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Gold prices hold steady as markets monitor inflation data
Gold was steady on Wednesday, ahead of an important U.S. data on inflation that could be used to gauge the Federal Reserve’s interest rate trajectory amid fears about economic slowdown and trade tensions. Attention was also focused on a possible ceasefire agreement in Ukraine. As of 0300 GMT spot gold was unchanged at $2,916.69 per ounce. U.S. Gold futures rose 0.1% to $2922.30. Tim Waterer, KCM Trade's chief market analyst, said that gold is in "consolidation mode" ahead of the next set of U.S. Inflation data. Investors are awaiting the Consumer Price Index (CPI), which is due to be released later today, in order to determine the Fed's future interest rate stance. Gold may lose its appeal if rising prices force the Fed's interest rate to remain higher. It is not a yielding asset. The tariffs imposed by U.S. president Donald Trump are expected to increase inflation and economic unrest, which is why gold reached a record-high of $2,956.15 in February. "I expect that gold will remain a preferred asset as long as investors are worried about tariff wars or a slowdown in growth. Waterer stated that the gold bias remains positive due to ongoing tariff dramas. Trump defended his policies regarding tariffs on Tuesday, as he met with the CEOs of America’s largest companies. Many of these companies have seen their market values drop in recent weeks as fears about inflation and recession have soured investor and consumer sentiment. Trump reversed his course on Tuesday after hours of announcing higher tariffs. He had pledged to double the tariffs on Canadian steel and aluminum to 50%. The U.S. has agreed to resume its military assistance and intelligence sharing program with Ukraine, after Kyiv announced that it would accept the U.S. offer of a 30-day truce in Ukraine's conflict with Russia. Spot silver fell 0.5%, to $32.76 per ounce. Platinum rose 0.4%, to $978.60. Palladium dropped 0.6%, to $940.53.
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Shanghai copper prices rise on signs of improved China demand
Shanghai copper gained more than 1% in value on Wednesday. This was a result of signs that the demand for metals in China, its largest consumer, is improving. As of 0234 GMT, the most active copper contract at the Shanghai Futures Exchange had risen 1.25% to 78,760 Yuan ($10,901.34) per metric tonne. ANZ analysts stated in a report that the fundamentals have improved, and the ANZ Downstream Copper Demand Indicator shows positive growth in particular in grid infrastructure, electric vehicles, and other areas. Manufacturers, supported by recent stimuli, are ramping production up... inventories of copper cathode in Shanghai and Guangdong have extended their declines since a peak, due to fewer imported in recent months. First Futures analysts said that the refined copper output will probably fall in China in April, as more smelters begin equipment maintenance. Those who suffer severe losses will also lower their capacity utilization rates. In a report published on Tuesday by the state-backed Antaike, the copper cathode production among the smelters that were surveyed increased by 5.28% from January to February to 1.9 millions tons. The research house also predicted that March's output would increase by 4.32% compared to the previous year to 969,000 tonnes. China consumes around half of the global copper supply annually. Analysts at ANZ said that fears of a trade war around the world limited its price increases. SHFE aluminium increased by nearly 1%, to 20,960 Yuan per ton. Zinc rose 0.95%, to 23,935 Yuan. Tin advanced 0.57%, to 263,990 Yuan. Lead was little changed, at 17,455 Yan, while Nickel eased 0.26%, to 132270 Yan. The price of three-month copper at the London Metal Exchange increased by 0.03% to $9,682 per ton. LME aluminium edged higher by 0.22% to $2.710 per ton. Lead added 0.19% at $2.059 while tin edged lower by 0.05% to 33,145. Zinc lost 0.02% at $2.919.5, and nickel dropped 0.15% at $16,455.
