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Gold continues to fall on fears of an interest rate hike in the US
Gold prices fell on Monday to their lowest level in more than two-months, amid fears of an increase in U.S. interest rates following a positive jobs report. Meanwhile, renewed hostilities across the Middle East drove oil prices up and increased inflation concerns. Gold spot was down 0.3% to $4,315.71 an ounce at 0725 GMT. It had fallen to its lowest level since March 23 during the earlier session. Prices dropped by?3% Friday, reaching a two-month low. U.S. Gold Futures for August Delivery were down 0.6% to $4,341.10. Kelvin Wong is a senior analyst at OANDA. He said that gold was under pressure due to the increased Treasury yields. The yield on the benchmark 10-year U.S. Treasury Note rose, after reaching a two-week-high in the previous session. This increased the opportunity cost of holding non-yielding gold. Israel claimed it had struck military targets on the western and central Iranian coasts, despite reports that U.S. president Donald Trump told Israeli Prime Minister Benjamin Netanyahu not to launch any more attacks. Oil prices rose by more than $4 per barrel, causing inflation fears and interest rate increases to rise. Gold is often seen as a hedge to inflation. However, higher interest rates can weigh down on this non-yielding material. The U.S. Economy posted a strong third consecutive month in May. This confirms that the labour market is gaining momentum after last year's stumble. It also gives the central bank more leeway to keep rates stable amid rising inflation caused by the Iran War. According to CME Group’s FedWatch tool, the markets are pricing in an increase by the Federal Reserve before year-end. There is a 72% probability of this happening by December. Cleveland Fed President Beth Hammack stated on Friday that the new job numbers showed the labour market was?roughly in balance and close to?full employment', while the continued high inflation could?require the Fed raising rates soon to control it. Silver spot was down by 0.5% to $67.47 an ounce. Platinum fell 0.6% to 1,766.70 while palladium rose 0.3% to $1229. (Reporting and editing by Subhranshu sahu in Bengaluru, Sherry Jacob-Phillips).
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Wall Street Journal, June 8,
These are the most popular?stories from the Wall Street Journal. These?stories have not been?verified' and we cannot?guarantee? their?accuracy. Israel and Iran traded missile strikes Monday, after the U.S. brokered a ceasefire in early April. This was their first direct attack since the truce went into effect. - Nvidia is ?teaming up with South Korea's SK Telecom and Naver ?to build gigawatt-scale artificial-intelligence cloud infrastructure in Asia. - Intesa Sanpaolo said ?it has launched a EUR30.66 billion ($35.33 ?billion) unsolicited cash-and-share ?takeover bid for Monte dei Paschi di Siena. Roche has announced that it has signed an exclusive licensing agreement and collaboration with Nurix Therapeutics for the development of blood cancer drug,?bexobrutideg. The deal is worth up to $2.3 Billion. OPEC and their 'allies' agreed to increase oil production?by 188,000??barrels a day in July, amid Middle East tensions which have?disrupted a major oil?shipping?route. Ingredion announced that it had agreed to purchase Tate & Lyle, a British company, for PS2.7 billion ($3.6 'billion) cash. The deal stipulated a price of?595 per share.
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Gold continues to fall on fears of an interest rate hike in the US
Gold prices sank on Monday due to a growing 'fear of an increase in U.S. interest rates? after a positive jobs report. Meanwhile, renewed hostilities across the Middle East drove oil prices up and increased inflation fears. Gold spot fell 1% at $4,287.66 an ounce as of 0544 GMT. Prices dropped about 3% Friday, reaching their lowest level since March 24. U.S. Gold futures for August delivered?were down by 1.2% to $4,311. The market's hawkishness is reflected in the Fed futures, said Kelvin Woong, senior analyst at OANDA. He added that higher Treasury yields are further pushing gold down. The yield on benchmark 10-year U.S. Treasury notes rose, after jumping to two-week highs in the previous session. This increased the opportunity cost for holding non-yielding gold. Israel claimed it had struck military targets in western and central Iran, despite the fact that U.S. president Donald Trump reportedly warned Israeli Prime Minister Benjamin Netanyahu not to launch any further attacks. Oil prices increased by more than $3 per barrel, causing inflation fears and interest rate increases to rise. Gold is often seen as a hedge to inflation. However, rising interest rates can weigh on this non-yielding precious metal. The U.S. Economy posted a strong