a nuclear weapon. He said that he would be fine with Iran suspending its nuclear program for a period of 20 years but that Tehran must make a "real commitment". Trump said that "twenty years" is sufficient, but the level of assurance?from Tehran must be a real twenty years. (Reporting Trevor Hunnicutt and Susan Heavey; Writing by Doina chiacu; Editing Michelle Nichols).
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INDIA BONDS - India bonds have their worst week since six years; oil and rupee slumps hurt short-end debts, swaps
The Indian government bonds suffered a'sharpest weekly decline in six weeks,' due to a?continued surge in U.S. Treasury and oil yields. This was compounded by the'stagnant fall of the local currency, which has reached record lows. Fears of central bank rate hikes were also heightened by the 'constant' bearish movement in key fundamentals, resulting in the underperformance of shorter-duration bonds and swaps. Gurvinder Singh wasan, a senior fund manager with Baroda BNP Paribas Mutual Fund, said: "Geopolitical tenseness, higher commodity prices, in particular oil prices, and the depreciation of currency has resulted in an deterioration in inflation, current account deficit, balance of payments and fiscal debt." On Friday, the yield on the benchmark 2035 bond of 6.48% ended at 7.0644% while the yield on the five-year bond of 6.36%?"2031 closed at 6.8633%. The spread has narrowed from 30 bps to 20 bps - the lowest level in two months. Prices and yields are inversely related. The Indian rupee fell in all five sessions of this week and reached an all-time high on Friday at 96.1350, as rising oil costs intensified economic challenges. Key indicators are beginning to show signs of strain. The yield on the 10-year U.S. Treasury note jumped by almost 20 basis points to 4.55%, due to the fact that the Federal Reserve is unlikely cut rates further. Brent crude's benchmark contract rose 7% and moved closer to $100 per barrel as bets on supply worries increased. Donald Trump has stated that he's losing patience with Iran. "We assume crude averages $95.bbl - for the full year - and bring forward our first rate hike from February to December, with a risk of an earlier move if West 'Asian Crisis persists causing a disorderly increase in energy prices."?ICICI Primary Dealership stated. India's overnight swap rates for indexes jumped throughout the week. The spread between one-year and five-year swaps was reduced due to rate hike fears, which could flatten the curve. The five-year rate ended at 6.71 percent and the one-year swap closed at 6.17%. Spreads have shrunk to 54 basis points from 66 basis points last Friday.
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Sources say that Brazil police are targeting Rio's former governor and Refit owner as part of a tax investigation.
Two sources familiar with the investigation said that the Brazilian federal police had targeted the former governor of Rio de Janeiro, Claudio Castro, and the owner Refit Refinery Ricardo Magro as part of an investigation into alleged tax evasion. Castro and Magro did not immediately respond to a request for comment from. The police, without naming any suspects, said that they had launched an investigation into a conglomerate in the fuel industry suspected of concealing assets, faking assets and transferring money abroad. According to a statement, the Supreme Court ordered that assets worth approximately 52 billion Reis ($10.4 Billion) be frozen and that the economic activities of companies under investigation be suspended. The court also decided that the suspect would be added to Interpol's Red Notice. CONTEXT Brazil's tax authorities have played a key role in major investigations uncovering money laundering schemes connected to criminal organizations operating in the fuel sector, and identifying multiple overseas operations. Brazilian President Luiz Inacio Lula da Silva publicly asked U.S. president Donald Trump to arrest Refit's owner, a?of?the?main?companies involved in this scheme who lives in the United States. Claudio Castro resigned ?from office in Rio de Janeiro in March. In March, Brazil's Electoral Court barred Castro from holding office for 8 years for abuse of power and economics, prohibited conduct, and illicit fundraising for the 2022 elections.
