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ANZ increases gold price forecast by ANZ to $3,800 due to solid demand
ANZ Group, an Australian bank, raised its gold price forecast for the year to $3,800 on Wednesday. It expects that prices will peak at $4,000 per ounce by June next year, due to strong demand from investors. Gold prices reached a record high of $3,673.95 Tuesday. They have gained 38% this year due to a weak dollar, central bank purchases, dovish monetary policies and increased global uncertainty. ANZ analysts stated in a report that "prospects of continued accommodative monetary policies, increasing geopolitical challenges, ongoing macroeconomic issues, and concerns about the Fed's independent will strengthen the investment case" for gold. The central bank's gold purchases in 2025 are expected to be between 900 and 950 tons, which translates to 485 to 500 tons of purchases in the second half of the calendar year. China's central banks added gold to their reserves in August. This is the 10th consecutive month that they have purchased bullion. The U.S. Fed will probably maintain its current easing policy until March 2026, due to rising risks on the labour market. This will put downward pressure on U.S. Treasury rates, which usually increases the appeal of Gold," ANZ stated. The Australian lender raised its silver price target for the year to $44.7 an ounce. It cited support from the gold bull run, and strong ETF inflows. On Monday, spot silver rates reached a record high of $41.65/oz.
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The energy transition in Asia is threatened by coal subsidies and policy instability
Industry executives warned on Wednesday that Asia's clean-energy push would stall unless the governments cut fossil fuel subsidies and offered a stable policy direction. They also said they needed to invest in upgrading grids. Executives cited the cancellation of renewables' auctions and the subsidies given to fossil fuel industries as the main obstacles to growth for green investments, at a time that data centres are driving the growth in energy demand. "Coal is still subsidised, and energy and power in general are used to gain votes." Lawrence Wu, Chief Financial Officer for Asia at Portugal-based renewable energy firm EDP Renewables told the APPEC Conference in Singapore that this was the biggest obstacle. The coal industry in major Asian economies, including Indonesia and India, continues to be rewarded, claiming that it keeps retail electricity tariffs low. They also cite lower emissions per capita to justify their dependence on fossil fuel. Nitin Apte is CEO of General Infrastructure Partners' Vena Group in Singapore. The company has quadrupled the construction of renewable energy project in Asia. We can estimate the risk if we know that a permit will take four years to obtain and we are certain of all the steps. Apte explained that the concern arises when an auction is run and then cancelled, or if the power purchase contract is not bankable. Taiwan has revoked its offshore wind generation licenses following a review in this year. India, on the other hand, has cancelled 11,4 gigawatts of renewable energy tenders over the past two years due to high tariffs. He said that data centres are causing a surge in demand for power across the region. This is not due to renewable energy. "I don't believe they (data centers) really care about the carbon intensity of their data centres." "They just want energy," Apte stated. Malaysia, one the most important data centres markets in Southeast Asia, has increased coal-fired electricity production and imported fuels at record levels to take advantage of low prices. The executives said that delays in obtaining permits and other challenges were increasing financing costs. They also called for a long-term plan and predictable timelines. Wu said EDPR was "doubling down" in Japan and Australia because they had "sustainable" risk that the company is "prepared to accept". The predictability of the project helped to reduce capital and financing costs. (Reporting and editing by SonaliPaul; Sudarshanvaradhan)
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Asia stocks rise, bonds fall when traders look at odds of a bigger Fed cut