third consecutive month of job gains in the month of May. This confirms that the labour market is gaining momentum after its stumble last year, and gives the central bank more room to maintain rates despite rising inflation caused by the Iran War. According to CME Group’s FedWatch tool, the markets are pricing in an increase by the Federal Reserve before year-end. There is a 72% probability of this happening by December. Cleveland Fed President Beth Hammack stated on Friday that the new jobs numbers showed the 'labour market is roughly balanced?and close to full employment. Meanwhile, continued high inflation may require the Fed raising rates soon to control it. Silver spot was down by 2.2% to $66.33, platinum fell 2.1% to 1,739.78 and palladium dropped 1.5% to 1,207.50. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
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Gold continues to fall on fears of an interest rate hike in the US
Gold prices extended their?losses Monday due to a growing?fear of an U.S. rate?hike?following a strong jobs?report, while renewed hostilities and inflation concerns in the Middle East drove oil prices up. By 0429 GMT, spot gold had fallen 0.2% to $4319.09 an ounce. Prices dropped by about 3% Friday, reaching their lowest level since March 24. U.S. Gold Futures for August Delivery?were down by 0.5% to $4,343.20. The market's hawkishness is reflected in the Fed futures, said Kelvin Woong, senior analyst at OANDA. He added that higher Treasury yields are further pushing gold down. The yield on benchmark 10-year U.S. Treasury notes rose, after soaring to a 2-week high in the previous session. This increased the opportunity cost for holding non-yielding gold. Israel claimed it had struck military targets in western and central Iran, despite the fact that U.S. president Donald Trump reportedly warned Israeli Prime Minister Benjamin Netanyahu not to launch any further attacks. Oil prices increased by more than $3 per barrel, causing inflation fears and interest rate increases to rise. Gold is often seen as a hedge to inflation. However, rising interest rates can weigh down on this non-yielding precious metal. The U.S. Economy posted a strong third consecutive month of job gains in the month of May. This confirms that the labour market is gaining momentum after its stumble last year, and gives the central bank more room to maintain rates despite rising inflation caused by the Iran War. According to CME Group’s FedWatch tool, the markets are pricing in an increase by the Federal Reserve before year-end. There is a 72% probability of this happening by December. Cleveland Fed President Beth Hammack stated on Friday that the new jobs figures show the labour market is roughly in balance and near full employment. However, the continued high inflation could require the Fed raise rates quickly to contain it. Silver spot was steady at $67.86 an ounce. Platinum lost 0.5% at $1,767.42 and palladium remained unchanged at $1.225.67. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
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London Copper nears 1-week Low on Continued Inflation Worries
London copper was near its one-week lows Monday due to a combination of 'weaker Chinese metal prices' and a growing expectation that the Federal Reserve will be pushed towards rate hikes by strong U.S. job data and higher oil costs. Benchmark 'three-month copper' on the London Metal Exchange rose 0.38% at $13,570.5 per metric ton as of 0331 GMT. LME copper fell to its lowest level since May 28 due to a rising dollar, and inflation fears. Industrial metals are more dependent on economic growth, so higher interest rates can dampen their prospects. Official data showed that the U.S. economy created 172,000 new jobs in May. This was more than double what analysts expected. The strong data was released less than two weeks before Kevin Warsh made his debut as the head of the U.S. Federal Reserve. According to CME's FedWatch, expectations of a rate hike in December have risen to 78%. The most traded copper contract at the Shanghai Futures Exchange fell 1.5%, to 104160 yuan (15,354.45) per ton. The trend was a sell-off in tech stocks across Asia as China and Hong Kong opened lower Monday, following their U.S. counterparts. The Yangshan Copper Premium The price of copper in China, which reflects the demand for imports, dropped to $64 a ton at the end of Friday's trading, its lowest level since April 30. China has historically been sensitive to high prices. Oil prices increased by?3.68% Monday, after Iran and Israel exchanged?fire Sunday and Monday. Aluminium, zinc, and lead all saw a slight increase. Nickel also increased by 0.4%. Tin, however, fell by 1.48%. On the SHFE, elsewhere, aluminum fell 0.74%. Zinc also dropped 0.74%. Lead dipped by 0.21%. Nickel gained 0.79%. Tin plunged 5.97%.
