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Oil rises as US-Iran tensions increase, causing gold to fall to an 11-week-low
On Wednesday, gold?fell?to an 11-week low, as oil prices?rose?on renewed hostilities between Iran and the U.S., fueling concerns about inflation. Gold spot was down 1.7% to $4,191.84 an ounce at 0747 GMT after reaching its lowest level since 23 March. U.S. Gold Futures for August Delivery fell?1.6%, to $4,215.60. Ilya Spivak is the head of global macro at Tastylive. He said, "We are seeing a readjustment in what central banks will do globally, and that there has been a major shift towards hawkishness." After President Donald Trump claimed that Iran had?shot down a U.S. Apache helo in the Strait of?Hormuz, the United States launched attacks against Iran on Tuesday. Iran's Revolutionary Guards claimed that they retaliated on Wednesday with attacks against an American base in Jordan as well as 21 other targets within the Gulf. The rise in oil prices has led to expectations of higher interest rates for longer. Gold is often seen as a hedge to inflation. However, rising rates can weigh down on this metal. According to the CME FedWatch tool, traders are now pricing in more than 70% of an increase in U.S. interest rates by December. The markets are waiting for key U.S. reports on inflation?this coming week. These include the Consumer Price Index (CPI) data of May, which will be released later that day, and the Producer Price Index, due out Thursday. This is to gauge the Federal Reserve’s monetary policies. Spivak stated that if we are able to 'break the $4.100 level then I believe the path of resistance for gold fundamentally changes, and we may be starting to?look at $3.500 as the next level towards the end of the year. Silver spot fell by 1.3%, to $64.54 an ounce. Platinum fell 3%, to $1675.25, while palladium dropped 0.7%, to $1213.47. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu, Sonia Cheema and Harikrishnan Nair)
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Copper prices fall as macro-concerns outweigh US Tariff Fears
Copper prices fell on Wednesday as the volatility of the Middle East conflict and macroeconomic worries overshadowed any price support that could be provided by potential U.S. Tariffs. Benchmark three-month Copper on the London Metal Exchange declined 0.32% as of 0700 GMT to $13,572 per metric tonne. The Shanghai Futures Exchange's most traded copper contract fell 0.29%, to 104110 yuan (15,366.79) per ton. Oil reversed gains and fell 0.1% even after U.S.-Iran exchanged some of their biggest "strikes" since they agreed on a ceasefire agreement in April. The war has pushed up energy prices and stressed manufacturing, which is a major sector for copper demand. Official data released Wednesday revealed that producer prices in?China rose for the third consecutive month in May to their highest level since 2022. This was due to a combination of?rising commodities prices and improved demand' in certain industries. The U.S. will release its May inflation data later on Wednesday. This could influence the Federal Reserve’s policy decisions. The dollar rose after better-than-expected U.S. job data were released last Friday, and the possibility of a rate hike this year increased. The demand for industrial metals that are dependent on growth is generally affected by higher interest rates. Prices were supported by a?decision about U.S. Copper Tariffs expected in the second half of the year. The U.S. is considering a 15% tariff on copper imports starting in 2027. This could be followed by 30% from 2028. Aluminium lost 1.03% among other LME metals. Zinc lost 0.7%. Lead lost?0.58%. Nickel lost 0.58%. Tin lost 0.98%. Other SHFE metals, such as aluminium, zinc, and lead, have also fallen. Nickel has dropped by 1.72%, while tin is down by 0.92%.
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Taiwan uses battle-tested missiles for a'shoot and scoot" anti-invasion exercise
Taiwan's military fired its mobile HIMARS missile system on Wednesday, which is used by Ukraine. The aim was to simulate an invasion of Chinese forces and demonstrate its ability to "shoot and run" while avoiding counter-attacks. China, which considers a 'democratically-governed Taiwan' as its own territory has never renounced using force to take the island under control. Its warplanes, warships, and other military assets operate daily on the island. Last year, Taiwan tested its Lockheed Martin High Mobility Artillery Rocket Systems (HIMARS) off its east coast. The precision weapon was fired for the first time on Wednesday in central Taiwan, Taichung. The drill was designed to show the HIMARS's mobility and its ability to "shoot and scoot", which is to withdraw after firing in order to avoid being tracked by enemy radar, thus "greatly increasing battlefield survivability". Ko Ming-pin, the company commander, said that "our HIMARS demonstrated solid combat abilities of the unit and completed this 'training' successfully." HIMARS is one of Ukraine's most important strike systems. It has been used many times in the war against Russia. In the event of an invasion, the Chinese military is most likely to attempt to land on the beaches and mudflats on Taiwan's west coastline, which face China directly across the Taiwan Strait. Taiwan's military modernizes to be able to fight an asymmetrical war with mobile weapons like the HIMARS that still have a punch. This will turn the island into a 'porcupine' that is?harder to attack - and can survive a Chinese invasion. HIMARS has a range of approximately 300 km (190 mi) and could target coastal targets on the other side the Taiwan Strait in the province of Fujian, located in the south-east of China. The weapon will be combined with Taiwan's own Thunderbolt-2000 launchers to allow Chinese forces to be targeted when they leave port or attempt to land on Taiwan's coastline. On the first day of drill, Tuesday, Thunderbolts have been fired. Taiwan's government has rejected China's claims of sovereignty, saying that only its people can determine the future of their island. (Reporting and writing by Angie Teo, David Lague; editing by Christopher Cushing).
