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Gold prices rise as dollar weakens and Trump's Powell criticism fuels uncertainty
Gold prices rose on Thursday due to a weaker US dollar and growing unrest after news reports claimed that Donald Trump, the U.S. president, had considered replacing Federal Reserve chair Jerome Powell in September or October. The reports raised concern over the future independence and stability of the U.S. Central Bank, which boosted demand for bullion as a safe haven. As of 0242 GMT, spot gold was up by 0.2%, at $3,339.20 an ounce. U.S. Gold Futures increased 0.3% to $3353.10. Gold priced in greenbacks is now less expensive for buyers overseas. Powell said to a U.S. Senate committee on Wednesday that, while Trump's tariffs might cause a temporary price increase, the risk of persistent inflation is enough to make the central bank cautious about any further rate reductions. Tim Waterer, Chief Market Analyst at KCM Trade, said that Trump clearly wants to have a more dovish Fed chairman the next time around. The increased probability of a rate-cutting aggressive cycle is therefore weighing down the USD. Bullion is more likely to perform well in periods of uncertainty or when interest rates are low. On Wednesday, Trump referred to Powell as "terrible", and said that he was considering three or four candidates to fill the top Fed position. The Wall Street Journal also reported that Trump had even considered announcing Powell as Powell's successor in September or October. The markets are awaiting the U.S. GDP report due later today, as well as data on Personal Consumption Expenditures on Friday. Waterer stated that "Gold is basically treading on water until we get a reading on the next batch U.S. macrodata including GDP and PCE core". On Wednesday, the ceasefire between Israel, Iran and Syria appeared to hold. Trump, speaking at the NATO summit, applauded the quick end of the 12-day conflict. He also said that he will seek an Iranian commitment to stop its nuclear ambitions during next week's talks. Silver spot rose 0.2% to $36.36 an ounce. Platinum climbed 2.3% to $1.385.38, and palladium soared 5.5% at $1,115.58.
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Vietnam claims its refineries are not affected by Middle East tensions
The Ministry of Industry and Trade announced on Thursday that the Middle East tensions are not affecting the refineries in Vietnam at this time. The Ministry of Foreign Affairs announced that Vietnam will import 5.1 millions tons of refined petroleum in the second half this year. This is an increase of 6.2% over the first half. Binh Son Refining and Petrochemical, which operated at 114.4% capacity during the first half of 2014, mainly uses crude oil from Africa and domestic sources. The 130,000-barrel-per-day refinery is expected to operate at 14% to 15% above designed capacity for the rest of the year, and imports, which account for 30%-35% of its crude oil input, and are sourced from Libya and West Africa, the ministry said. The statement quoted the CEO of Nghi Son Refining & Petrochemical saying its 200,000-barrel-per-day refinery had sufficient crude oil supplies and was operating normally. According to the ministry, two refineries will produce 7.7 millions tons of crude oil during the second half 2025. This is a slight decrease from the 7.8 million tonnes produced in the first half. (Reporting and editing by John Mair; Khanh Vu)
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Shanghai copper reaches two-week highs as dollar falls
The Shanghai copper price reached its highest level in two weeks on Thursday, as the dollar fell to its lowest point in over three years. This lifted market sentiment. As of 0132 GMT, the most traded copper contract on Shanghai Futures Exchange increased 0.3% to 78.820 yuan (10,995.79) per ton. This is its highest level since June 11. The price of three-month copper at the London Metal Exchange increased by 0.3%, to $9.737 per ton. The dollar dropped 0.1%, to its lowest level since March 2022. Concerns about the future independence and soundness of the U.S. Federal Reserve's monetary policies undermined confidence in the currency. A weaker dollar makes greenback-denominated assets more affordable to holders of other currencies. The premiums for the London Metal Exchange's (LME) nearby copper contracts have fallen from their multi-year highs, on expectations that deliveries into LME-registered storage facilities in the next few weeks will ease the tightness. Goldman Sachs, however, expects the copper price to increase in the second half 2025, to an average $9,890 a metric ton. The bank cited fears of a global shortage of supply due to U.S. Tariffs and increased Chinese activity. Trump, on the geopolitical side of things, said that he will likely ask Iran for a commitment to stop its nuclear ambitions during talks next week. He also credited U.S. attacks on Iran with ending the war between Israel & Tehran quickly. LME aluminium rose 0.2%, to $2.567.5 per ton. SHFE aluminium rose 0.4%, to 20,385 Yuan. LME Zinc gained 0.3%, to $2.711.5. Lead grew by 0.4%, to $2.040. Nickel advanced 0.4%, to $15.130. The SHFE led rose 0.6%, to 17,200 Yuan. Nickel rose 1.4%, to 119.530 Yuan. Tin rose 1.7%, to 266,700 Yuan. Zinc moved up 0.6%, to 22,100 Yuan. ($1 = 7.1682 Chinese yuan) (Reporting by Anushree Mukherjee in Bengaluru; Editing by Sumana Nandy)
