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Gold prices to drop this week as Gulf attack reinforces rate-hike betting
Gold?edged down on Friday - and was on course for a 'weekly drop, on fears that escalating U.S. - Iran tensions would fuel inflation. This could keep the Federal Reserve hawkish in its monetary policy. Gold spot fell by 0.2%, to $4.113.02 an ounce at 0735 GMT. It was on track for a weekly drop of 1.5%. U.S. Gold Futures for August?delivery fell 0.4% to $4121.90. Tim Waterer is the chief analyst at KCM Trade. He said that gold was in consolidation mode after yesterday's gains. Traders were hesitant to commit to further upward movement due to the uncertainty surrounding U.S.Iran relations. The oil prices are on course for a gain of a week as U.S. and Iran continue to trade strikes. Iranian forces have launched attacks against U.S. military infrastructure in Gulf states. The Fed is likely to raise rates this year as inflation fears have been fueled by the latest round of strikes. According to CME's FedWatch, the markets are now pricing in 63% of a rate hike for September, up from 54% just a week ago. Gold is often seen as an asset that can be used to hedge against inflation, but it becomes less attractive as a yieldless asset when interest rates are high. I expect gold to continue attracting buyers during dips, as long as oil remains at current levels. Waterer stated that a sharp rise in oil prices could reignite inflation and interest rate concerns, which would hurt gold. The minutes of the Fed meeting in June, which were released earlier this week, revealed that policymakers are increasingly concerned about inflation. On Thursday, HSBC cut its average gold price predictions for 2026-2027. The reason given was a shift to a more hawkish stance in the U.S. Expectations about monetary policy and a stronger dollar. Silver spot rose 0.2%?to $60.10 an ounce. Platinum gained 1.2% at $1,629.03, and palladium increased 2.2% at $1,274.34. All three metals are on course for weekly losses. (Reporting and editing by Sherry Jacobi-Phillips, Subhranshu S Ahu and Swati verma from Bengaluru).
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IEA's Russian crude oil production forecasts are cut after Ukraine's attacks
According to the International Energy Agency, it has reduced its projections for Russian oil production due to Ukrainian attacks on the country’s energy infrastructure. In recent months, Ukraine increased 'drone strikes' on energy facilities such as oil refineries in an effort to stop Moscow from waging war. The Paris-based agency stated that "continued strikes against refineries, storage and transport facilities have weakened the production outlook. We have therefore cut our Russian supply forecast for this year and the next by 85,000 barrels a day and 150,000 bpd, respectively, to an average of 8.8 million bpd during the forecast period." The IEA predicts that oil production from Russia, which is the third largest producer in the world, will?reach 8,9 million bpd by this year, and 8.8 millions bpd by 2027. This is down from 9,2 million bpd?in?2025. The outlook for this year was reduced by?85,000 and?150,000 bpd, respectively. The agency reported that Russia's crude oil production in June increased by 120,000 bpd compared to May, reaching 8.86 million bpd. This is 900,000 bpd less than the quota established by the OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies. In recent months, the attacks on refineries also resulted in an increase in?Russian crude oil exports. According to industry sources, shipments out of Russia's western port reached a record-high?in June. They are expected maintain this level in July. The data from the sources showed that exports?from the Baltic ports of Primorsk and Ust-Luga as well as the Black Sea port Novorossiysk reached almost 3 million bpd?in June. The IEA estimated that Russia's?total oil exports were 5.8 million bpd in June, an increase of 620,000 bpd over May. Last month, oil?products exported fell by?230,000 from May to a total of?1.91million bpd. In order to combat domestic fuel shortages, Russia has introduced a ban on diesel exports this week. (Reporting and Editing by David Goodman).
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The IEA warns that escalation between the US and Iran could threaten oil surpluses in 2027.
