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Gold drops on trade deal progress and tariff reprieve extensions
Gold prices fell on Monday as U.S. president Donald Trump announced progress on several trade agreements, and extended tariff exemptions for a number of countries. This dampened demand for this safe-haven precious metal. By 0232 GMT, spot gold had fallen 0.6% to $3314.21 an ounce. U.S. Gold Futures fell 0.6% to $3322. Trump announced on Sunday that the U.S. will be finalising a number of trade agreements within the next few days, and will notify the other countries about higher tariff rates before July 9. The higher rates are scheduled to come into effect in August 1. Trump announced a 10% tariff as a base on the majority of countries in April, with additional duties up to 50%. Later, he delayed the date of implementation for all tariffs except 10% until July 9, 2018. The new date gives most nations affected a three-week reprieve. Kelvin Wong, senior market analyst at OANDA, said: "This short term reprieve by the U.S. is causing the intraday weakness of the gold price in this moment." The top side will come in at $3.360 as a short-term support. Federal Reserve rate cuts are expected to be slower due to concerns about tariff-driven inflation. The rate futures market shows that traders are no longer expecting a Fed cut this month, and they only expect two quarter-point cuts by year's end. Trump signed a massive tax and spending package at the White House last week. According to unbiased analysis, this will add over $3 trillion to the $36.2 trillion national debt. Silver spot fell by 0.8%, to $36.61 per ounce. Platinum dropped 0.8%, to $1380.55, and palladium was down 1%, at $1123.31. (Reporting and editing by Sherry Phillips, Subhranshu Sahu and Anmol Choubey from Bengaluru).
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Iron ore futures fall on China steel production curbs and trade uncertainty
Iron ore futures fell on Monday, as new concerns about demand pressured the market. This was due to output restrictions at China's main steel production hub Tangshan. As of 0219 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was down by 0.68% to 731 yuan (US$101.96) per metric ton. The benchmark iron ore for August on the Singapore Exchange fell 0.1%, to $95.75 per ton. Tangshan Baochun Data, a provider of information in Tangshan City in northern China, posted a message on its WeChat page on Saturday. The note stated that steelmakers were given notices for production controls related to environmental protection. Tangshan Baochun, a local mill, said that some mills had undertaken maintenance work on their sintering machinery. Analysts noted that this move was expected to reduce demand for iron ore. ANZ analysts noted in a recent note that the markets are also on edge, as the deadline for U.S. trade agreements approaches. Donald Trump, the U.S. president, said on Sunday he was close to finalizing a number of trade agreements. He will inform other countries by July 9 that higher tariffs are coming into effect in August. Malaysia announced over the weekend that it had imposed anti-dumping provisional duties of between 3.86% and 57.90%, among other things, on certain imports of iron and steel from China. Iron ore prices have been held back by the strong steel margins and the resilient demand in near-term. Data from Mysteel revealed that despite signs of a slowdown, the average daily hot metal production, which is a measure of iron ore consumption, was still at 2,41 million tons as of July 3. This was higher than it had been a year earlier, and despite signs of a softening. Coking coal and coke, the other steelmaking ingredients, also recorded losses. The benchmarks for steel on the Shanghai Futures Exchange have fallen. Rebar fell 0.45%, Hot-rolled Coil dropped 0.59% and Wire Rod fell 0.81%. Stainless Steel lost 0.51%.
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Sources say that Nissan is considering Foxconn's EV production to save Oppama
Two people with knowledge of the situation said that Japan's Nissan Motor has been in discussions to allow Taiwan Foxconn use one the automaker's domestic plants to build electric cars. This could prevent the closure of the plant. In May, it was reported that Nissan considered closing its Oppama factory in Yokosuka, a port city south of Tokyo. Ivan Espinosa, the CEO of Nissan, announced massive restructuring plans to turn around its struggling automaker. These included closing seven out of Nissan's seventeen factories worldwide and cutting 15% off its workforce. The people, who declined to be named, said that allowing Foxconn to manufacture its own EVs in Oppama would prevent the closure of the plant, and reduce the impact of the restructuring on Oppama's 3,900 workers and suppliers. Nikkei, a Japanese business newspaper published the first report on this discussion late Sunday. Nissan said in a press release that the Nikkei article was not based upon information provided by the automaker. Foxconn did not reply to our request for comment. In May, Nissan’s junior partner Mitsubishi Motors and a Foxconn subordinate signed an agreement for the Taiwanese company to provide it with an electric vehicle model. (Reporting and writing by Maki Shraki, David Dolan, David Goodman, Christopher Cushing).
