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Gold drops as inflation fears fuel expectations of higher rates
Gold prices fell on Friday and were headed for a loss of a week as inflation concerns reinforced expectations that rates would rise in the future. Oil prices remained near $110 per barrel. At 9:30 am, spot gold was down by 0.7% to $4,588.32 an ounce. ET (1330 GMT), after having fallen as low as $4,559.48 earlier in session. It was on course for a loss of 2.3% per week. U.S. Gold Futures for June Delivery fell by 0.6% to $4600.00. Chris Gaffney is the president of EverBank's world markets. He said: "Precious Metal Traders continue to sell Gold after the Fed signaled that U.S. Interest Rates would remain on Hold for the Near Term Due to Inflation Concerns." He added that this downward trend could continue as long as these concerns remain and oil prices remain high. As fuel prices rise, Brent prices are expected to continue their upward trend. Cost increases could encourage central bankers to keep interest rates high for longer. This would put pressure on non-yielding investments like gold, as investors look to other options such as Treasury yields which offer higher returns. The U.S. Federal Reserve?kept rates unchanged this past week, and took a hawkish stance that caused markets to give up any hope of a rate reduction in the United States this year. The price of gold has fallen significantly since the start the conflict with Iran in late February, despite the fact that the metal is regarded as a hedge for geopolitical uncertainties. IRNA, the state news agency, reported that Iran's latest proposal for negotiations with the United States was sent to Pakistani mediators on Thursday. Silver spot prices increased 1.4%, to $74.78 an ounce. Ole Hansen is the head of commodity strategy for Saxo Bank. He wrote: "Long-term prospects (for'silver') remain supported by a sixth consecutive annual market deficit, declining above-ground inventories, and firm demand from private investors and solar." Palladium was down 0.1% at $1,522.25 and platinum rose 0.3% to $1,991.80. (Reporting by Anjana Anil in Bengaluru; Editing by Nia Williams)
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TMC claims seabed mining application meets US standards, expects regulatory decision in Q1 2027
The Metals Co announced on Friday that U.S. regulators found their consolidated application for deep-seabed mineral exploration and commercial recovery to be "fully compliant" with federal requirements. This is a major step towards approval. The company expects that the regulatory process including the environmental review will be completed by the end of the first quarter 2027. TMC reported that the National Oceanic and Atmospheric Administration (NOAA) determined that the application submitted by the U.S. division met all requirements under the Deep Seabed Hard Mineral Resources Act. The decision comes ?as President Donald Trump's administrationencourages U.S. exploration ?of the deep ?sea by accelerating permits for companies seeking critical minerals in international waters, a move expected to face environmental and legal challenges. Environmental groups have opposed the practice of mining seabeds to obtain metals such as nickel, manganese and copper, which are used in electronic products, weapons, and consumer goods. TMC has applied for approval to?explore and?recover metals from polymetallic nodules that are used in energy, defense, and infrastructure applications. The company announced in January that it was the first deep sea?miner?to seek Washington's approval as part of a simplified permitting process launched earlier this year.
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Policymakers: Fed should abandon rate-cutting lean due to oil price shock
The Federal Reserve officials who disagreed with this week's statement of policy said that the rising oil prices due to the U.S. supported war against Iran mean the U.S. Central bank officials should make it clear that they cannot continue to lean toward interest rate reductions, due to the uncertainty surrounding the future of the economy and inflation. The Fed's most divided vote since 1992 kept the overnight benchmark?interest rates steady at 3.50% to 3.75% but maintained language that indicated its next likely move would be a cut. This is consistent with the process started about 18 months ago, of lowering high borrowing costs used in order to combat inflation and towards a "neutral" position. The Fed's target of 2% is still well above inflation, and it has been increasing. With the risks associated with the outcome the war being so high, policymakers are less confident that rates will fall. Some are worried that they might need to increase. The pressures on inflation are still broad, and the rising oil price is a new source. She said that she no longer considered this easing of bias to be appropriate given the current outlook. Neel Kazhkari, the Minneapolis Fed president, said that a prolonged closing of