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The US inflation data is the focus of attention as gold gains due to weakening dollar
The dollar fell on Thursday due to worries about the future independence of the U.S. Federal Reserve. Meanwhile, the market's attention shifted to the upcoming U.S. Inflation data to get clues on interest rate expectations. As of 0851 GMT, spot gold was up 0.5% to $3,347.39 an ounce. U.S. Gold Futures rose 0.5% to $3360.90. Dollar-denominated Gold is more appealing to other currency holders because the U.S. dollar has fallen. U.S. president Donald Trump called Federal Reserve chair Jerome Powell on Wednesday "terrible". He said that he had three or four candidates in mind for the top Fed position. Powell said that the Fed will proceed with caution in reducing rates if Trump's tariff plan leads to persistent inflation. Han Tan, the chief market analyst of Nemo.Money, said that "spot gold will remain in the range $3,000 to $3,500, barring more certainty about the timing of the Fed’s next rate reduction." The U.S. GDP report is due on Thursday, and the Personal Consumption Spending (PCE) Report on Friday. Tan stated that a surprise drop in the Fed's preferred measure of inflation could see spot gold move above its 21-day average and closer to the psychological level of $3,400 once again. Gold is seen as a hedge to inflation and economic unrest, but it loses its appeal in an environment of high interest rates, since it provides no yield. Palladium climbed 4.3% to reach $1,103.70. This is the highest price since late-2024. Platinum rose 3.5% to $1.402,57, its highest level since 2014. Nitesh Sha, commodities strategist with WisdomTree, says that internal combustion vehicles will likely remain relevant as long as governments continue to delay their phase-out goals. Biofuel adoption is still dependent on platinum group metals. Shah stated that the supply will likely remain tight due to geopolitical restrictions and limited new supply. Spot silver rose 0.5% to 36.49 dollars. Reporting by Ashitha shivaprasad, Bengaluru. Editing by Rachna uppal
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Trade talks between India and the U.S.: Key issues ahead of the July 9 deadline
Sources in the Indian government said that trade talks between India and U.S. had hit a snag over disagreements regarding duties on auto components, steel, and farm products. This has dashed hopes of reaching a temporary deal before President Donald Trump's deadline of July 9 to impose reciprocal import tariffs. Here are some of the main issues: HURDS TO A TRADE DEAL India's dependence upon agriculture, a major source for rural employment, has made it difficult for New Delhi, despite the risks posed by subsidised U.S. agricultural products, to accept U.S. requests for steep tariff reductions on corn, soy, wheat, and ethanol. Fearing the competition of U.S. companies, domestic auto, pharmaceutical and small-scale businesses are pushing for a slow opening of protected sectors. The U.S. wants greater access to agricultural products and ethanol. They cite a significant imbalance in trade, as well as expanded market access for automobiles, pharmaceuticals and alcoholic drinks, and medical devices. "Lack of Reciprocity" India has offered to reduce tariffs on a variety of farm products and give preferential treatment to U.S. companies, as well as increase energy and defence purchasing. However, Indian officials are still waiting for substantive proposals from Washington, given Trump's unpredictable trade policies. Indian exporters are still concerned by the U.S. tariff increases, which include a 10% base tariff on average, a 50% tariff on steel and aluminum, and a 25% tariff on auto imports. A proposed reciprocal duty of 26% is also on hold. ASSESSMENT OF STRATEGIC ALIGNMENT Indian policymakers view the U.S. over China as their preferred partner, but are cautious to compromise policy autonomy in international affairs. The U.S. has been India's biggest trading partner for many years. It is also a major supplier of technology, energy and defence equipment. Tensions over Pakistan India is wary of deeper strategic relations after Trump's perceived tilt towards Pakistan during the recent conflict between neighbours raised doubts regarding U.S. reliability. GROWING INDIAN IMPORTS TO U.S. New Delhi believes that exports will grow in the future, particularly in garments, electronics, and engineering goods, thanks to the tariff advantage it has over Vietnam and China. India's exports of goods to the U.S. will reach over $87 billion by 2024. This includes pearls, gemstones, and jewellery, worth $8.5 billion; pharmaceuticals worth $8 billion; and petrochemicals worth around $4 billion. Services exports, led by IT and professional services, were valued at $ 33 billion in 2024. With over $68 billion cumulatively in FDI from 2002 to 2024, the U.S. also ranks third among India's investors. US Exports to India U.S. manufacturing exported to India will be worth nearly $42 billion by 2024. However, there are high tariffs on these products. These range from 7% for wood products and machinery, to 15% to 20% for footwear and transport equipment and up to 68% on foods. According to a White House fact sheet published recently, the average tariff applied by the U.S. on farm products was 5% as opposed to India's 39%. (Reporting and editing by Raju Gopikrishnan; Manoj K. Kumar)
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World Bank and IAEA will cooperate on nuclear energy development and safety