The International Energy Agency said that the recent escalation of hostilities between the U.S., and 'Iran, could change its 'forecast of an 'important oi l market surplus next year. The global oil market received some relief last'month, as a peace deal between the U.S.A. and the 'Iran opened the Strait. Its closure had effectively cut off 'as much as 14 million barrels of crude oil per day during the height of the biggest oil supply crisis ever. The agency reported that global oil production rose by 4.1 mbpd in June but was still 9.4 mbpd lower than pre-war levels. The agency expects that supply will increase by?7.5million bpd in the next year. However, this depends on better?Hormuz Transits. The report said that an escalation of?hostilities in London on 7/8 July could cloud the outlook, and could "upend" the forecast which?sees a market turning?towards a surplus by next year. (Reporting and editing by Jan Harvey; Robert Harvey, London)
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Copper stablises in the face of Iran's escalation fears
Copper prices were flat on Friday as fears faded of an economic hit and a drop in metal demand due to a spate of tit for tat attacks between the U.S.?and Iran. The benchmark three-month copper price on the London Metal Exchange was?largely steady, with a drop of only 0.01% at $13,487.5 per metric ton as of 0700 GMT. The red metal prices are now close to the levels they were at the beginning of the week. This is the culmination of a few volatile days, during which fears about a new round in the conflict between the U.S. Prices were affected by concerns about a new round of fighting between the?U.S. The Shanghai Futures Exchange's most traded copper contract rose by?1.38%, to 103 710 yuan per ton ($15 298.72). The dollar is on course to drop for a third consecutive day. This will support copper prices, as buyers who use other currencies can buy it at a lower price. John Williams, the president of the New York Federal Reserve, on Thursday downplayed inflationary effects from the latest Middle East flare-up. Copper, an industrial metal that is dependent on economic growth and is heavily influenced by inflation and interest rates, has a high price. Interest rates that are higher dampen the demand for industrial metals like copper by reducing economic activity. Aluminium, however, was on track to have its best week ever since the beginning of April. It gained 3.33%. On the LME, it reversed its early gains and fell 0.11%. The SHFE saw a gain of 0.26%. Aluminium has seen a'supportive' slide in stocks, and a forecast of a deficit overall this year. On Thursday, the LME Cash-to-Three-Month Aluminium Spread edged into backwardation, signaling a tighter physical availability in the near term. LME zinc fell 0.21% after rising more than 3% Thursday due to a reported fire in a South Korean smelter. The SHFE price rose?1.06%. Lead was stable on the LME, while nickel rose 0.08% and tin fell 0.12%. On the SHFE, lead fell 0.34%. Nickel gained 0.95%. Tin rose 1.85%. $1 = 6.7790 Chinese Yuan Renminbi (Reporting and editing by Ronojoy Mazumdar).
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Australian shares snap four day decline as banks, miners and miners rise
After a positive session on Wall Street on Friday, Australian shares ended a four-day loss streak. This was despite a resurgence in the Middle East conflict raising supply concerns. The benchmark S&P/ASX 200 Index ended the week 0.5% higher, at 8,806.00. The benchmark index lost 0.4% during the week. Wall Street's overnight performance was boosted by Micron Technology’s plans to invest over $250 billion in the U.S. until 2035. Iran launched attacks against U.S. military installations in Gulf States on Thursday, raising fears of a further disruption of supply at the Strait of Hormuz. Tim 'Waterer, KCM Trade chief market analyst said: "Today’s positive price movement on the benchmark indicates investors are still leaning towards?optimism...A better night on Wall Street improved sentiment." BHP and Rio Tinto, two of the world's largest mining companies, are due to report earnings next week. William Taylor, ETF Shares COO and Portfolio Manager, said: "Given the combined weight of the index, the banks and major miners are likely to attract the majority of investor attention." BHP Group posted its best day for nearly a week, gaining 2.5%. The mining index gained 2.5% and ended four consecutive sessions of losses. The banks' margins improved by 0.6%, the best since the week ended May 22. This was due to a rate environment that has been higher for longer. All "Big Four' banks were in the black. Gold stocks followed suit and rose 2.7%. This was the best day for the index in a whole week. Gold miner Genesis Minerals gained 3.9%. Energy stocks, which had been on a roll, dropped by 0.2% but still posted their best week for nearly four months. The New Zealand markets were closed for the?public holiday on Friday. (Reporting by Aamir Shaik Khalid in Bengaluru; Editing by Janane Venkatraman) |1|For more information on DIARIES & DATA: U.S. earnings diary Wall Street Week Ahead Global Economy Week Ahead ................................................................ For latest top breaking news across all markets |1|