Asian stocks followed Wall Street higher Wednesday, and safe-haven bond prices fell. Traders increased their bets on the possibility that a softening U.S. labor market would prompt the Federal Reserve to lower rates by at least one quarter point next Monday. S&P 500 Futures rose 0.3%, while STOXX50 futures in Europe gained 0.2%. The dollar is little changed after two days of crucial U.S. inflation data, which will begin later on Wednesday and continue until the Fed's September 17, decision. After Israel's attack against Hamas leaders in Qatar, crude oil prices continued to rise. Geopolitical concerns remained at the forefront of investors' thoughts after Poland and NATO scrambled their air defences in order to shoot down drones as a result of a Russian air strike on western Ukraine. The Nikkei 225 index in Japan rose 0.8%. South Korea's KOSPI increased by 1.7%. Taiwan's equity benchmark reached a new record high of 1.5%. Hong Kong's Hang Seng rose 1.3% while mainland Chinese blue-chips rose 0.3%. Overnight, S&P 500 and Nasdaq Composite, as well as Dow Jones Industrial Average, each finished the day with new all-time records. The CME Group's FedWatch Tool reveals that traders see a Fed rate cut next Wednesday as an almost certain thing. They even place odds of 8.4% on a half-point increase. Investors were convinced that the Fed could not wait to support the economy any longer after a dismal payroll report last week. The final obstacles to this view will be the readings of consumer and producer inflation on Wednesday and/or Thursday. Kyle Rodda is a senior financial market analyst at Capital.com. He said that an upside inflation surprise would cause the probability of a rate cut to be reduced, not just for September but also for future months. According to current risk appetite, the rapid deterioration of U.S. data on the economy, especially jobs, is the reason that markets are pricing such aggressive easing by the Fed. The markets have taken the court ruling, which temporarily prevented President Donald Trump from removing Federal Reserve governor Lisa Cook. This case is likely to be heard by the Supreme Court. Investors are closely following this unprecedented legal battle, as it could threaten the long-held independence of the central bank. Treasury bonds in the United States fell for a second consecutive day on Wednesday. This pushed yields up. After a nearly 3-basis-point increase on Tuesday, the 10-year Treasury yield increased by 1 basis point, to 4,088%. The equivalent yields on Japanese government bonds rose by 0.5 basis points, to 1.565%. This is a slight decline from the earlier increase after a successful auction of five-year bond. When bond prices drop, yields increase. The U.S. Dollar Index, which measures currency against six rivals retreated slightly to 97.707 and reversed earlier gains. The dollar was unchanged at $1.1715 for the euro and down by 0.07% to 147.31 yen. This Thursday, the European Central Bank will set its policy and it is expected that rates will remain unchanged. Last month, economists were divided on whether the ECB would continue to reduce rates. However, recent data shows that inflation is close to 2% and unemployment has reached a new low. On Friday of next week, the Bank of Japan will announce its latest policy decisions. It is widely expected that they will not raise rates this time. Bloomberg and the BOJ published contradictory reports Tuesday regarding tone. Bloomberg reported that policymakers were looking at a hike in this year, whereas Bloomberg suggested the BOJ could wait a little longer before tightening policy. Investors are also watching politics. They're concentrating on who will succeed Shigeru Shiba as Japan’s next Prime Minister, and the longevity of France's fifth newly appointed prime minister in just two years. Gold prices rose by 0.5%, to $3644 an ounce. This is a drop from the previous day's record high of $3673.95. Brent crude futures increased 1.1%, to $67.13 per barrel. U.S. West Texas Intermediate Crude futures also rose 1.1%, to $63.34. Prices settled at 0.6% higher in the previous session, after Israel claimed it had attacked Hamas leaders in Doha. Qatar's Prime Minister said that this attack threatened to derail talks between Hamas & Israel.