The World Bank, the United Nations Nuclear Watchdog and other international organizations have signed a new agreement on cooperation in the development of safe nuclear energy for developing countries. This includes extending the lives of existing reactors. Ajay Banaga, President of the World Bank and Rafael Grossi, Director General of the International Atomic Energy Agency were to sign a memorandum in Paris as part of the return of the World Bank to nuclear energy finance. In a joint statement, the IAEA, the World Bank, and other international organizations have agreed to collaborate to improve knowledge of the nuclear industry, including the World Bank Group’s understanding of nuclear security, safety, energy planning and waste management. The institutions said that they would also work together to extend existing nuclear power plants' lifespans as a source of cost-effective, low-carbon energy and to accelerate the development of modular small reactors. They stated that these reactors have the potential of being widely adopted in developing countries. Banga stated in prepared remarks that nuclear energy's reliable baseload electricity was crucial for sectors which generate jobs, such as infrastructure and agribusiness. "Jobs need electricity. The same goes for factories, hospitals and schools. As demand increases -- due to AI and development -- we need to help countries provide reliable, affordable energy," Banga said. "That's the reason we embrace nuclear energy as a part of the solution - and reaffirm it as a part of the mix that the World Bank Group can provide developing countries in order to achieve their goals." Grossi stated that the landmark agreement is "a sign of a return to realism in nuclear power". It will also open up the possibility for private investors and multilateral development banks to look at nuclear power as an option for energy security. He said the partnership was a "crucial step" in clearing the path to financing small modular reactors, which have the potential to power developing economies cleanly. (Reporting and editing by Saad Saeed; David Lawder)
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Poland updates its green bond framework in anticipation of the first possible issuance within six years
The Finance Ministry announced late Wednesday that Poland had updated its green bonds framework. Poland is one of the most coal-dependent economies in the European Union and could be preparing for its first green bond issue in six years. Karol Czarnecki, the debt chief at the finance ministry, said in January that there was a "high probability" Poland would be issuing green bonds this coming year. He did not provide any further details on the timing of the issuance or its size. The last time it sold green bonds was in March 2019. Sovereign Green Bonds are debt instruments issued by governments to finance environmentally-friendly projects and sustainable development. The updated framework is based upon the International Capital Market Association's (ICMA) 2021 principles and pre-issuance check list, which outline the use and management of proceeds, the project evaluation and selection process, and the reporting requirements. The document states that eligible projects include those dealing with renewable energy, energy efficient buildings, "green infrastructure", and clean transport as well as sustainable land management, water, wastewater, and climate change adaption. Green infrastructure is the construction and operation the electricity grid. It can be either interconnected with the European system, or it can enable low-carbon generation. The Polish parliament passed legislation Wednesday that eases the rules for building onshore wind farm. According to the government, this is an important step in increasing renewable energy production and lowering power prices, as part of the broader effort to reduce Poland's dependence on coal. It is not clear if the bill will be approved in its final form, given the political opposition of both the outgoing president and the newly elected one, who are opposed to some of the reforms proposed by the liberal government. The first nuclear reactor in Poland will be completed by 2036. (Reporting and editing by Gergely szakacs, Hugh Lawson and Karol Badohal)
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China's stimulus plans and dollar weakness are driving up the price of iron ore
Iron ore prices rose on Thursday after reversing earlier losses. A weaker dollar and Chinese officials' promises to boost domestic consumption boosted investor sentiment. The day-traded iron ore contract for September on China's Dalian Commodity Exchange ended 0.64% higher, at 705.5 Yuan ($98.44). As of 0705 GMT, the benchmark July iron ore traded on Singapore Exchange was trading at $93.25 per ton. The dollar fell to a multi-year low on Thursday, after U.S. president Donald Trump's remarks about replacing Federal Reserve chair Jerome Powell raised concerns over the independence of central bank. Dollar-denominated investments are cheaper for holders of currencies other than the greenback. China also expressed its support, with Premier Li Qiang saying on Thursday that the government would take "forceful measures" to increase domestic consumption. Despite the gains, China's production and rising inventories kept them in check. Data from Chinese consultancy Mysteel shows that inventories of imported iron-ore sintering-fines increased for the third consecutive week, reaching 12.3 million metric tons as of 25 June. Meanwhile, consumption of sintering-fines dropped 1.5% on a weekly basis. Analysts at ANZ said that "Iron Ore Futures are on the verge of a new low for the year as strong supplies and lower production in China weigh down sentiment." Everbright Futures, a broker, said that iron ore exports from Australia and Brazil have increased. Vale, a major producer of iron ore in Brazil has also ramped up its supply to meet the demand for end-of-season products. Coking coal and coke, which are used to make steel, also rose on the DCE. They increased by 3.6% and 1.8%, respectively. Haitong Futures, a broker, reported that coal production was reduced by coal mines due to accidents and environmental concerns. The Shanghai Futures Exchange has seen a rise in most steel benchmarks. Rebar increased by 0.1%, while hot-rolled steel coils gained 0.39%. Stainless steels climbed 1.16 percent, and wire rod dropped 0.06%. ($1 = 7.1671 Chinese yuan). (Reporting and editing by Sonia Cheema, Mrigank Dhaniwala).