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India's trade deficit widens due to a surge in crude imports due to the Mideast war
India's trade deficit grew to $28.38billion in April as a surge of crude shipments?pushed imports up to a six-month peak with the?Middle East Conflict disrupting supplies?and raising oil and gas?prices. As the rupee plunges to new lows and becomes Asia's worst performing currency, policymakers are concerned that the energy shock caused by the Iran war, which lasted for months, could slow down growth, increase inflation, or affect India's balance-of-payments. India is the third largest oil consumer and importer in the world. It ships more than 80% of its crude and 60% of its cooking gas from the Middle East. A poll showed that economists estimated the April trade deficit to be $26.5 billion. In?March, the trade deficit was $20.67 billion. Government data released on Friday showed that merchandise exports increased to $43.56 billion from $38.92 in the previous months, while imports reached a six-month record of $71.94 billion compared to $59.59 in March. Rajesh Agrawal, the federal trade secretary, told reporters that exports reached a decade-high in April. This was largely due to higher-value petroleum shipments and electronic goods. Aditi Nair, Chief Economist at ICRA, says that increased exports will not be able to control the trade deficit, putting pressure on the current accounts. She expects that the current account deficit will be about 2% of the GDP for the current fiscal period, which is more than double the estimated level for the previous year. Oil shipments jumped 53% in April to $18.63 Billion from $12.18 Billion in March. This marked a dramatic increase in the import bill. Since the Iran War began at the end of February, global crude prices have risen to $120 per barrel. Refiners imported more gold dore, which led to an 84% increase in imports. After the release of the trade data, the Indian rupee dropped to a new low. It fell below the 96-to dollar level for the first time. The Indian Prime Minister Narendra Modi urged a series of measures, including fuel conservation and?work from home practices, as well as limits on travels and imports to conserve foreign currency reserves. South Asia, the second largest gold consumer in the world, has increased tariffs on gold and silver, and tightened rules regarding duty-free gold for jewellery exports. State-run fuel retailers raised the price of gasoline and diesel for the first time since four years on Friday by more than 3 percent. According to the government, services exports were $37.24 billion and imports $16.66 billion in April. This partially offsets the merchandise trade deficit.
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Dangote files a new lawsuit against Nigeria regarding fuel import licenses
Court documents obtained by us show that Dangote Petroleum Refinery filed a new lawsuit in Nigeria against the attorney general to challenge fuel import 'licences' issued to NNPC and NNPC-owned marketers. This case marks a return of tensions nearly a year after Dangote withdrawn an earlier lawsuit that challenged similar licences. This case was filed to invalidate import permits issued to the Nigerian National Petroleum Company (NNPC) and to several traders. The 'new filing' asks the Federal High Court of Lagos to'set aside import permits that were issued or renewed by Nigerian Midstream & Downstream Petroleum Regulatory Authority (NMDPRA), arguing these breaches an earlier order to maintain status quo. NMDPRA didn't immediately respond to a comment request. Regulators, marketers and others have argued that imports were necessary to maintain a sufficient supply and avoid shortages. Dangote stated in its filing that the licenses?issued?this month undermined its operations, and violated the law. It argues that imports are only allowed when the?domestic?supply is inadequate. Dangote terminated the previous lawsuit in July 2025, without explanation. Questions remain about competition and supply on one of Africa's largest fuel markets. Nigeria has relied on petrol imports for a long time due to the underperformance of state refineries. Dangote's $20-billion facility with a capacity of?650,000 barrels per day was supposed to end this dependence. However, imports continue to cover the supply gap as refinery output increases. (Reporting and editing by Alexander Smith; Isaac Anyaogu)
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Energy Minister says that Serbia will submit its final proposal to Hungary on NIS.