the Strait of Hormuz or any further damage done to Middle East energy infrastructure would produce a large price shock. The Fed would then need to "potentially" raise rates to keep inflation expectations under control. After the Fed's weekly meeting, the lid was lifted on its policy communications. We would have to respond with a strong response. Federal funds rate hikes, possibly a series, could be justified even at the cost of further "weakness" in the labor market. The policy statement was approved by 8-4 this week. It repeated the existing language in order to show that the easing bias felt by three voting Fed officials is no longer appropriate. Other non-voting policy committee members are likely in agreement. The fourth dissent was 'in favor of a rate reduction. MARKET MEASURES OF FUTURE INCREASEMENT EXPECTATIONS ARE ON THE RISE The closure of the Strait of Hormuz - a vital shipping route for the world's supply of energy - and threats to the infrastructure has pushed the price of oil above $100 a barrel for several weeks. It reached $126 this week, compared with $70 when the conflict began two months ago. According to the AAA group, the average price of gasoline in the United States has risen by almost 10 cents over night to $4.39 per gallon. It was around $3 at late February. Omair Sharif of Inflation Insights said it was "early days" but that the Fed could be surprised to see that the consumer price index for May is above 4%. This would echo the spike in inflation that occurred after the COVID-19 Pandemic, and the Russian invasion of Ukraine 2022. Kevin Warsh could face "not only surging energy prices that threaten to spill over into the wider economy, but also rising inflation expectations numbers," Sharif wrote in a Friday article. Donald Trump said that he expected Warsh to deliver rate cuts in a difficult environment. While Fed officials claim that inflation expectations are stable at the moment, they have seen a sharp rise in expectations of near-term inflation since the start of the war, but their expectations of the rate of inflation over the longer term have increased more modestly. The market-based measures have also begun to increase. The yields of 10-year Treasury Inflation Protected Securities have risen by 25 basis points and are the highest they've been since 2023. The rate on 5-year TIPS also increased by roughly the same amount. The 5-year, 5-year-forward rate, which is a measure for expected inflation in five years' time, and the five years following, has risen by about 20 basis points. Powell said in a press conference after the Fed meeting on Wednesday that inflation dynamics were so fluid, the "center of thinking" among Fed officials was moving away from a statement with an easing bias in favor of a neutral tone, which would open the door for a rate increase. He said this change could happen, depending on the events, at the next policy meeting on June 16-17. Kashkari, in his Friday statement, pointed out another possible issue with the language of "easing". Kashkari's analysis shows that even in a "benign" scenario, where the Strait of Hormuz is opened relatively soon, the underlying inflation rate in the U.S. will remain at 3%. This would be well above the Central Bank's target, and would allow it to stay unchanged for a long period of time.
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Imperial Oil's quarterly profit misses expectations as throughput volume falls
Imperial Oil, a Canadian oil company, missed Friday's analysts' expectations for the?first quarter profit. Weaker crude realizations and unplanned outages at its facilities lowered?refinery?throughput. The geopolitical tensions that have been brewing in the Middle East have tightened the global oil supply. This has led to higher fuel prices. However, the gains are not enough for the weaker realisations and reduced downstream volumes. Imerial Oil refinery's quarterly?throughput dropped to 384,000 barrels a day (bpd), from 397,000 bpd?a year ago, and capacity utilization decreased to 88% from 90%, primarily due to unplanned outages and disruptions to synthetic crude feedstock. Early trading saw shares of the Calgary-based company, which is listed in the U.S., fall 2.7%. The company reported that the average price of synthetic crude oil fell from C$98.79 to C$96.13 a barrel, compared with C$98.79 a barrel a year ago. Western Canada Select remained largely unchanged at $58.33 per barrel. The quarterly upstream production however increased marginally to 419,000 barrels of crude oil equivalents per day (boepd) compared with the 418,000 boepd produced a year ago. The company also stated that the U.S. Trade Measures introduced in 2025 and Canada's retaliatory Tariffs were not expected have a material impact on its financial situation or operations. Imperial 'Oil reported its net income dropped to C$940 ($692.96 millions), or C$1.94 a share, for the quarter ending March?31. This compares with analysts' LSEG data compiled estimates of C$995?or C$2.47 a share.