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Demand for crude oil is strong as the drawdown of US crude stocks signals a rise in prices
Oil prices edged higher on Thursday, continuing gains made the day before. A larger-than expected drawdown in U.S. crude inventories signaled a strong demand for oil, but investors were cautious over the Iran-Israel truce and the stability of the Middle East. Brent crude futures were up 12 cents or 0.2% to $67.80 per barrel at 0030 GMT. U.S. West Texas Intermediate crude (WTI), which is a blend of U.S. West Texas Intermediate and Brent crude, gained 20 cents or 0.3% to $65.12. The benchmarks both rose by nearly 1% Wednesday after recovering from losses in the first part of the week. This was due to data showing a resilient U.S. market. Yuki Takashima is an economist at Nomura Securities. He said that some buyers favor the solid demand shown by the falling inventory in U.S. Weekly statistics. He said that investors are still nervous and want to know the status of the ceasefire between Iran and Israel. The market's attention has now shifted to the OPEC+ levels. Takashima predicted WTI would return to its pre-conflict range of $60-$65. Energy Information Administration (EIA), on Wednesday, reported that U.S. crude and fuel inventories decreased last week due to increased refining and demand. The EIA reported that crude inventories dropped by 5.8 millions barrels during the week ended June 20. This was more than analysts expected in a poll, which predicted a draw of 797,000 barrels. The gasoline stocks fell unexpectedly by 2.1m barrels, as compared to forecasts of a 381,000-barrel increase. This was despite the fact that gasoline supply, which is a proxy for consumer demand, reached its highest level since December 2021. Igor Sechin said on Saturday that OPEC+ - which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia - could accelerate the production increases by a year. In the meantime, U.S. president Donald Trump has hailed a swift end to the war between Iran and Israel. He said Washington will likely ask Tehran to commit to ending its nuclear ambitions during talks with Iranian officials in Tehran next week. Trump said that on Wednesday the U.S. had not ceased its maximum pressure against Iran, including restrictions on the sale of Iranian oil. However, he indicated a possible easing in enforcement for the sake of the rebuilding process. (Reporting and editing by SonaliPaul; Yuka Obayashi)
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US foreign investment slump: anomaly or warning? McGeever
The 'dedollarization' debate focuses a lot on foreign exposures to U.S. stocks and bonds. Investors shouldn't ignore the foreign direct investment flows. This is the traditional sticky capital which may be sending out warning signs. Foreign direct investment (FDI), is when an overseas entity purchases the assets or increases its holdings of a foreign company. This can be done by purchasing machinery, plants, or a controlling interest. FDI, therefore, is a more stable investment than portfolio flows. Donald Trump, the U.S. president, says that he has brought record-breaking foreign investment to his country. The White House website has a "non comprehensive running list" of new U.S. investments since Trump began his second term. The total running is in the trillions and includes pledges made by several foreign countries. The United Arab Emirates (UAE), Qatar, Japan, and Saudi Arabia have all pledged more than $4 trillion of investments in the United States. Trump said during his trip to the Middle East in the last month that the U.S. was on track to receive $12-13 trillion in investments from around the world. This includes "projects mainly announced... and some which will be announced very soon." In time, these flows will be revealed in their entirety. Official figures released on Tuesday revealed that FDI fell to $52.8 Billion in the first three months, the lowest level since the fourth quarter 2022. This is well below the average quarterly figures of the last 10 and 20 year. Commerce Department figures showed that U.S. current-account deficit widened in the third quarter to