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The morning bid rally in Europe turns ugly
Rae Wee gives us a look at what the future holds for European and global markets. A sell-off in technology stocks spread across Asia on Monday, as investors slammed brakes on AI's red-hot rally. South Korea's KOSPI fell by more than 8% and triggered circuit breakers. The move?followed?that of the Wall Street shakeout last week, after an explosive U.S. employment report heightened expectations for Federal Reserve rate hikes - a bane to growth stocks. According to CME FedWatch, the markets now price in a greater than 70% chance of the Fed raising rates in December. This is up from just 45%?a week earlier. The nonfarm payrolls data released on Friday came only days after Broadcom reported a disappointing result last week. This sent its stock plummeting, and also dragged down the share prices of technology companies. When expectations are so high, a slight miss can be a major blow. Most analysts and investors have dismissed the latest sell-off as "a healthy correction" with concentration risks and leveraged position?amplifying market movements. However, it is still unclear how long this rout will continue. The dollar reached a new two-month high in other markets. This was due to the Fed's bets on a rate hike and the resilience of the U.S. economic system. Investors are on high alert as Tokyo is expected to continue buying yen in order to stem the currency's decline. On Monday, revised gross domestic product figures showed that Japan's economy had lost momentum from the previous quarter to the first three months of this year. This was due to a slowdown in capital expenditure. The data calendar is light for Monday, but the week ahead will be dominated by the SpaceX listing, U.S. Inflation data and a European Central Bank meeting. The war in the Middle East continues, with Israel claiming to have struck military targets on?western Iran and central Iran, despite the fact that U.S. president Donald Trump had reportedly instructed Israeli Prime Minister Benjamin Netanyahu not to launch any further attacks. Market developments on Monday that may have a significant impact Boeing will?release numbers for May deliveries and orders - Global airline CEOs gathering for an event in Rio de Janeiro France: Reopening the 3-month, 4-months, 6-months and 11-months government debt auctions - Germany: Reopening 5-month and 11 month government debt auctions
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Iran's envoy in Moscow said that the strait of Hormuz will be open, but there will be transit fees.
Iran's ambassador in Moscow was quoted on Monday as saying that the Strait of Hormuz would be open, but with new?conditions set by Iran? and?Oman?, including a?transit fee. The U.S. and Israeli war?on Iran 'has largely reduced oil flows through the strait. Before the conflict, one-fifth the world's crude oil passed through the strait. Recently, several tankers left the Gulf. However, oil and LNG flows remain severely constrained. In an interview published Monday, Ambassador Kazem Jalali said that the strait would be opened, but new conditions would be set by the Iranians and Omanis. We understand that Iran, Oman and other countries provide certain services related to the strait. He said that fees would be charged for?those services? without elaborating. Iran claims that a permanent agreement for peace should allow it the right to charge fees on ships transiting the Strait. These fees would depend on the type of vessel, the cargo, and the conditions. Donald Trump, the U.S. President, is strongly opposed to this position. The U.S. warned Oman in late May not to participate in any effort to impose a tax with Iran. Treasury Secretary Scott Bessent stated that Oman's ambassador had told him there was no plan to impose this toll. Israel announced on Monday that it had struck military targets in central and western Iran even though Trump reportedly asked Israeli Prime Minister Benjamin Netanyahu not to launch any more attacks. Japan, which imported?95%?of its oil needs from the Middle East prior to the war, has said that it didn't pay a fee when a crude oil tanker linked to Japan passed through the waterway last May.
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Gold continues to fall on fears of an interest rate hike in the US
Gold prices continued to fall 'on Monday, due to fears of a rate hike in the U.S. after a strong jobs report. Meanwhile, renewed hostilities across the Middle East drove oil prices up and increased inflation concerns. By 0302 GMT, spot gold had fallen 0.4% to $4313.11 an ounce. Prices dropped by about 3% Friday, reaching their lowest level since March 24. U.S. Gold Futures for August Delivery?were down by 0.7% to $4,336.30. The market's hawkishness is reflected in the Fed futures, said Kelvin Woong, senior analyst at OANDA. He added that higher Treasury yields are further pushing gold down. The yield on benchmark 10-year U.S. Treasury notes rose, after reaching a two-week high in the previous session. This increased the opportunity cost for holding non-yielding gold. Israel claimed that it had?hit military targets?in central and western Iran on Monday despite the fact that U.S. president Donald Trump reportedly warned Israeli Prime Minister Benjamin Netanyahu not to launch any further attacks. Oil prices increased by more than $3 per barrel, causing inflation fears and interest rate increases to rise. Gold is often seen as a hedge to inflation. However, rising interest rates can weigh on this non-yielding precious metal. The U.S. Economy posted a strong third consecutive month of job gains in the month of May. This confirms that the labour market is gaining momentum after its stumble last year, and gives the central bank more room to maintain rates despite rising inflation caused by the Iran War. According to CME Group’s FedWatch tool, the markets are pricing in an increase by the Federal Reserve before year-end. There is a 72% probability of this happening by December. Cleveland Fed President Beth Hammack stated on Friday that the new jobs figures show that the labour market is roughly in balance and near full employment. However, the continued high inflation could require the Fed raising rates soon to control it. Silver spot fell by 0.4%, to $67.56 an ounce. Platinum lost 0.5%, to $1,767.15, and palladium remained at $1,225.66. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
South American, EU negotiators race to close divisive trade offer
South America's. Mercosur trade bloc will satisfy in Uruguay on Thursday with the. outside possibility the group could utilize the occasion to reveal a. longdelayed trade deal with the European Union after. lastminute negotiations to get it over the line.