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Aramco, the Saudi oil giant, will sell two-part Islamic bonds
A term sheet obtained by revealed that Saudi Aramco has opened the books for the sale a U.S. Dollar Islamic bond (sukuk) with a maturity of five and ten years. The sukuk is expected to be priced later on Wednesday. Aramco, a company in which Saudi Arabia is the majority shareholder and Aramco planned to raise debt to Leverage your balance sheet Last week, it was reported that oil prices were falling and the sale could generate between $3 billion to $4 billion. The term sheet stated that the initial price target was 105 basis points above U.S. Treasuries for the five-year portion, and 115 for the longer-dated tranche. Aramco’s issue coincides with a surge of bond issuance in the Gulf region, including Saudi Arabia’s $5.5 billion Sukuk. This was driven by strong investor interest and large inflows to bond funds. It will also test the appetite of investors for regional deals, a day after Israel tried to kill Hamas political leaders with an Airstrike on Qatari neighbour The military action of the United States in the Middle East has been intensified. Al Rajhi Capital Company is mandated as the active bookrunner on this transaction. Saudi Aramco has not responded to an immediate request for comment on the transaction. (Reporting and editing by Christopher Cushing, Kim Coghill and Scott Murdoch)
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The specter of stagflation clouds Fed's optimism
Kevin Buckland gives us a look at what the future holds for European and global markets. The market is optimistic about monetary policy. Rising equity prices and falling bond values are a good indicator of this. A rate cut next week at the Fed meeting has a decent chance to be a big one. Wall Street closed with new record highs over night, Taiwan's benchmark has reached a new peak and Japan's Nikkei index is moving back to Tuesday's unprecedented level. The unquestionable weakness of labour market indicates that policy easing will be imminent. The question is, however, how much the Fed's rate cut trajectory is complicated by the still-sticky inflation. Markets will receive two crucial days of data, namely PPI today and CPI the following day. The Fed would be forced to take a risky course of action if inflation levels were high. The market currently has 66 basis point of easing priced for the end of the year, with 7% odds on a 50 basis-point cut coming next Wednesday. The Fed is still the most important story on the global markets, but European investors should keep an eye on the geopolitical situation after NATO member Poland shot down for the first time apparent Russian drones it claimed had infringed on its airspace when it launched an attack against western Ukraine. French politics is also a major topic. The deeply unpopular President Emmanuel Macron has named Sebastien lecornu, a 39-year old loyalist, as his fifth Prime Minister in less than two-years, raising the question of just how long either of them can hold on to power. The outcome of ECB’s two-day summit that begins today is now more certain. Economists are almost unanimous in their expectation for rates to remain unchanged. The ECB's two-day meeting that begins today is more certain, with economists almost unanimously expecting rates to remain steady. The following are key developments that may influence the markets on Wednesday. US PPI (August). -Sweden monthly GDP (July) -Norway, Denmark CPI (both August) Italy, Spain, Greece Industrial Output (all July).
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Asia stocks rise, bonds fall when traders look at odds of a bigger Fed cut
Asian stocks followed Wall Street higher Wednesday, while bonds fell. Traders increased their bets on the possibility that the Federal Reserve would cut rates next week by at least one quarter point due to a softening of U.S. labor market conditions. The dollar is also rising, as the U.S. Inflation figures will be released on two days, beginning later Wednesday. These data are crucial for the Fed to make its September 17th decision. After Israel's attack against Hamas leaders in Qatar, crude oil prices remained high. Geopolitical concerns remained at the forefront of investors' thoughts after Poland and NATO scrambled their air defences in order to shoot down drones as a result of a Russian air strike on western Ukraine. The markets also took in stride the court ruling which temporarily prevented President Donald Trump from removing Federal Reserve governor Lisa Cook. This case is likely to be heard by the U.S. Supreme Court. Investors are closely following the unprecedented court battle, as it could undermine the long-held independence of the central bank. However, there has been no immediate reaction on the market. In Asia, Japan’s Nikkei gained 0.3%, South Korea’s KOSPI rose 1.3%, and Taiwan’s equity benchmark reached a new record high of 1.46%. Hong Kong's Hang Seng rose by 0.5% while mainland Chinese blue-chips