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Pennon UK returns to profit in annual report; CEO warns about operational work ahead
The British water utility Pennon Group reported a profit on Wednesday. However, its new CEO warned that operational discipline was needed to improve after extreme weather conditions and rising performance targets led to regulatory penalties. South West Water's?owner? posted an adjusted profit of PS135.1 (US$180.95) million for the year ending March 31. This is after a PS35.1 loss in the previous year. Regulated water revenues increased by around 25% on higher tariffs and consumption. Below are some details. * Chief Executive Keith Haslett stated that "Improving the operational discipline and capital delivery will be key to meeting our commitments." * A net operational penalty of approximately PS42 million was a result of exceptional storms, sustained rain and stepped up?performance targets? and penalty rates at the beginning of the new 5-year regulatory cycle. Pennon's financial performance is expected to continue improving as revenues increase and the company continues its focus on cost control. * The company has forecasted higher revenues in 2026/27, and said it expects the core profit to increase by 5-10% per year. * "We're well-positioned for anticipated changes in the water sector, and are ready to support the government's Transition Plan," said the company. It added that an update on the strategic plan would be released before the end of September. *?The reported year saw capital expenditures of PS643.6m, with PS588.5m in the water business, part of an investment programme of PS3.2bn, which runs until?2030. * Pennon’s revenue for 2025/2026?also increased to PS1.29billion, up from PS1.05billion a year earlier.
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Japan's Nikkei falls as Gulf tensions cause a shift away from high-flying technology stocks
Japan's Nikkei?average fell on Wednesday, as investors shifted away from?highly-priced technology stocks that are sensitive to energy prices due to renewed Middle?East tensions. The benchmark?Nikkei?225 Index fell 1.89%, closing at 64,179.27. This is a reversal of the 2.1% gain in the previous session. The Topix index fell 1.25%, to 3,847.60. The United States launched attacks against?Iran in retaliation of the downing a military 'helicopter on Tuesday, which deepened doubts about a possible peace deal. The 'Gulf Crisis' caused Japanese wholesale inflation rates to rise at the fastest rate in three years, pushing up domestic bond yields. "Declines are ?centred on AI- and semiconductor-related shares, as heightened tensions in the Middle East and upward pressure on domestic interest rates prompted investors to focus more on relative valuations," said Wataru Akiyama, an equities strategist at Nomura ?Securities. The Topix's fall is therefore relatively small compared to the (tech-heavy Nikkei). The Nikkei Index had 99 movers in its favor compared to 126 decliners. All?technical stocks were the biggest losers, led by Taiyo Yuden with a 12.9% drop, Furukawa Electric at 11.7% and Sumitomo Electric down 11.7%. Nintendo stood out as a?decliner, with a drop of 6.76% following the video game giant’s disappointing presentation of its upcoming titles. Tokyo Disneyland operator Oriental Land was up 4.3%, followed by Screen Holdings, which rose 4.2%. Reporting by Rocky Swift, Tokyo; editing by Harikrishnan Nair
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Indian gold prices fall below levels before the duty hike as overseas prices drop
Indian gold prices fell nearly 2% on Wednesday, to their lowest level since early May. They are now below the levels before duty hikes. Dealers said that the price correction may lead to an increase in imports and increase gold demand. On Wednesday, domestic gold futures dropped 1.93% to 149.500 rupees for 10 grams. This is their lowest level since May 5. India raised its import tariffs on gold and sliver to 15% last month from 6% as part of an effort to reduce overseas purchases and ease pressure on foreign exchange reserves. The demand for gold jewellery has been sluggish?in the last few weeks. "The correction in prices may encourage buyers to come back," said a Mumbai bullion dealer at a private bank. India's soaring gray market margins allow smugglers of the precious metal to "undercut" banks and refiners, according to industry officials and gold dealers. (Reporting and editing by Janane Vekatraman; Reporting by Rajendra J. Jadhav)
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As US-Iran hostilities resume, oil prices rise and gold drops