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Israeli attacks kill at minimum 21 Gazans, doctors say
Local health officials said that Israeli airstrikes and gunfire killed at least 21 Palestinians on Thursday in the Gaza Strip, while mediators sought to reach out to Israel and Hamas and resume ceasefire talks for the end of the war. Local health officials said that an Israeli airstrike in Gaza City killed at least nine people in a school for displaced families. Another strike in Khan Younis, in the southern part of the enclave, killed nine more people. Three more people were also killed and dozens wounded by Israeli gunfire as crowds waited for U.N. trucks on a major route in central Gaza. This is the latest of a string of deaths at distribution points. The Israeli military did not immediately comment on the incidents that occurred Thursday. Israel claims it wants to free the hostages and eliminate Hamas militants who attacked southern Israel in 2023 from Gaza. According to Hamas, the new deaths came as Arab mediators Egypt and Qatar reached out to warring parties to try to start new ceasefire negotiations. However, no timetable was given for the new round of talks. Benjamin Netanyahu, Israel's prime minister, who heads a coalition of far-right parties insists on Hamas, the group that has ruled Gaza since nearly 20 years, releasing all hostages and laying down their weapons. Hamas has said it will release hostages only if Israel agrees on a ceasefire permanent and withdraws its troops from Gaza. Hamas, while it conceded that it would no long govern Gaza has refused to talk about disarmament. According to Israel's tallies, Hamas militants took 251 hostages and killed more than 1,200 people when they attacked Israel in 2023. Israel responded with a massive military campaign. According to local health officials, Israel's retaliatory conflict has killed over 56,000 Palestinians and destroyed much coastal strip. The majority of hostages freed so far were released through indirect negotiations between Hamas & Israel.
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Australian shares fall as tech stocks weigh
Australian shares ended lower on Thursday. Technology stocks were the main drag, with software giant Xero falling after raising capital for a discounted price to fund Melio Payments' buyout. The S&P/ASX 200 Index closed at 8,550.8, a 0.1% decrease. The benchmark index ended Wednesday with a flat finish. Technology stocks fell 2.1% and closed at their lowest level in over three weeks. Xero, which dropped 5.3%, was the main culprit. The accounting software maker's shares resumed trading a few days after Melio Payments, a U.S./Israeli payments provider, announced that it was acquiring it for up to $3 billion. The company raised A$1.85billion ($1.21billion) at a discounted price of A$176/share, which is 9.4% lower. The deal is expected to help Xero establish itself as a leading global software provider, but there are still questions about the price, the possible dilution in free cash flow margin, and how the company's loss-making business will be integrated with Xero. This was stated by Tony Sycamore at IG, a market analyst. WiseTech Global, a larger competitor, fell by 0.6%. The Industrial sub-index dropped 0.4%, and Real Estate stocks fell 0.7%. After three sessions of new record highs, heavyweight financial stocks closed flat. Commonwealth Bank of Australia, Australia's largest lender, closed down by 0.4%. Sycamore stated that the financial industry is overbought, and there could be a slight cooling. Copper prices reached a new two-week high. Healthcare stocks rose by 0.4%. Investors in the local market are now waiting for retail sales figures due next week. Sycamore stated that there are concerns about Australia's growth trajectory. Retail sales data could reinforce the case for rate cuts in July, and possibly a follow-up in August. The benchmark S&P/NZX 50 Index in New Zealand ended a six-day loss streak by finishing 0.2% higher, at 12,480.05. $1 = 1.5335 Australian Dollars (Reporting and editing by Vijay Kishore in Bengaluru)
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Wall Street Journal, June 26,
These are the most popular stories from the Wall Street Journal. These stories have not been verified and we cannot vouch their accuracy. Blue Origin founder Jeff Bezos has spoken to U.S. president Donald Trump at least two times this month, as he attempts to take advantage of a rivalry between SpaceX founder Elon Mush and Trump to bag more government contracts. Shell denied that it had approached BP and was involved in negotiations for the largest oil deal of a generation. Conagra Brands is removing certified colors for food, drugs and cosmetics from its U.S. frozen products portfolio by 2025. Ulta Beauty announced that its finance chief Paula Oyibo had resigned after just a few months and appointed Chris Lialios, an insider as its interim CFO. The U.S. Antitrust Commission cleared Mars' $36 billion acquisition of Pringles maker Kellanova, but the EU has opened a full investigation, claiming that it could result in price increases. - The President has toyed around with the idea that he would announce and select Jerome Powell as his replacement before September or October.