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RPT-Syria is dependent on Russian oil despite pivoting to the West
Reporting shows that Russia is now the largest oil supplier to Syria despite the alignment of the new government with the West, and despite widespread mistrust of Moscow due to its military support of the fallen leader Bashar Al-Assad. The report found that oil shipments from Russia increased by 75% this year to a total of?60,000 barrels a day. This was based on official announcements, and data from ship tracking sites such as LSEG MarineTraffic, and Shipnext. These volumes are a small part of Russia's daily oil exports. The flows will make Russia the dominant oil supplier in Syria after the fall of Assad, December 2024. This is replacing Iran, which was a major ally of the ousted president during the?14-year civil conflict. This dynamic shows how limited Syria's options are. Even though Syria emerged from the war as a Western-leaning country, its economy has not been closely integrated into global financial systems, even after Europe & Washington ended decades of sanctions against the?country last year. Three Syrian officials and two analysts said that the trade was a reflection of economic necessity for Damascus. It also gave Moscow influence over a country in which it still has two air and naval bases. Officials who spoke under condition of anonymity in order to discuss sensitive issues said that the relationship with Russia could strain ties between the EU and Washington. However, Damascus has limited options at the moment. According to Syrian economist Karam Shar, the trade could also expose Syria's energy industry to new Western sanctions. Shaar added that the Syrian government is aware of the risks, and is looking for alternatives suppliers. A representative of the state-run Syrian Petroleum Company said that Damascus is trying to diversify its suppliers and has, to date, unsuccessfully sought an oil agreement with Turkey, a country close to Sharaa's government. SynMax, a maritime analytics firm, said that financial constraints, commercial risk and years of conflict limited Syria's ability to access conventional tanker operators. It left Russian-linked networks as the most viable option. SynMax, in a press release, said that these shipping networks "could present reputational issues for Syria when it seeks re-establish its commercial credibility." However, the statement noted that a "transition to conventional international supply chain is unlikely to happen immediately." The Russian or Syrian energy ministries did not respond to comment requests. The U.S. State Department refused to comment on Syria’s oil trade with Russia. The U.S. Treasury issued temporary waivers to countries that bought sanctioned Russian oil or petroleum products at sea in response to the war in Iran. The Ministry of Information in Syria, which deals with media requests for Sharaa's Office, did not either respond. Officials from the Syrian Energy Ministry said that Syria's dependence on Russian oil was also due to its small market and low purchasing power. This made it difficult for Syria to sign long-term contracts, such as with Gulf oil producers. In March, the Central Bank of Syria reactivated their account with the Federal Reserve Bank of New York. This opened the door to wider banking communication with the global financial systems for the first since 2011. RUSSIA IS FIRST TO SEND OIL FOLLOWING ASSAD'S DEATH According to Kpler and an official, Russia was the first country to send a cargo to Syria following Assad's fall. It went on to ship 16.8?million bbls by 2025 – or 46,000 barrels a day – through 19 cargoes between February 28th and December 31st. Calculations show that this has increased to 60,000 barrels a day. The names of 21 vessels that arrive in Syrian ports from Russia almost weekly were tracked. All 21 vessels are under Western sanctions. The increase is a dramatic departure from the previous years. Iran was Syria’s main crude supplier until 2025. Russia's contribution was limited to occasional diesel deliveries. Kpler data indicates that in 2024, all crude imports - 22.2 million barrels – came from Iran. This was after Assad fell. The government has regained control of the oil fields in eastern Syria but domestic production is still limited. Al-Omar, the country's biggest field in Deir-Ezzor, produces 5,000 barrels of oil per day. Total domestic production was 35,000 bpd by 2025, which is far below the 350,000 bpd levels before war. According to officials from the Syrian Petroleum Company, and the energy ministry, Syria's daily fuel and oil needs are between 120,000 and 150.000 barrels. Additional volumes, estimated by officials as around 50,000 bpd, are smuggled in from Lebanon, which imports its oil from many sources, including Turkey, Saudi Arabia, and Russia. The Russian shipments have covered the gap of approximately a third of the domestic demand. These contracts were purchased at a discounted price to Brent crude benchmark prices before the Iran War. An official from the Syrian Company for Oil Transport who is familiar with these contracts confirmed that the contracts were booked in advance of the Iran War. Syrian authorities do not reveal the origin of oil shipments in their state-run