Gold dropped?to an?11-week low on Wednesday as oil prices rose?on renewed hostilities?between the U.S. Spot gold fell 1.3% to $4,206.08 an ounce at 0558 GMT after reaching its lowest level since 23 March. U.S. Gold Futures for August Delivery fell 1.4% to $4,228. Ilya Spivak is the head of global macro at Tastylive. He said, "We are seeing a readjustment in what central banks will do globally, and that there has been a major shift towards hawkishness." After President Donald Trump claimed that Iran had shot down an Apache helicopter of the United States in the Strait of Hormuz, Washington launched airstrikes against Iran on Tuesday. Iran's Revolutionary Guards claimed they had retaliated with attacks on a U.S. military base in Jordan as well as 21 other targets within the Gulf region. Oil prices rose 1% on Wednesday, confirming expectations that interest rates will remain high for longer. Gold is often seen as a hedge to inflation. However, higher interest rates can weigh down on this metal. According to the CME FedWatch tool, traders are pricing in more than 70% of a U.S. interest rate hike by December. The markets are waiting for key U.S. reports on inflation this week, including the Consumer Price Index (CPI) data in the afternoon and the Producer Price Index (PPI) reading on Thursday to gauge the Federal Reserve’s monetary policies. Spivak stated that "if we are able to break the $4,100 barrier, the resistance path for gold will fundamentally change, and I believe we may be looking at $3,500 by the end of the year." Spot silver dropped 1.2% to $64.59 an ounce. Platinum fell 3% to $1675.50 and palladium was down 1% at $1,209.36. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu, Sonia Cheema and Harikrishnan Nair)
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Mike Dolan: The boom in stock-pay increases the US economy's drumbeat
Stock market gains are not the real economy but they offer more than just a warm fuzzy feeling for many families. Stock-based compensation for workers may be a factor that helps bind them'more closely' The U.S. economy has remained stable despite a turbulent post-pandemic period of high inflation, rising interest rates and political and trade uncertainty. Many theories have been put forward, ranging from robust corporate and household finances to tax "cuts" and a three-year old AI investment boom. One of the most popular is that the stock market's resilience has boosted the so-called "wealth effect" and kept the consumption on track. The direct impact on compensation of workers of the rising stock price is worth considering, regardless of the merits. Morgan Stanley released a report this week that quantified some of the impacts of stock-based compensation. SBC has also risen to record levels, up 9% per year to reach a quarter of a trillion dollar through the last year. It said that "the technology sector was the largest issuer of SBC (but) practically every sector increased their usage of SBC during the past year." The report revealed that, over the next 15 years, technology firms will be the largest users of stock-based compensation, with SBC increasing across retail, electronic and tech sectors. SBC growth varies from 8% for manufacturing to 28% for utilities. Information technology and communication remain the focus of the awards, with the largest concentration. The 25% increase in expenses last year was equivalent to over $170 billion, or 3.9% of the combined sector revenue. The aggregate picture is consistent with the anecdotal reports of astronomical tech compensation packages. It may even be understated, given some of those eye-popping tales. SBC will continue to grow as a result of the IPOs that are expected in this year's AI sector. Critics argue that SBC is concentrated in the hands of the richest people and that focusing on this issue only amplifies the fears of an expanding income gap and a "K"-shaped economy, as tech stocks soar to new heights. Although broad economic indicators such as retail sales and GDP may simply register SBC linked income as a part of the mix, they are increasingly registering it as a growing heat. Consumer spending accounts for almost 70% of the GDP, and it is dominated by the top 20% of income earners in America. 'HUMAN CAPITALISTS' SBC exploded in popularity when it became an expense for tax and accounting purposes, 20 years ago. SBC accounts for 10% of total compensation but is on the rise. In the tech industry, this share can reach 30%. Wall Street's fortunes are becoming more closely tied to Main Street. At least, from the perspective of a helicopter. In recent years, many studies have linked the increase in SBC with what they see as an enigmatic and persistent decline of labor's share in national income. The 2021 paper by Andrea Eisfeldt,?MindyXiaolan, and Fed board economist Antonio Falato traced the increase in equity-based compensation since the 1980s. It found that this represented 36% of the total compensation for high-skilled workers in U.S. Manufacturing. The paper concluded that equity-based compensation is not included in macroeconomic models for labor's share, which leads to mismeasurement. SBC in manufacturing almost eliminates the decline of the high-skilled share of labor and reduces it by one-third. They wrote: "The growing and widespread use of equity-based pay has transformed high-skilled workers from a simple labor input into a class called 'human capitalists.'" Since then, those findings have become even more relevant. Stock market?doesn't capture the complexity, diversification and difficulty of real economy. Nor does focusing only on its richest beneficiaries solve those underlying issues. The stock market has become an increasingly important part of the economy. Not only for companies listed on the stock exchange, but also for employees and households who are paid in equity. Stock prices may seem to be thriving on the economic fundamentals that Wall Street is based on, but you should always be cautious when they go into reverse. The opinions expressed are those of Mike Dolan a columnist at. This column is great! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
The gasoline pump takes away what the Trump tax breaks gives.