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Copper prices drop amid uncertainty about US trade talks
The Shanghai Futures Exchange (SFE) and London Metal Exchange (LME) saw copper prices fall on Monday due to concerns about U.S.-China trade negotiations, and the uncertainty around potential tariffs before President Trump's deadline of July 9. The LME's three-month contract for copper fell by 0.31% at $9,834 a metric ton as of 0103 GMT, and the SHFE's most traded contract lost 0.91%, to 79440 yuan (about $11,088.00). Donald Trump, the President of the United States, said that the U.S. was close to finalising a number of trade agreements. He will inform about a dozen other countries on Monday that they can expect higher tariffs to be implemented on August 1. ANZ reported that "Markets are worried about Trump's policies, which could cause a global slowdown and harm demand for industrial commodities." A Shanghai-based metals analyst from a futures firm said that "copper prices are expected to soften due to the recent rise in copper stocks on LME and SHFE and the diminished consumption enthusiasm as a result of higher prices." Copper inventories By July 4, SHFE-monitored storages had gained for the third week in a row, rising by 3.7% to reach 84,589 tonnes. This is 73.7% less than the previous year. Total Copper Stocks The LME registered warehouses saw a rise of 5% in four days, up to Friday. SHFE nickel dropped 1.05%, to 121.190 yuan per ton. Zinc fell 0.83%, to 22.165 yuan. Tin fell 0.82%, to 266,770. Yuan. Aluminium fell 0.68%, to 20,500. Yuan. Lead fell 0.29%, to 17.220. LME nickel fell 0.36% to $16,235 per ton. Zinc eased 0.24% at $2,717.5. Lead slid 0.17% at $2,055, and tin rose 0.07% at $33,725. Click or to see the latest news in metals, and other related stories. Data/Events (GMT 0600 Germany Industrial Production MM, Production Year-on-Year SA May 0600 Halifax House Prices UK MM,YY June 0645 France Total Reserve Assets June ($1 = 7,1645 Chinese Yuan) (Reporting and Editing by Sumana Niandy; Reporting by Hongmei LI)
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OPEC+ pumps more oil but is it necessary and at what cost? Russell
After OPEC+'s decision to increase crude oil production, two questions arise: Who will buy the extra crude and will they export the barrels that they claim to be producing? OPEC+ decided at a weekend gathering to increase production by 548,000 barrels a day (bpd). This is up from the 411,000 bpd that the group approved for May June and July and 138,000 bpd in April. Eight members of the group will boost production - Saudi Arabia (as well as Russia, Kuwait, Oman and Iraq), the United Arab Emirates (UAE), Kazakhstan, Algeria, Kuwait, Oman and Russia. The eight countries will have unwound the voluntary 2.2m bpd that they had imposed in an effort to support crude oil prices last year. OPEC+ cited "steady global economy outlook and current healthy fundamentals of the market" in its statement announcing increased August production, continuing a theme that it has been promoting in recent communiques: the oil market was in good shape. The reality is not as rosy, however, as OPEC+ portrays it, as the demand for oil in the major consumer countries like China, which is the top importer of the world, has been tepid. China's crude oil imports rose by just 0.3% or 28,500 barrels per day in the first five month of this year. The official data shows that the total was 11.1 million barrels per day. The growth rate is expected to increase when the June data are released next week. LSEG Oil Research expects imports to be 11,96 million bpd, up from customs numbers of 11,30 million bpd in June 2024. China's imports were likely strong in June. However, the reasons for this are not so positive. The reason why refiners bought more crude than intended is because the prices were lower when June's cargoes arrived. Brent futures, a global benchmark, hit a four year low of $58.50 per barrel on 5 May. They had been trending downwards since early April when cargoes due to arrive in June would have been purchased. In June, oil imports from Asia, which accounts for 60% of all seaborne crudes, increased. LSEG estimates arrivals at 28,65 million bpd - the highest since January 2023. The increased imports in June boosted Asia's arrivals to 27,36 million bpd during the first half 2025, an increase of 620,000 bpd compared with the same period the previous year. In a coincidence, this forecast is in line with the Organization of the Petroleum Exporting Countries' (OPEC) June monthly report which forecasts a demand growth of 630,000 bpd in Asia outside the OECD by 2025. Prices are key The question is if imports will increase in Asia in the second half or if momentum from June will fade. History shows that importers like China and India will tend to reduce imports when prices increase and use up their stockpiles. China's imports will likely be reduced in August or September due to the brief price spike in mid-June, triggered by Israel's attack on Iran. The United States joined Israel in this action. Lower oil prices will encourage buyers to buy and build up inventory to increase imports in the fourth quarter. The ball in this case is largely on OPEC+. Prices will likely continue to fall if the group produces what its quotas permit and exports it. According to a July 4 survey, the actual production has so far lagged behind the higher quotas. The five OPEC members in OPEC+ increased output by 267,000 bpd, which was short of the allowed 313,000 bpd. Saudi Arabia's actions will be crucial, as it is OPEC+’s largest exporter and has the capacity to increase output. You like this column? Check out Open Interest, your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of a columnist, who is also an author.