media, despite the fact that they are announced in public. This is because Russia's military support for Assad's government makes it unpopular in Syria. The government only identified one delivery, from an ally Saudi Arabia. It was described as a gift. Syrian officials admit that the fates of Russian bases are often discussed between Damascus, and Western capitals. In an April post on X, U.S. Republican Congressman Joe Wilson stated that Syria should "do the right thing" and do what the majority in Syria supports and remove the bases. SANCTIONED VESHELS LSEG data show that at Syria's Mediterranean Terminals, trade is handled through a rotating tanker fleet linked to Russia's network sanctioned or risky tankers. These vessels operate under multiple flags such as Panama, Liberia Marshall Islands, Comoros Madagascar Oman, Russia and Liberia. According to SynMax's analysis, ship-to-ship transfers are part of the supply chain and often take place near Greece, Cyprus, or Egypt. These 'transfers of crude oil at sea, rather than the direct unloading of cargo in port' are often used to cut transportation costs or evade sanctions through obscuring origin and ownership. The ship-to-ship operation indicates that the United States does not completely turn a blind-eye to these activities and that at least some of these shipments are being concealed by the Syrian and Russian authorities, said Shaar, an economist. SynMax reports that on its short journey from Cyprus, the?Comoros-flagged AlbarraqZ, sanctioned in January by the U.S. for alleged links to Iran-backed Houthi network, appears to have taken oil via three sea transfers. Ships had left Russian port before anchoring near Syria's Tartous where draft changes of 11.9 meters to 7 metres?suggested a cargo discharge. The purpose of these transfers could not be determined. Some vessels are linked to Iranian-linked networks of trading that Russia also uses. The U.S. Treasury sanctioned the Guinea-flagged Aether in 2025 and the Madagascar-flagged Briont in 2025 because of their links to Hossein Shamkhani's network, the son a former Iranian Supreme leader advisor. SynMax discovered that both vessels showed irregular tracking behavior. Aether transmitted intermittently from the beginning of January, and Briont broadcast under another vessel’s identity starting in mid-January. Could not determine the cause of the intermittent location data. One source said that Syria used these transfers partly because officials were familiarized with the logistics networks after being excluded for years from the normal shipping networks. Other ships that unload in Syria seem to be more closely linked to Russian logistic. According to two different analyses conducted by the intelligence firms Lloyd's List & Kharon, both Oman-flagged Carma & Lynx were owned by an UAE-based company that is linked to Russia's Sovcomflot state shipping giant. According to two separate analyses by intelligence firms Lloyd's List and Kharon, the Comoros flagged Grinch was detained by France back in February. The U.S. & EU have been sanctioning it since last year because of its links with Russia's oil exporting fleet from Murmansk. Could not independently verify ownership of the ships. Noam Raydan is a maritime and energy analyst with the Washington Institute. He warned that it's not just about Syria paying for and getting its oil. She said: "The question is, who are the sanctioned players that benefit from this trade?" (Written by Feras Dalatey; edited by Frank Jack Daniel
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Croatian fishermen hang their nets in response to fuel price hikes due to the Iran war
Dinko Cvjetojevic, a fishing captain in Dubrovnik whose day's work was halted because of the rising cost of fuel, sat on his?boat, moored there. The summer was approaching fast, and it was sunny. There were plenty of fish in the sea. Cvjetojevic, however, had already done the math. Fuel costs now account for as much as 90% of all operating costs. This is roughly double what they were before the conflict cut off the Strait of Hormuz, the main oil export route. This made fishing "completely non-profitable". He said: "As you can see, today is a beautiful day but the ships have been moored." He'stocked up fuel before the prices went up, so he could 'keep a second ship?running for the time being. He said, "I am constantly trying to keep alive." If it continues like this, we will work for another month and then go swimming. Commercial fishing is an important but small sector on the Adriatic coast of Croatia. It employs several thousand people, and provides fresh fish for restaurants and hotels in peak tourist season. When related activities are taken into account, tourism, Croatia's primary economic engine, represents about one-fifth the?gross?product. This leaves a large portion of the economy vulnerable if fuel prices continue to rise through the summer. Cvjetojevic stated that 'his boats usually supply markets from Dubrovnik and Istria with part of their catch being exported to Italy and Slovenia. He has now scaled down his business and is only selling locally. He said, "Without the state's help, I don't see a solution." (Reporting and writing by Antonio Bronic, Ivana Sekularac, Editing by Andrew Heavens).