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Canadian Energy Minister: Ottawa will respond to US tariffs
Canadian Energy Minister Jonathan Wilkinson said on CNN Tuesday that Canada will respond soon to any tariffs imposed by the U.S., while adding Canada did not want to escalate or cause trade tensions between Canada and the U.S. In response to White House remarks that Canada is viewed by Washington as a rival, the energy minister stated Canada does not want to be a competitor. The White House announced on Tuesday that the 25% tariffs previously planned on steel and aluminium products from Canada and other countries, as well as the United States' northern neighbour, would go into effect on Wednesday. In a series of rapid-fire actions that sent financial markets into chaos, Donald Trump reversed his course on Tuesday after hours of announcing higher tariffs. This switch was made after a Canadian official backed down his own plans to charge 25% more for electricity. The back and forth between the U.S., Canada and other countries further shook financial markets that were already shaky due to Trump's tariff focus. The Canadian energy minister said late Tuesday that Canada was hoping for a positive result and would be watching to see if tariffs were implemented. He said that the tariffs might not be implemented because of the lack of predictability in the past. Reporting by Kanishka in Washington, Editing by Christopher Cushing & Raju Gopalakrishnan
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Euro surgrise on Ukraine ceasefire proposals, tariffs squeeze stock
The euro reached a five-month-high on Wednesday, as Ukraine was ready to accept a ceasefire lasting a full month. Meanwhile, stocks were swayed by the back and forth of U.S. tariffs plans and concerns about an economic slowdown in the U.S. European equity futures jumped by 0.8%, and FTSE Futures climbed 0.3%. This was after the U.S. announced it would resume military aid to Ukraine and share intelligence with Ukraine following Kyiv's acceptance of a U.S. proposed ceasefire. Russia has not yet responded. In New York, the euro reached its highest level since October at $1.0947. It remained steady at $1.0913 during the Asia session. Overnight, the Russian rouble reached a seven-month peak. The broadest MSCI index of Asia-Pacific stocks outside Japan rose 0.2%. Markets in Hong Kong, China and Japan were all relatively stable. Japan's Nikkei held its ground after falling to a nearly six-month-low a day before. Overnight, the S&P 500 was on the verge of a 10% drop from its record-breaking closing high in February. It ended a volatile session around 0.8% lower. After Ontario suspended its plans to impose a surcharge for exported electricity, President Donald Trump threatened and then backtracked from a 50% increase in steel and aluminum tariffs against Canada. Dollar has fallen, Treasuries are up and stocks have been selling at their highest level in months. Traders worry that tariffs and policy uncertainties will harm U.S. economic growth. Catriona Burst, portfolio manager for a global fund with Wilson Asset Management Australia said: "He is clearly trying to rebalance back the economy in favor of America." She said, "During this initial phase, when he is going hard, the environment in which you are operating is very dynamic." The uncertainty created by the tariffs, and the back and forth on them, is preventing decision-making... the impact that this has on the short-term pocket of the U.S. as well as the growth in that country will be very interesting." Travel stocks were hit after Delta Air Lines slashed its profit forecast by half, and rivals United Airlines and American Airlines warned about deteriorating results and falling government bookings. Investors worried about the economy punished retailers with disappointing financial results. Dick's Sporting Goods shares plunged 5.7% after a gloomy outlook, and Kohl's Corp's shares fell 24% following a decline in sales. Tariffs on steel and aluminum will be implemented later today. The U.S. data on inflation for February will also be released, but it may still be too early to see the impact of tariffs. The central bank meeting of Canada will be closely monitored to see how monetary policymakers in the frontline of Trump's Trade War are thinking. The market has priced in a seventh consecutive rate reduction, which was only a slight possibility two weeks ago. Overnight, the Canadian dollar fell to a low of C$1.443 before rising back up to C$1.443. U.S. stock futures were largely unchanged. The yen slipped from its five-month high, trading at around 148 dollars. The Australian dollar, which is sensitive to risk, was held at just below 63 U.S. Cents. Brent crude futures traded just under $70.00 a barrel. (Editing by Shri Navaratnam).