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Brickworks and Soul Pattinson of Australia secure funding for the $9.15 billion Topco Merger
Washington H. Soul Pattinson, an Australian investment company, and Brickworks, a building materials group from Australia said they had secured funding to merge their companies into a $9.15-billion ASX listed entity named Topco. The company has secured additional funding of A$220,000,000 ($143.81 millions) at the same price as Soul Pattinson’s last closing price, A$42.61. The proceeds from the sale will be used to pay off Brickworks' outstanding debts and other liabilities. Topco's debut is expected to be marked by a market cap of approximately A$14 billion (9.15 billion), supported by A$13.1 in diverse assets, including private equity, property and credit holdings. Brickworks shareholders will receive 0.82 Topco shares at a value implied of A$30.28 per share, which values the building products manufacturer at A$4.62billion. Mark Ellenor, CEO of Brickworks, said: "With equity in place, the combined company is ready to reap the benefits from the merger. We have a streamlined balance sheet, and a clear growth agenda." Topco, in conjunction with the capital raising announced in June and in July, has received commitments to buy 34 million shares. This will generate approximately A$1.4 billion. In a statement released on Monday, Topco and the other companies confirmed that the merger was now fully funded. No further shares were required. Corporate governance experts in Australia have long criticised the complex ownership structure of both companies, which has existed for more than 60 years. Brickworks' outstanding loan debt was A$721m at the end of the half-year period ending January 31. As of 0108 GMT shares in Soul Pattinson rose 0.6% while Brickworks remained largely flat. The benchmark index fell by a small 0.1%.
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South32, Australia's South32, will pay $130 million for the sale of Colombian nickel assets
South32, an Australian diversified mining company, announced on Monday that it would incur a $130 million impairment charge related to the sale to CoreX Holding B.V. of its Cerro Matoso Ferronickel operations located in northern Colombia. South32 anticipates receiving up to $100,000,000 in cash from CoreX. CoreX is a diversified industrial company with operations spanning the metals and mining sector, green energy and other sectors. In January 2024 the miner began a strategic review at Cerro Matoso, citing an important decline in nickel prices. Nickel producers are struggling with a price collapse fueled by a surge in production from Indonesia. This has forced some operators to cut spending, write off investments, and stop their mining operations. South32's Nickel production decreased by 6 percent in the nine months ended March 2025, due to lower nickel grades. They also cited structural changes on the nickel market as continuing to put pressure on nickel prices. BHP Group, world's biggest listed miner, announced in July 2024 it would cease its Western Australia nickel operations in October. It cited a drop in prices and an oversupply of metal in the global market.
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Oil falls as OPEC+ increases August output more than anticipated
The oil price dropped more than 1% Monday, after OPEC+ surprised the markets by increasing output more than anticipated in August. This raised concerns about an oversupply. Brent crude futures dropped 80 cents or 1.2% to $67.50 per barrel at 0010 GMT. U.S. West Texas Intermediate Crude was $65.68, which is down $1.32 or 2%. The Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed to increase production in August by 548,000 barrels a day. Tim Evans, of Evans Energy, said in a report that "the increased production clearly represents an aggressive competition for market shares and some tolerance for a resulting decrease in price and revenue." The August increase is a big jump from the monthly increases that OPEC+ approved in May, June, and July. And 138,000 bpd for April. OPEC+ cited a stable global economic outlook, healthy market fundamentals and low oil inventories as reasons to release more oil. In a note, RBC Capital's analysts led by Helima Crockt stated that the decision would bring back nearly 80% (2.2 million bpd) of the voluntary cuts made by eight OPEC producers. The actual increase in production has been less than expected so far, and the majority of the supply comes from Saudi Arabia. Saudi Arabia raised its August price of its flagship Arab Light crude on Sunday to a record high for Asia. Goldman analysts anticipate OPEC+ will announce a final increase of 550,000 bpd for September during the next meeting, on August 3. Separately Donald Trump, President of the United States, said that the United States was close to concluding several trade agreements and would notify other countries by July 9 about higher tariff rates. The higher rates are scheduled to go into effect on August 1, 2018. Florence Tan, Lisa Shumaker, and Christopher Cushing edited the report.