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Japan's Nikkei climbs on AI rally, as hopes of pension asset shifting lift yen and bonds
The Nikkei index rose on Friday, helped by a rally of AI-related stocks. Japan's currency and bond markets also grew on the back of a possible reorientation in the investment strategy?of its vast pension funds. The Nikkei closed at 68 557.73 after rising up to 2.4% in the previous session. The Topix index rose 0.39%, to 4,036.08. The yield on Japan’s 10-year government bonds fell by 11.5 basis points to 2.76%. This is a decline from the previous high of three decades. The yen gained?0.5% versus the greenback, reaching 161.550. Wall Street tech shares soared when Micron Technology announced plans to invest $250 billion in the United States by 2035. Shuutarou Yasuda is a market analyst with Tokai Tokyo Intelligence Laboratory. Kazuaki Shimada is the chief strategist of IwaiCosmo Securities. He said that the index had trimmed its early gains because?South Korea’s benchmark KOSPI was losing strength. Sumco, a chip-related company, surged 15.40% and reached a limit daily high of 5,244yen. SoftBank Group, an investment conglomerate in the tech sector, rose 10.65%, while chip-testing equipment manufacturer Advantest climbed 2.3%. Satsuki Catayama, Finance Minister, said on Thursday that the Government would look at ways to encourage pension funds (including the Government Pension Investment Fund) to increase their investments in domestic financial assets. Bonds and the yen both benefited from the prospect that Japan's largest pension fund investors would direct more funds to local markets. Both have been under pressure for years. Masahito Sugawa, senior strategist at Daiwa Securities, said that Katayama's comments helped reverse the selling trend of Japanese government bonds and the yen. "Now, half of the assets held by?Japanese Pension Funds are in foreign assets. The market bet that a possible shift in asset allocation to Japanese assets would be positive. Miki Den is a senior Japan rate analyst at SMBC Nikko Securities. She said that the yields continued to decline as foreign investors purchased JGBs in order to cover their short positions following the opening of the European'market. Fast Retailing shares closed down 3.59%, their biggest one-day decline since May 12.
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Australia confirms the first H5N1 bird influenza case in a local seabird and dead seal is tested
Australia confirmed Friday the first case in Australia of the deadly H5N1 bird virus. It also said it was 'testing a seal that had died for possible infection. This has raised concerns about the disease spreading more widely since it arrived in the country last week. The National Science Agency of Australia confirmed that the virus was present on a greater crested bird found in Robe, a coastal town in South Australia. Agriculture Minister Julie Collins confirmed this. All other cases were found in seabirds migrating. The total number of positive tests in the country now stands at 12, with two more infections confirmed on Friday in South Australia and another in Western Australia. Collins stated that the situation was "concerning", but not surprising, and added that there were no signs of mass mortality or spread to poultry or other animal populations. She said that "our scientists are doing further research to determine the 'potential pathway' which resulted in a?Australian Seabird infection". What we know is that it is a coastal bird that shares a range with migratory birds that have tested positive for the H5 virus in the past. Hamish McCallum is an infectious disease ecologist from Griffith University. He said that the virus spreading to local seabirds was "very bad." He said that it is likely this case will be just the start of many more. A spokeswoman for the New South Wales environment department confirmed that H5N1 tests were also being conducted on samples taken from a young seal who died in Central Coast, New South Wales. If the test is positive, it would be the first time mainland Australia has confirmed a H5N1 infection in a mammal. New South Wales is the third state in Australia to have detected H5N1, following a positive test from a migratory bird on the Mid-North Coast earlier this month. Since 2021, the virulent strain has infected poultry farms, dairy farms, and some farmworkers. It has killed millions of birds and mammals. In June, Australia became the 'last continent to confirm an H5N1 case on a continental level. The virus was first detected in 2025, in the subantarctic territory Heard Island. Scientists estimate that the virus may have killed 13,000 seal pups at Heard Island.