Energy Minister said that Serbia will present its final offer to MOL, the Hungarian oil company, on Friday, in response to the Hungarian bid for NIS, the operator of the Balkan nation’s only refinery. Gazprom and Gazprom, two Russian companies, agreed in January to sell their 56% stake in NIS majority to MOL after the U.S. demanded that Russian shares be divested due to sanctions imposed by the U.S. over Moscow's involvement in the war in Ukraine. We had intensive discussions yesterday and the previous day with representatives of MOL. "We agreed on certain topics," Energy Minister Dubravka Handanovic, was quoted by Serbia's Tanjug News Agency. "There are still a few issues that need to be resolved, but the most important one for us is how we will operate the refinery in the future." She said that the government would give MOL its final position regarding NIS by Friday's end. The board of MOL will then take a decision about the proposal on Monday. She didn't give any?more details about what was included in the proposal. Talks for a Deal Come Down to the Wire Washington has given MOL and the Russian companies until May 22 for the completion of the sale. This will require the Serbian government's consent due to its 29.9% stake NIS. The MOL-Serbian government talks, in which the Serbian Government wants to increase NIS's stake by 5% are separate from those of the Hungarian Company with Gazprom, and Gazprom NEFT. A MOL spokesperson said that the transaction would also need to be approved by the U.S. Treasury’s Office of Foreign Assets Control. Gyorgy Baksa, the chief strategic officer of?MOL, spoke at a Belgrade business forum on Friday. He said that the company is still in talks with the Russian shareholders as well as Serbia, and hoped OFAC could allow more time for the discussions. He said that "if there are?major advances until (May 22), the recent practices... show that a realistic timeframe will be granted to make everything happen." "We want to reach a good deal, and my colleagues are currently in Belgrade." Djedovic handanovic stated earlier this week that Serbia wasn't satisfied with some of MOL’s proposals when they met. In October, the U.S. sanctioned NIS due to its Russian ownership. This was part of broader measures that targeted Moscow's energy industry. NIS has, however, secured a number of waivers with OFAC. (Reporting from Angeliki Koutantou, Athens; Aleksandar Vaovic, Belgrade. Editing by Joe Bavier.)
Zambian state investment firm eager to increase stakes in mining, CEO claims
Kakenenwa muyangwa, the CEO of ZCCM Investments Holdings, said that ZCCM Investments Holdings was keen to increase its stakes in mining assets, but only on a commercial basis and not by forcing sales.
African nations are making efforts to increase their share of the revenue generated by the region's natural resources, especially as new investments are being made due to global demand for vital minerals. ZCCM has stakes as low as 10%, in mines owned by China Nonferrous Metal Mining Group and Canada's First Quantum Minerals.
Muyangwa said on Thursday that there was a clear intention to increase our stakes in existing mining assets. ZCCM IH increased its stake in Lubambe Copper Mines from 20% to 30% last year after EMR Capital sold its majority shares to China's JCHX Mining in 2024.
Muyangwa stated that ZCCM IH has increased its stake from 20% to 25% in Mingomba Mining, a KoBold Metals company backed by U.S. investors.
Muyangwa said that there is a gradual shift to higher ownership. "We believe being a significant minority gives you more voice and leverage than if you only have a small minority stake."
Muyangwa stated that ZCCM IH does not plan to acquire mines which are currently operating and in which they do not have a share. Instead, the company will focus on assets still under development, where the ownership structure depends on the holder of the mining license.
"Where we own the licence, we are entitled to ask for an element?of free carry before we contribute to the remainder of the capital required to develop the mining," said Muyangwa. He added that a range of?between 5%-15% is appropriate, and the exact amount can be negotiated.
Zambia, Africa’s second largest copper producer, plans to?triple?its production of metal required for electric-vehicle battery and the clean energy transition by 2031.
ROYALTY-TO-REVENUE
ZCCM-IH wants to expand its expansion plans by extending the royalty-to-revenue models pioneered at Kansanshi Mine with First Quantum Minerals.
ZCCM IH gets 3.1% of the revenue at Kansanshi in lieu of dividends. It holds a 20% stake in this company. Muyangwa stated that this?has delivered $100 million since 2022.
"What we are trying to achieve is to switch from dividends to royalty payments for predictable cash flow that are insulated against operating cost inflation," said he, adding ZCCM IH was looking to hire a financial advisor to help with capital raising for expansion projects. (Reporting and editing by Veronica Brown and Kirsten Donovan; Reporting by Olivia Kumwenda Mtambo)
(source: Reuters)