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Aluminum prices rebound amid supply concerns in the US-Iran standoff
Aluminum?prices rose on Friday as a result of fears that supply would be limited due to the ongoing standoff between Iran and the U.S., which has impacted shipments from the Gulf, where there are large smelters. Iran warned on Thursday that it would respond to any new attacks by the United States with "long, painful strikes". In official open-outcry trade, benchmark three-month aluminum on the London Metal Exchange increased 1.4% to $3.522 per metric ton, ending five sessions of losses. Metal used for construction, transportation and packaging reached $3,672 per?ton, its highest level in four years on April 16. This was after disruptions in operations in the Gulf?which accounts for around 9% of worldwide production. Prices fell after the truce that halted the attacks. Nitesh Sha, commodity strategist for WisdomTree, said: "It is?the danger of supply-side destruction due to a prolonged conflict, as the facilities in Qatar or Bahrain will not open?anytime? soon." There are indications of escalation and then de-escalation. You don't know where you stand at any given time. Prices are a bit choppy. Emirates Global Aluminium has said that it could take a full year to fully restore primary aluminium production in its Al Taweelah Smelter, which was damaged by an Iranian attack. The LME Cash Contract premium to the three-month Future The price of a ton rose by 7% on Friday to $60, after having more than doubled in the past two months. This indicates concerns about supply. The Shanghai Futures Exchange was closed for Labour Day until Wednesday, which slowed down trading. LME nickel dropped?0.5% during official activity, to $19380 per ton, after reaching a two-year high of $19 645 earlier in session due to reduced supplies from top producer Indonesia. Bank of America analyst Michael Widmer stated in a note that the nickel positioning adjustment was?remarkable. Funds switched from being net-short to net-long. "All things considered, we only see a limited downside to nickel." LME copper for three months fell 0.2%?to $12.965 per ton. Zinc dropped 0.6% to $3.342, while lead remained unchanged at $1.955. Tin gained 0.2%, to $49.300. Click here to see the latest news in metals.
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Gold prices rise, causing gold to fall by a weekly loss
Gold prices dropped more than 1% on Friday, and are expected to drop a similar amount each week as high oil prices continue to fuel inflation fears that could discourage central banks from reducing interest rates. At 1149 GMT spot gold was down by 1.1%, at $4,573.33 an ounce, and is on course for a loss of 2.8% per week. U.S. Gold Futures for June delivery dropped 1% to $4585.20. UBS analyst Giovanni Staunovo said that gold remains negatively correlated with oil in the short-term, because it impacts interest rate expectations. Iran warned on Thursday that it would respond to any new attacks by the United States with "long and painful" strikes on U.S. bases, while reiterating their claim over the Strait of Hormuz. Brent crude prices are now double what they were at the beginning of the year. This has raised concerns about a global slowdown, as well as higher inflation. U.S. Inflation accelerated in march as the war increased gasoline prices. This reinforced expectations that the Federal Reserve would keep interest rates at current levels well into next. Following similar decisions made this week by both the Fed and Bank of Japan, the European Central Bank and Bank of England kept interest rates unchanged on Thursday. In a high-interest rate environment, gold, which is traditionally seen as a hedge against geopolitical unrest and inflation, may lose its appeal in favor of yield-bearing investments like U.S. Treasuries. Staunovo, however, said UBS maintained a positive outlook for the next six to twelve months. He said that the uncertainty surrounding the upcoming midterm elections in the United States, as well as expectations of a weaker U.S. Dollar over time and falling real interest rates will likely "support" investment demand along with continued central bank demand. He said that these factors could push prices up to $5,900/oz in late 2026. Silver spot prices dropped 0.3%, to $73.53 an ounce. Platinum was down 0.5%, at $1,975.65, while palladium fell by 0.1%, to $1,522.18. (Reporting by Anjana Anil in Bengaluru; Editing by Kirsten Donovan)
Denmark's FLSmidth looks into possible breach of sanctions against Russia
The Danish FLSmidth, a supplier of mining equipment and cement technologies, said in a Friday statement that it was investigating whether or not it had violated'sanctions' after discovering it had supplied certain pre-contract materials to Russia.
As part of a continuing internal investigation, the company found that it provided materials to Russians in connection with limited potential projects in Kazakhstan.
It added that the company had ceased to pursue tenders.
When asked about the sanctions FLSmidth may have violated, the company replied that it had sent an email to both the U.S. authorities and the Danish ones.
The company stated that "as the investigation is still in progress, we are only able to share the information contained in this press release at this time."
The U.S., the European Union and other countries imposed sanctions against Russia after its invasion of Ukraine.
FLSmidth stated that the tender activities which occurred before 2026 could be considered services within the scope of applicable sanction regulations and in conflict with internal procedures.
The company said that the tender documents were given 'at the proposal stage, without the project contracts being 'completed.
FLSmidth announced that it had notified the relevant authorities including the U.S. Treasury Office of Foreign Assets Control and Danish Business Authority. It also said it would cooperate with authorities while?its internal investigations progress.
The company said it was 'in the process of reviewing, enhancing and improving its compliance programme, risk management measures and other mitigating action. (Reporting and editing by Sharon Singleton, Louise Rasmussen)
(source: Reuters)