rose by 0.2%. Overnight, S&P 500 and Nasdaq Composite, as well as Dow Jones Industrial Average, each finished the day with new all-time records. S&P futures were 0.2% higher Wednesday. The CME Group's FedWatch Tool shows that traders see a Fed rate cut next Wednesday as an almost certain thing. They even place 7% odds on such a large half-point drop, according to the tool. Investors were convinced that the Fed could not wait to support the economy any longer after a dismal payroll number was released last week. The final obstacles to this view will be the readings of consumer and producer inflation on Wednesday and/or Thursday. Kyle Rodda is a senior financial market analyst at Capital.com. He said that an upside inflation surprise would cause the probability of rate cuts to be reduced, not just for September but also for future months. According to current risk appetite, the rapid deterioration of U.S. data on the economy, especially jobs, is the reason that markets are pricing such aggressive easing by the Fed. Treasury bonds, a safe-haven investment that has been around for centuries, fell for a second consecutive day on Wednesday. This pushed yields up. After a nearly 3-basis-point increase on Tuesday, the 10-year Treasury yield increased by almost 2 basis points. The equivalent yield on Japanese government bonds rose by 1.5 basis points, to 1.575%. In the last session, the U.S. Dollar held onto gains made on Tuesday. The dollar index (which measures the currency against its six main rivals) was unchanged at 97.78 after beginning Wednesday with a slight increase. The dollar was unchanged at $1.1705 to the euro, and down by 0.06% on 147.33 yen. This Thursday, the European Central Bank will set its policy and it is expected that rates will remain unchanged. A month ago economists were divided on whether the ECB would continue to reduce rates. However, recent data shows that inflation is close to the 2% goal and unemployment has reached a new low. On Friday of next week, the Bank of Japan will announce its latest policy decisions. It is widely expected that they will not raise rates this time. Bloomberg and the BOJ issued contradictory reports Tuesday regarding tone. Bloomberg reported that policymakers were looking at a hike in this year, while Bloomberg said they may delay tightening policy. Investors are also watching politics. They're focusing on Shigeru-Ishiba's successor as Japan's new prime minister and the ability of France's fifth newly appointed prime minister in just two years to stay on. The price of gold edged up by 0.2%, to $3,633 an ounce. This comes after the previous day's record jump to $3,673.95. Brent crude futures increased 0.5%, reaching $66.74 per barrel. U.S. West Texas Intermediate Crude futures climbed 0.6% to $62.99 per barrel. Prices settled at 0.6% higher in the previous session, after Israel claimed it had attacked Hamas leaders in Doha. Qatar's Prime Minister said that this attack threatened to derail talks between Hamas & Israel.
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Five-Well Drilling Campaign on BP’s Agenda for Mediterranean Sea
BP has signed a memorandum of understanding (MoU) with the Egyptian government to evaluate opportunities for a five-well drilling program in the Mediterranean Sea.The program, at water depth ranging from 300 to 1,500 meters, is designed to accelerate the development and production of national gas reserves, with the intent of extending the use of existing production facilities in the West Nile Delta.Drilling operations are expected to start in 2026, with possible tie-back options following evaluation of the drilling campaign and resource potential.The agreement comes as BP plans to increase production to 2.3-2.5 million barrels of oil equivalent a day in 2030 with the capacity to increase production out to 2035. It follows a successful exploration campaign in the first half of 2025 in which bp has made 10 discoveries including two in Egypt, where it completed drilling activity at the Fayoum-5 gas discovery well and El King-2 exploration well, both part of the West Nile Delta development.“Today’s announcement reaffirms our commitment to supporting investment in Egypt’s gas sector. We appreciate the continued engagement and support from H.E. Minister Karim Badawi. “We look forward to applying BP’s technological expertise to build on our recent exploration and development momentum to bring on new gas resources and accelerated production for the country as well as deliver value for our business,” said William Lin, executive vice president for gas and low carbon energy.“We are proud of our longstanding partnership with the Egyptian government. This memorandum represents a strategic step in our investments in Egypt’s energy sector during this decade, enabling us to develop additional gas resources in the West Nile Delta and bring them onstream as quickly as possible to meet the needs of the local market,” added Nader Zaki, regional president for the Middle East and North Africa.