The trade offer, supported by most of the South American. nations and being pressed by Germany and Spain, has fulfilled strong. opposition from France due to fears about farming imports. to Europe that would strike the nation's effective farming sector.
Mediators from all sides came together in Brazil last. week, senior diplomatic and federal government sources told Reuters,. with strategies that delegations might travel to Montevideo if a deal. is clinched during virtual talks continuing today.
That could even possibly see European Commission. President Ursula von der Leyen travel to the Dec. 5-6 top in. Uruguay's capital, two European sources said, though the majority of. warned that absolutely nothing was likely to be signed. One source stated. the EU chief had scheduled an aircraft ticket just in case.
The last round of settlements ended with crucial. development, Mauricio Lyrio, secretary of financial affairs at the. Brazilian foreign ministry, said on Monday.
We're confident. Pending concerns are being submitted to the. leaders to be settled.
Bernd Lange, a German Social Democrat who chairs the. European Parliament's trade committee, on Tuesday said the. domestic scenario in the EU was the primary barrier to a deal and. the choice whether to travel today stayed uncertain.
They are talking about on the 13th floor (office of the. Commission president) taking the luggage and going to the. airport or not. It's a bit complicated, Lange stated. throughout an instruction.
In the works for over two decades, the trade offer has actually been. delayed by European concerns over farming competitors, while. Brazil, Argentina, Paraguay and Uruguay, all major producers of. soy, corn and beef, have actually criticized European protectionism.
Brazilian President Luiz Inacio Lula da Silva stated last. week, nevertheless, that the offer was being negotiated directly with. Von der Leyen as a brand-new round of in-person talks happened in. Brazil. He is positive a deal will be completed this year.
Others, nevertheless, voiced suspicion. If Ursula goes to. Montevideo it will be to reveal EU dedication to concluding the. offer, however it will not be signed, one European diplomat in. Brasilia stated.
Another diplomat in Uruguay said: I'm still 60-40 that it. fails to go anywhere.
OFFER OR NO DEAL?
Paris has actually attempted to persuade other EU members to form a. blocking minority. Poland just recently joined in opposition. However, France requires a minimum of three nations comprising. over 35% of the EU's population to jam up the deal.
Other EU countries such as Germany and Spain are leading a. coalition of 11 member states in favor. They want new trade. routes that would reduce reliance on China and insulate members. from U.S. President-elect Donald Trump's prepared trade tariffs.
An EU-Mercosur offer was at first struck in 2019, but never ever. ratified due to EU needs for dedications on deforestation and. environment modification. Some authorities feared the exact same could happen. once again now even if a final text is agreed.
While we will applaud if something is signed in Montevideo. this week, let's see when it in fact takes effect, stated. Ignacio Bartesaghi, from Uruguay's Catholic University.
A last and legally-binding version of the arrangement would. also require to be thoroughly reviewed and translated into some 2. dozen languages before it might be formally signed, Brazilian. mediator Lyrio said. That might take months still.
ARGENTINA'S MILEI MAY MAKE LAUNCHING
The Montevideo top is likewise expected to see Argentina's. libertarian President Javier Milei launching at a Mercosur occasion,. following very finely veiled threats to take out of the bloc unless. enabled to pursue bilateral trade deals outside it, consisting of. with the United States.
Like outgoing Uruguayan President Luis Lacalle Pou, Milei. wants the group to be more flexible. Uruguay under Lacalle Pou. had entered into formal negotiations on a free-trade arrangement. with China, a choice that his follower is not likely to pursue.
Some diplomats said the EU-Mercosur talks would affect. Milei's likely technique to the group.
If the EU-Mercosur deal goes ahead, Uruguayan diplomacy. advisor Bartesaghi stated it would pour cold water on any strategies. Milei has to break ties with the bloc because it would prove it. could attain something.
A deal reinforces the argument to keep the group together,. it buys time and calms Milei down, he stated, adding that if it. fell apart it could however enhance Milei's argument.
(source: Reuters)