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Oil prices increase on weak dollar but worries about tariffs impact gains
The oil prices rose early on Wednesday due to a weaker US dollar. However, mounting concerns about a U.S. slowdown, and the impact tariffs will have on global economic growth, capped gains. Brent futures rose by 27 cents or 0.39% to $69.83 a bar at 0110 GMT. U.S. West Texas intermediate crude futures rose 29 cents or 0.44% to $66.54 a bar. Daniel Hynes said that despite the weakening economy, oil remained in a positive market position. This is a good sign that the demand for crude oil in the near term remains strong. Oil prices rose as the dollar index fell by 0.5% on Tuesday to new 2025 lows, making crude oil cheaper for buyers who hold other currencies. Investors were rattled by increased tariffs on imported goods and a deteriorating consumer mood. Trump's protectionist policy has shaken the global markets. He has delayed and then imposed tariffs on Canada, Mexico, and other major oil suppliers, as well as raising duties on China. This has led to retaliatory actions. Trump stated that a "period transition" is likely, but he did not rule out the possibility of a U.S. economic recession. The U.S. Energy Information Administration reported on Tuesday that the U.S. crude production will set a record in supply this year, with an average of 13.61 million barrels a day. Investors will be looking for clues about the future of interest rates in the U.S. Inflation data, due Wednesday. Also, they closely monitor OPEC+'s plans. The producer group announced plans to increase production in April. Market sources cited American Petroleum Institute data on Tuesday to report that crude oil stocks in the U.S. increased by 4.2 millions barrels during the week ending March 7. Investors are now awaiting government data due Wednesday on U.S. stocks to provide further trading signals. (Reporting and editing by Himani Sarkar in New York, Nicole Jao)
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Australia shares are heading for correction as US tariff tensions rise
Australian shares continued to fall on Wednesday, briefly entering correction territory. Investor appetite was dampened by local media reports that the White House confirmed Australia would not be exempted from U.S. tariffs on steel and aluminum. S&P/ASX 200 Index fell by 1.2% at 0001 GMT to 7,793.6. The benchmark index fell up to 1.6% in the morning session. It is now down around 10% from its February 14 high. This is known as a "market correction". Local media reported on the fact that Australia would not be exempted from U.S. tariffs on steel and aluminum that President Donald Trump will impose against other countries. They cited White House spokesperson KarolineLeavitt. The reports stated that Trump had agreed to exempt Australia from tariffs in February, but decided not to do so. This was due in part because of the U.S. surplus trade with Australia. The U.S. stock market continued its biggest overnight sell-off in many months after Trump announced he would increase tariffs on Canadian steel and aluminum products by 50%. These tariffs will take effect in a few hours. Real estate stocks in Sydney fell by as much as 1.5 percent to their lowest level since the second of July 2024. The heavyweight financials fell for the seventh consecutive session, dropping as much as 1,7% and reaching their lowest level since Oct 7, 2024. The 'Big Four" lenders fell between 1.1% to 1.9%. The index fell 0.7%, while the miners' price dropped by 0.7%. BHP Group, the world's largest listed mining company, fell 1.1%. Rio Tinto, Fortescue and Fortescue, on the other hand, both fell by 2.2% and 1.6%. Gold stocks rose 0.8%, bucking the trend. The gold price increased on demand for safe havens amid concerns about an economic slowdown due to tariff wars and a weaker US dollar. The benchmark S&P/NZX50 index for New Zealand fell by 0.9%, to 12,305.19.
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Australia is 'disappointed’ after Trump ruled out exemptions from steel tariffs
Australia said on Wednesday that it was "really disappointed" U.S. president Donald Trump didn't give it exemptions from steel and aluminum tariffs. But it vowed to keep lobbying for a reprieve. Trump stated in February that he would give "great consideration" to exempting Australia, based on the U.S. trade surplus with Australia. This was after a telephone call with Australian Prime Minster Anthony Albanese. The White House announced on Tuesday that all steel and aluminum products imported into the U.S., from any country, would be subject to a 25% tariff on Wednesday. There were no exemptions or exceptions. Richard Marles, the Australian Deputy Premier, said that his government will continue to push for an exception from Trump's administration. Marles, a radio host at 2GB, said: "Well obviously this is a very disappointing news." Tariffs are a form of self-harm. We will be able find other markets for steel and aluminium, and we are diversifying these markets." During Trump's first term as president, he exempted Australia of U.S. Tariffs on Steel and Aluminium. The last time we tried, it took nine months for the Trump administration to grant us an exemption on steel and aluminum. Marles stated that we will continue to press the issue. Trump threatened on Tuesday to increase tariffs by 50% for Canada, but changed his mind just hours later, causing the financial markets to panic. Australia is an important U.S. ally and security partner in the Indo-Pacific region. However, it exports very little steel to the U.S.
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CERAWEEK: Agarwal, a billionaire oil industry investor, may expand Cairn production by investing in US oil service companies
Cairn India, India's largest private oil and gas company, said Tuesday that it could invest in U.S. engineering and service companies as part a plan of $5 billion to increase output by five times in the next few years. Anil Agarwal, a billionaire, said in an interview that he wanted to invest $5 billion to develop his project and reach 500,000 barrels of oil per day. Cairn Limited, a part of Vedanta, produces today 100,000 bpd. The company plans to drill several deepwater exploratory wells in the next year. Agarwal said, during a trip to Houston, where he attended CERAWeek, that Cairn is looking to buy five or six drilling rigs and work with seven or eight technical partners to explore and develop the offshore project. Agarwal stated, "We would like to have at least 20 drilling rigs working in our field." He said, "I can invest into the engineering company and the rig company because it will help me explore India better." I'd love to see American companies come together and work on this project. (Reporting and editing by Simon Webb, David Gregorio, and Ron Bousso)
The European renewables market is driving the battery storage boom
The battery storage capacity in Europe is expected to increase five-fold between now and 2030. This will bring increased returns for energy companies, traders, and project developers, as new projects become cheaper.