Worsening United States debt outlook seen more in gold and bitcoin than in bonds
Issue about the quickly increasing U.S. federal government financial obligation is partially behind recent surges in gold rates and bitcoin, even as the Treasury market up until now remains fairly sanguine about the nation's fiscal path, market observers state.
The U.S. budget deficit broadened to $1.7 trillion in fiscal year 2023 and is on track to reach $2.6 trillion by 2034, according to the Congressional Budget Office. U.S. federal government financial obligation held by the public, on the other hand, is on speed to reach a record 106% of gross domestic product (GDP) in 2028, up from 97% in fiscal year 2023. It has soared to $27 trillion from $17. trillion in early 2020 and $5 trillion in 2007.
The unchecked development of U.S. federal government debt is getting more. attention as rates of interest payments likewise take a bigger bite of. the government's spending plan - in some months exceeding costs on. national defense.
This aggravating trajectory has actually enhanced need for bitcoin and. gold, which are frequently utilized as a hedge against inflation and the. depreciating buying power of the U.S. currency.
Issues about the U.S. financial obligation cycle, decline of cash -. and fiat money in specific - does drive the story and the. narrative, stated Brad Bechtel, worldwide head of FX at Jefferies.
That at the margin pushes financiers to allocate more. towards something like (bitcoin) than they otherwise would, and. for gold it's even larger there, Bechtel stated. Issues about. debasing of fiat money is usually one of the motorists of the. gold bugs.
Yields in Treasury financial obligation mainly reflect expectations of. Federal Reserve interest rate policy. Sometimes they are swayed. by boosts in financial obligation supply, though the longer-term fiscal. trajectory is less of a consider the marketplace.
The U.S. reserve bank has periodically purchased. Treasuries in an effort to promote growth, which can pull. yields lower and increase the supply of dollars.
Supply disturbances, record government costs and ultra. loose financial policy as companies were closed down for Covid in. 2020 resulted in skyrocketing rates pressures that have still not. totally abated.
There's interest in both gold and bitcoin because of. that, because inflation's been unsteady in the last number of. years, said Lawrence H. White, teacher of economics at George. Mason Univer. sity.
More worrying is that the increasing financial obligation and deficit remains in. peace time with an economy that's running at complete work ... that's normally when you ought to be running surpluses and we're. not even close, White stated. So, in the next economic crisis we're. going to have an even bigger dive up in financial obligation.
Definitely there are other significant factors driving the interest. in bitcoin and gold.
Bitcoin has actually been buoyed by brand-new exchange-traded funds (ETFs). that invest in the cryptocurrency, attracting more investors. It. is likewise approaching a halving, when the rewards from mining. bitcoin are cut by 50%.
That has actually traditionally been bullish for bitcoin, said. Bechtel. Bitcoin reached a record $73,803 in March.
The gold surge is likewise being driven by expectations of. central bank rate cuts and purchases by foreign central banks. diversifying their reserves. This is partly due to inflation. issues, and also a way to secure against possible U.S. sanctions in a geopolitical disagreement.
Gold hit a record $2,431 per ounce recently.
However the rapidly getting worse U.S. fiscal circumstance remains a. essential motorist for some financiers.
Michael Hartnett, financial investment strategist at Bank of America,. stated in a recent report that current highs in gold and tech. stocks are suggesting that the parlous state of US govt. financial resources will inevitably lead to policies including yield curve. control to avoid (a) financial obligation crisis.
In yield curve manage a central bank buys bonds in order to. maintain a target rates of interest, which can lower federal government. borrowing expenses.
Up until now, nevertheless, several Treasury market signs show. that bonds are not pricing in an aggravating fiscal outlook, stated. Nicholas Colas, co-founder of DataTrek Research study.
These include 10-year Treasury yields trading well below. those on three-month notes. Genuine 10-year yields, which show. all dangers besides future inflation, are likewise around the very same. level as from 2003-- 2007, when the financial obligation to GDP ratio was half of. what it is now.
Treasury financiers still see the dollar as the reserve. currency, they still see Treasuries as reasonably safe and. there's enough Treasuries out there to put cash to work, Colas. stated. If you're searching for threat totally free possessions in size the. Treasury market's still the place to go.
(source: Reuters)