India's rice harvest is a record crop, resulting in a surplus of ethanol.
India has allocated record volumes of rice for ethanol production, as it battles with unprecedented inventories. These are expected to grow further when the new crop arrives. This is a turnaround from the earlier shortages which led to export restrictions.
The conversion of more rice into ethanol helps reduce the rice stock in the world’s largest producer and exporter. It also keeps India’s ambitious ethanol blend programme on track, despite the drop in sugar cane supplies.
India lifted the last of two years' worth of export restrictions in March. The poor rains had curtailed rice production. The abundant monsoon rainfall this year is expected to produce a bumper harvest.
A senior government official, who declined to be identified because he wasn't authorised to talk to the media, said: "Our number one priority is to make sure that we have enough food."
The official explained, "We have a lot more rice than is needed for this purpose and we decided to use some for ethanol production."
Food Corporation of India, a state-run company, has allotted a record amount of rice to ethanol. This is equivalent to almost 9% of the global rice shipment in 2024/25's marketing year that ends in June. The previous year, FCI rice was used to make ethanol in less than 3,000 tonnes.
FCI purchases nearly half of India’s rice crop. It currently has reserves of 59.5 million metric tonnes, including unmilled rice, on June 1. This is far more than the government’s target of 13.5 millions tons for July.
Rice for ethanol is a great alternative to corn, which was spiking last year and forcing India to import record amounts of corn.
Grain-based distilleries can use damaged grains, corn, or rice as their feedstock. They switch between them based on the price.
India, which is the world's third largest oil importer, and the biggest consumer of petroleum products, wants to blend 20% ethanol in gasoline by 2025/26. It almost reached that target last month, with 19.8% ethanol thanks to abundant rice.
In 2023, sugarcane supply, which had accounted for 80 percent of ethanol feedstock up until then, plummeted due to drought, forcing the largest consumer of sweetener in the world to drastically reduce sugar diversion for ethanol.
In India, the gasoline last year contained 14.6% ethanol.
PROBLEM of PLENTY
Arushi JAIN, joint secretary of the Grain Ethanol Manufacturers Association, stated that even more rice would be used to produce ethanol if government lowers the price of rice or increases the price for buying ethanol.
According to Akshay Modi of Modi Naturals, an ethanol producer, the FCI sells rice for 22,500 Indian Rupees ($262.19) a ton while oil marketing companies purchase rice-based bioethanol at 58.5 rupees a litre. This doesn't leave enough margin to increase rice-based bioethanol production.
FCI stocks may rise as India will likely harvest a bumper crop in October, according to B.V. Krishna Rao of the Rice Exporters Association.
Rao said that India could only increase its exports so far, since it already accounts more than 40% for global rice shipments. India has aggressively exported rice since removing export restrictions. Shipments are likely to increase by nearly 25%, reaching a record of 22.5 million tonnes in 2025, reducing the exports from rivals such as Thailand and Vietnam.
According to the Food and Agriculture Organization, India harvested 146.1 million tonnes of rice in this crop year that ended in June. This was a record harvest, and far exceeded local demand, which was 120.7 millions tons.
Himanshu Agrawal is the executive director of rice exporter Satyam Balajee. He said that rising stockpiles would force India to allocate more rice for ethanol next marketing year.
Agrawal said, "The government is going to find it difficult to sell all the rice that they purchased from farmers." $1 = 85.8140 Indian Rupees
(source: Reuters)