The use of wind and solar energy has increased to around a third in Europe's mix. However, because they are intermittent sources, there is also a demand for backup batteries.
Battery technology has also made great strides. Smaller battery packs can store more power and lower costs.
According to estimates from the industry, even the anticipated leap in capacity will not be enough to meet national demand and balance energy grids.
Aurora Energy Research predicts that capacity will rise to more than 50 gigawatts by 2030, which represents investments worth approximately 80 billion euros (82.80 billion dollars).
The European Association for Storage of Energy estimates that 200 GW of storage will be required by 2030.
According to Aurora Energy Research, a total of 10.8 GW in Europe's battery capacity has already been added by 2024.
Some investors have been disappointed by the renewable energy industry in general. In Europe, wind turbine manufacturers have seen their profits eroded by technical issues, supply-chain problems, rising costs, and planning disputes.
After the oil price recovery, following a slump in demand caused by pandemic locksdowns, energy majors are also under pressure from shareholders to focus on fossil fuels.
Battery storage is a great way to earn money.
Project operators can secure what is known as ancillary contract from grid operators who pay them for helping to balance the system. For example, capacity market contracts pay generators and battery owners for being available during times of high demand.
Price volatility on the wholesale energy market offers traders the opportunity to make a lot of money.
When the amount of wind or solar energy produced exceeds the demand on the grid, the electricity price can go negative. Battery operators are paid to store power in case it is needed.
The traders can make money if they can charge their battery at a low price because the prices are negative, and then sell it at a higher price at sunset at six o'clock. This is what Roberto Jimenez said, the executive director of BW ESS. BW Group, whose global infrastructure company includes BW ESS.
LSEG data shows that the number of hours with a price below zero or at a negative value in Britain's electricity day-ahead market reached a record 176 in 2024. It predicts a nearly four-fold rise to 792 hours by 2026.
Similarities are seen across Europe. LSEG predicts that the number of German negative hour will increase from less than 500 in 2024 to over 900 in 2026.
MAJOR PROFITS
BW ESS and oil giant Shell have an agreement for the 331 MW capacity of a battery project in Britain. Shell will pay a fee of fixed amount to BW ESS for the battery to be available to Shell when it sees a business opportunity.
TotalEnergies, another major, bought German battery storage firm Kyon Energy in the last year. The first project, a 200-megawatt-hour project, will begin operating in 2026 with an investment of 75 million euros.
TotalEnergies spokesperson said that the German market is interconnected with 11 other countries. This provides ample opportunity for trans-border electricity trade.
In order to attract investment, new markets will also offer initial revenues that are contracted. Italy's grid operator Terna announced that it will conduct a first auction for battery storage capacity before the end of 2025. The projects are expected to become operational by 2028.
Statkraft is Europe's biggest renewable generator. It has a portfolio of large batteries, including projects in Britain and Ireland. It has said that it will bid in the Italian auction.
RETURNS ARE RISING, COSTS ARE DRIVING DOWN
RBC analyst Joseph Pepper stated that the growing revenue from contracts and trade has pushed UK batteries revenues to their highest levels in two years. They are now at approximately 90,000 pounds ($112,617) each MW per annum.
The price of battery storage has also decreased due to the oversupply of batteries from China, and the shrinking size of the battery packs as a result of technological improvements.
Pepper said that the cost to build a project in Britain had fallen by around 30% over two years, and is now just a little above 500,000 pounds for a 2-hour project.
He said that the result of a British project will be returns in the range of 12%.
The main driver (to improve returns )...) is the large decrease and reduction of CAPEX for Batteries, said Tom Vernon. Statera Energy has over 1 GW in pipeline projects that are in operation or under construction in Britain.
This trend is likely to continue. Goldman Sachs analysts said that average battery prices could drop to $80/kWh in 2026 from $153 per Kilowatt-hour in 2022. ($1 = 0.9662 euros) ($1 = 0.7992 pounds)
(source: Reuters)