a record $450,2 billion, or 6%, of U.S. Gross Domestic Product. FDI inflows only covered 10% of this shortfall. Should the Trump Administration be concerned? Tariff Distortions The short answer to this question is most likely not, or at least not just yet. FDI flows tend to be smaller than portfolio investments in equity and fixed-income securities. Therefore, from the perspective of funding a current account deficit, FDI declines are not a major concern. If foreign investors also buy fewer U.S. Securities, then capital will need to be raised from somewhere else to cover the deficit. Additionally, the balance of payments in America in the first quarter were distorted because domestic consumers and business leaders rushed to import goods before Trump's tariffs kicked in later in the year. Trump is betting that the deficit will shrink in this year and beyond, as his "America First" policies encourage more "onshoring", as domestic firms bring production home. The weaker dollar also helps U.S. Manufacturing by making exports competitive. The boom that follows will bring in investment from both companies and governments abroad. Theoretically. These dynamics are not only one-sided. Citi estimates that the European Union will account for 45% in 2023 of all U.S. FDI. Combining the European continent's German fiscal splurge with U.S. Tariffs and concerns about 'dedollarization' could easily reduce that flow. Section 899, a possible tax of 20% or more on foreigners' U.S. earnings that could be included in Trump's budget plan, is another potential risk for U.S. bound FDI. Tax Foundation reported in May that Section 899 "would hit inbound investment that makes up more than 80% of U.S. FDI inbound stock." Section 899 may be diluted by industry pushback, but it still remains a cloud over U.S. investments. Citi reports that the U.S. will be the largest recipient of FDI in the world by 2023. This is up from 15% just before the pandemic. Its economy is one of the biggest in the world. It's a hub for innovation, cutting-edge technology, artificial intelligence, and money making potential. This will always attract FDI. It remains to be determined whether it will attract as much FDI in the new environment. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X.
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Brazil's Lower House approves an extra pre-salt auction to increase revenue
The lower house of Congress in Brazil approved on Wednesday an executive order that allows the government to sell its share of offshore oil pre-salt fields, which are not under contract. This could boost revenues as Brazil struggles to balance its fiscal budget. Jose Priante, a lawmaker from the Philippines, incorporated its content into an executive order on how oil and gas revenue can be used for certain programs. The executive order amended, which is now going to be approved by the Senate, will expand the use of these resources. In April, it was reported that the government planned to hold an additional oil auction to increase revenue. The goal is to raise 20 billion reais (3.60 billion dollars) by selling small parts of the Tupi Mero and Atapu Pre-salt Fields. The oil reserves in these blocks are not covered by the previous sales. These remaining areas, also known as non-contracted zones, already produce oil in accordance with existing agreements. These surplus zones are now being put up for auction. Hugo Motta, Speaker of the Lower House, confirmed via social media that this measure could generate up to 20 billion reais. According to a person with knowledge of the situation, the approval for the executive order eliminates the need for the separate bill that the government submitted for authorization of the auction. The sale will only be able to proceed once the National Energy Policy Council has published a resolution, and after the auction notice has been released. According to a second government source, the auction will set minimum prices in each area. The highest bidder will secure extraction rights. Source: "Whoever wins gets all the oil from that area," source says. The approval of the executive order came after a major setback that the government suffered earlier in the day. Congress reversed A presidential decree had increased the Financial Transaction Tax (IOF) for certain operations. ($1 = 5,5577 reais). (Reporting and editing by Kyry Madry; Marcela Ayres)
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Tropical depression strikes southern China two months after Typhoon Wutip