Donald Trump, the U.S. president, proclaimed in February that this year's refunds were "substantially higher than ever before" thanks to individual tax breaks approved by 2025. He told taxpayers they should think of him as soon as their funds reached their bank accounts. "Don't use all this money at once!" He wrote this on the Truth Social platform. The gasoline pump is eating up the tax refunds from last year's Republican tax-cut legislation. This includes tax breaks for tips, Social Security retirement, overtime pay and car loan interest. Oil prices remained close to $100 per barrel on Friday, despite a tenuous truce in the U.S.-Iran war. The Strait of Hormuz was still closed. Even if the Strait of Hormuz, which carries about 20% the world's supply of oil, reopens in the near future, fuel prices may continue to rise for several months. This is according to the U.S. Energy Information Administration. It predicts that global benchmark Brent crude will average $96 per barrel this year. Rystad Energy estimates that the destruction of energy infrastructure in the Gulf will have a negative impact on future production. This figure may rise as the attacks continue.
Tax breaks will have the least impact on Americans who earn less and spend more money on gasoline. U.S. consumer price jumped the most since nearly four years, up 0.9% in March. This was due to the record-breaking increase in gasoline prices, largely because of the global oil price spike and the continued pass-through of tariffs. Bureau of Labor Statistics figures showed this on Friday. The Middle East conflict could cause higher costs for fuel, fertilizer and aluminum, as well as other inputs. Food inflation, and other price increases may also eat into any remaining refunds. According to the latest Internal Revenue Service data, as of March 27, 2025's average refund was $3,521. This is an increase of $351 or 11.1% from the previous year. The figures may change before the deadline for filing taxes on April 15, Wednesday. Morgan Stanley's estimate is $560, the conservative Tax Foundation's estimate is $611, and the U.S. Treasury's estimate of $1,000. Some of the relief could come from reduced income withholding, or lower quarterly tax payments for individuals.
TAX REFUNDS TURNING Into ECONOMIC CUSHION Economists 'at the Stanford Institute for Economic Policy Research' estimate that war-driven price peaks have pushed Americans' annual average gasoline costs for this past year up by $857. Brent futures traded at $99 per barrel on March 23, about $2 more than Friday, and the Strait of Hormuz was expected to reopen by April 10.
Democrats in the Joint Economic Committee in Congress estimate Americans spent an additional $8,4 billion on gasoline in the first month after the Iran War. They based their estimates on data provided by the motorist advocacy group AAA and Edmunds.com, as well as federal data on gasoline consumption. This figure represents nearly a quarter of the $26.5billion increase in total IRS refunds from March 27 to date. Professor of Economics at Stanford University, Neale Mahoney said that gas prices were the most important price in the economy. The impacts are modest in the macro-scenario, but they can have a big impact on the kitchen-table economy of a family and other things they pay attention to. Families who were expecting a larger refund or planning an expensive summer vacation this year, may decide to cut back on their plans. As higher prices for diesel, fertilizer and jet fuel spread through the economy, grocery bills are also expected to increase.
Analysts are now reducing their U.S. GDP and consumption forecasts by just a few tenths. Morgan Stanley expects that in 2026,?consumption will slow down to 1.7%, from 2.1%?in 2025. Durable goods are expected to take the biggest hit. Oxford Economics has reduced its global GDP forecast for 2026 from 3.0% to 2.6%, which is well below recent years.
Homeowners can now take advantage of bigger deductions
Most of the tax breaks in the One Big Beautiful Bill Act passed by the Republican-controlled Congress last year ?were retroactive to the start of 2025, so most of the first-year benefits will come through claimed income deductions.
This change would result in a refund increase of $138 for those who fall into the 12% tax bracket with incomes between $11,926 and $48,475. This would result in a $138 refund for those who fall into the 12% bracket and have incomes between $11,926 and $48,475.
Treasury Secretary Scott Bessent called the overtime deduction a "home run" last week, with 25% of filers claiming that it.
One of the largest breaks, the $30,000 increase in the deduction of state and local tax paid, requires itemization. This makes it largely out of reach for non-homeowners, who do not have mortgages or property taxes. Tax Foundation data shows that it's only when tax returns are in the range of market income of $71,659 - $126,348 that taxpayers have any money left after paying for their higher fuel costs. Market income is adjusted gross income plus tax-exempt interests, employer-sponsored pension and health benefits, and other items. Tax Foundation data shows, however, that even if you earn up to $37 486, the tax cuts are greater for those in the top 0.1%.
(source: Reuters)