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Asia stocks rise, bonds fall when traders assess the odds of a bigger Fed cut
Asian stocks followed Wall Street higher Wednesday, while bonds fell. Traders increased their bets on the possibility that the Federal Reserve would cut rates next week by at least one quarter point due to a softening of U.S. labor market conditions. The dollar is also rising, as the U.S. Inflation figures will be released on two days, beginning later Wednesday. These are the last data that will inform the Fed’s decision of September 17. Crude oil prices remained high after Israel's attacks on Hamas leaders in Qatar. The Nikkei 225 index in Japan rose 0.3%. South Korea's KOSPI increased by 1.3%. Taiwan's equity benchmark also increased by 1%. Hong Kong's Hang Seng rose by 0.5% while mainland Chinese blue-chips rose by 0.2%. Overnight, S&P 500 and Nasdaq Composite, as well as Dow Jones Industrial Average, each finished the day with new all-time records. S&P futures were 0.2% higher Wednesday. The CME Group's FedWatch Tool shows that traders see a Fed rate cut next Wednesday as an almost certain thing. They even place 7% odds on such a large half-point drop, according to the tool. Investors were convinced that the Fed could not wait to support the economy any longer after a dismal payroll number was released last week. The final obstacles to this view will be the readings of consumer and producer inflation on Wednesday and/or Thursday. Kyle Rodda is a senior financial market analyst at Capital.com. He said that an upside inflation surprise would cause the probability of a rate cut to be reduced, not just for September but also for future months. According to current risk appetite, the rapid deterioration of U.S. data on the economy, especially jobs, is the reason that markets are pricing such aggressive easing by the Fed. Treasury bonds, a safe-haven investment that has been around for centuries, fell for a second consecutive day on Wednesday. This pushed yields up. After a nearly 3-basis-point increase on Tuesday, the 10-year Treasury yield increased by almost 2 basis points. The equivalent yield on Japanese government bonds rose by 1.5 basis points, to 1.575%. In the last session, the U.S. Dollar held onto gains made on Tuesday. The dollar index (which measures the currency versus six rivals) was flat at 97.78 after beginning Wednesday with a slight increase. The dollar was unchanged at $1.1705 to the euro, and 0.06% lower at 147.33yen. This Thursday, the European Central Bank will set its policy and it is expected that rates will remain unchanged. One month ago, economists were divided on whether the ECB would continue to reduce rates. However, recent data shows that inflation is holding near the 2% target, and unemployment has reached a new low. On Friday of next week, the Bank of Japan will announce its latest policy decisions. It is widely expected that they will not raise rates this time. Bloomberg and the BOJ issued contradictory reports Tuesday regarding tone. Bloomberg reported that policymakers were looking at a hike in this year, while Bloomberg said they may delay tightening policy. Investors are also watching politics. They're focusing on Shigeru-Ishiba's successor as Japan's new prime minister and the ability of France's fifth newly appointed prime minister in just two years to stay on. The price of gold edged up by 0.2%, to $3,633 an ounce. This comes after the previous day's record jump to $3,673.95. Brent crude futures increased 0.5%, reaching $66.74 per barrel. U.S. West Texas Intermediate Crude futures increased 0.6% to $62.99 per barrel. Prices settled at 0.6% higher in the previous session, after Israel claimed it had attacked Hamas leaders in Doha. Qatar's Prime Minister said that this attack threatened to derail talks between Hamas & Israel.
US inflation data and gold rates are in focus
Investors were watching for key inflation reports this week, as well as expectations of an interest rate reduction in the United States this month.
As of 0101 GMT spot gold was up 0.3%, at $3,635.329 an ounce. It had hit a record-high of $3,673.95 per ounce on Tuesday.
U.S. Gold Futures for December Delivery eased by 0.2% to $3673.70.
"Sentiment has been very bullish." Gold prices are being driven by several factors. "The primary factor is U.S. interest rate expectations," Capital.com's financial market analyst Kyle Rodda stated.
The near-term outlook is heavily dependent on these inflation data. If the data is a little spicy, rate cuts may be triggered marginally. This could spark a correction in a market that's technically overbought.
Watch closely the U.S. producer prices inflation data due at 1230 GMT and the consumer price reading on Thursday for further clues about the Federal Reserve's rate path.
The U.S. government reported on Tuesday that the economy probably created 911,000 less jobs than originally estimated in the 12-month period through March. This suggests that the job growth had already slowed before President Donald Trump imposed aggressive import tariffs.
The U.S. Nonfarm Payroll Data released last week indicated a weakening of labor market conditions and sealed the case to cut rates at the Fed’s September Policy Meeting.
According to CME Group’s FedWatch Tool, markets are pricing in a rate cut of 25 basis points, with a probability of a 50-basis point cut at 6%.
Gold prices are up 38% this year after a 27% increase in 2024. This is due to a soft dollar, central bank accumulations, dovish monetary policies and increased global uncertainty.
Gold that does not yield is usually a good investment in an environment with low interest rates.
Silver spot rose by 0.3%, to $41 an ounce. Palladium remained flat at $1148.57 while platinum gained 0.9%. (Reporting and editing by Sherry Jac-Phillips in Bengaluru, Eileen Soreng and Brijesh Patel from Bengaluru)
(source: Reuters)