The National Meteorological Centre of China reported that a tropical depression hit the island province Hainan in China early Thursday morning, bringing additional rain to an area still recovering from Typhoon Wutip, which struck two weeks earlier. State broadcaster CCTV reported that the tropical depression will move from Wenchang to the northeast tip of the island, then head back out into South China Sea, making a second landing in China's south Guangdong Province. It is expected to gradually weaken along the way. Meteorologists have linked extreme storms and flooding to climate change. This poses a major challenge to Chinese officials as it threatens to overwhelm the ageing flood defences. It could also cause millions of people to be displaced and billions of dollars of economic losses. The flood defences in the densely-populated Guangdong Province, as well as Guangxi, and Hunan farther inland will be tested by the storm. Wutip, which ravaged the region between June 13 and 15, dropped record rainfall and damaged roads and crops. (Reporting and editing by Jamie Freed; Reporting by Joe Cash)
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Troops kill three Palestinians in Israeli raid on West Bank town
Israeli authorities and the Israeli army said that dozens of Israeli settlers attacked an unnamed Palestinian West Bank settlement on Wednesday. The attack sparked a confrontation which ended in three Palestinians being killed by Israeli forces. The Palestinian Health Ministry reported that three Palestinians died and seven were injured in violence at Kafr Mahlik, northeast Ramallah. A military statement from Israel said that dozens of Israelis had set fire to their property. Military and police forces were sent to the scene following a report about violence, which included an exchange of stones. In a military statement, it was stated that several Palestinians fired and hurled stones at the forces who responded with fire. Five Israeli suspects have been arrested. A lightly wounded Israeli army officer. At least two cars were seen on video footage being set ablaze. The video could not be independently verified. Hussein al Sheikh, the Palestinian deputy president Mahmoud Abubas, wrote on X that "the government of Israel is driving the region into explosion with its behavior and decisions." He said: "We urge the international community intervene urgently in order to protect our Palestinians." The Palestinian Red Crescent reported that earlier on Wednesday, an Israeli soldier shot and killed a Palestinian child during a raid in Al-Yamun, which is a West Bank settlement west of Jenin. (Reporting and editing by Daniel Wallis; Ali Sawafta, Howard Goller)
Goldman increases copper price forecast for 2H25 on the basis of tariff-driven supply risk and China demand
Goldman Sachs predicts that copper prices will rise to $9,890 on average per metric ton in the second half 2025, according to a bank note. The bank cited fears of a global shortage of supply due to U.S. Tariffs and increased Chinese activity.
The world's biggest economy has imported copper in excess, approximately 400,000 kilotonnes this year.
The bank reports that, while the global market has a surplus at the moment, the excess imports are causing concern about a possible shortage of copper in countries outside the U.S.
Goldman expects that the Trump administration will impose a 25 percent tariff on imports of copper once an investigation is completed into foreign copper.
Late in February, U.S. president Donald Trump ordered an investigation into possible tariffs on imports of copper to rebuild the domestic production of this critical metal. Copper is used for electric vehicles and semiconductors as well as military hardware, consumer goods, and other products.
The bank stated that "copper markets are priced under 60% of the probability of a 25 percent import tariff by May."
Goldman predicts that copper prices will reach a peak of $10,050 by August, as the threat of tariffs erodes inventories outside the United States, and Chinese demand is resilient. Prices will then be expected to drop to $9,700 in December as the tariff threat erodes ex-U.S. inventories.
The bank stressed that the market does not currently price a high probability of a 25% tariff. As a result, the bank recommends a trading strategy that takes advantage of the price difference between the U.S. copper and UK markets.
The bank has revised copper prices upwards because China, one of the biggest destinations for the metal, is experiencing "relatively robust activity" at the moment.
Goldman has slightly reduced its forecast for 2026 copper prices to $10,000 per ton, down from the earlier estimate of $10,170. Prices are expected to reach $10350 by December.
The company remains bullish about copper prices for 2027. It expects the average price to be $10,750, despite a growing supply deficit due to strong electrification demands and limited mine supply. (Reporting by Ishaan Arora and Sarah Qureshi in Bengaluru; Editing by Chris Reese and Sandra Maler)
(source: Reuters)