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Gold prices to drop this week as Gulf attack reinforces rate-hike betting
Gold was?lower? on Friday, and?was?on track for a?fall weekly? on concerns that escalating U.S. -Iran tensions might fuel inflation and force the Federal Reserve to maintain a hawkish monetary policies. Spot gold dropped 0.1% per ounce to $4,115.79 by 0601 GMT. It was on track for a weekly drop of 1.4%. U.S. Gold Futures for August Delivery fell 0.4% to $4,124.90. Tim Waterer is the chief analyst at KCM Trade. He said that gold was consolidating today after yesterday's gains. Traders were hesitant to commit further to an increase in price due to the uncertainty surrounding US-Iran relationships. The oil?prices are on course for a weekly increase as the U.S. continues to trade attacks with Iran. On Thursday, Iranian armed forces launched attacks on U.S. infrastructure in Gulf states following an attack by?U.S. Strikes on Iran's southern coastal and eastern provinces. The Fed is likely to raise rates this year as inflation fears have been heightened by the latest round of strikes. According to CME's FedWatch, the markets are now pricing in 63% of a rate hike for September, up from 54% just a week ago. Gold is often seen as an inflation hedge, but it can lose its appeal in an environment with high interest rates. I expect gold to continue attracting buyers on dips, as long as oil remains at current levels. Waterer warned that a'sharp spike' in oil could reignite inflation fears and interest rate concerns, which would hurt gold. The minutes of the Fed’s June meeting, published earlier this week showed that policymakers were growing concerned about 'elevated inflation. HSBC reduced its average gold price predictions for 2026-2027 on Thursday. They cited a hawkish change in?U.S. Expectations about monetary policy and the'stronger dollar' were cited as reasons for HSBC to lower its average gold price forecasts for 2026 and 2027. Silver spot rose 0.3% to $60.19 an ounce. Platinum gained 1.4% at $1,632.99, and palladium increased 1.9% to 1,270.54. All three metals are on course for a loss this week. (Reporting from Pablo Sinha in Bengaluru and Swati verma; Editing by Sherry Phillips and Subhranshu sahu.)
The IEA warns that escalation between the US and Iran could threaten oil surpluses in 2027.
The International Energy Agency said on Friday that the recent escalation of hostilities between the U.S., Iran, and other countries could change its forecast of an oil surplus next year. Global supply increased in June after the Strait of Hormuz was reopened, but it still lagged behind pre-war levels.
Last month, global oil markets were given some relief as a peace deal between the U.S.A. and Iran allowed the opening of Strait of Hormuz. The closure of this strait had effectively cut off up to 14 million barrels of crude per day during the height of the biggest oil supply crisis ever.
The IEA reported that global oil supplies rose by 4.1 millions bpd during June, but remained 9,4 million bpd below the pre-war level.
The agency expects that supply will increase by?7.5m bpd in the next year?after a contraction of 3.7m bpd this year?but this is dependent on improved transits through Hormuz.
It said that an escalation of hostilities between 7-8 July could cloud the outlook, and upend the forecast which sees the oil market turning to a surplus in the next year.
The IEA forecasts for 2027 indicate that'supply will exceed demand by 4,62 million bpd in the next year, from an 860,000 bpd deficit last year.
The Paris-based agency, which advises industrialised countries, predicts that global oil demand will?fall by 1 million barrels per day this year before rising to 2 million in 2027.
The peak summer fuel demand season is expected to lift consumption by 8 million bpd compared to the low point in May at the height of the crisis. (Reporting and editing by Jan Harvey; London, Robert Harvey).
(source: Reuters)