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Gold reaches two-week highs as Fed outlook and Middle East conflict remain in focus
On Wednesday, gold rose to a two-week peak on technical purchases as investors assessed the escalating conflict in the Middle East and awaited next week's Federal Reserve meeting for hints on interest rate expectations. Gold spot rose 1.6%, to $4,139.64 an ounce, by 0307 GMT. It had already reached its highest level since 7 July earlier that day. U.S. Gold futures for August delivery rose 1.7% to $4144.20. Last week, the escalating tensions in Middle East pushed up oil prices and inflation concerns. This boosted expectations for interest rate hikes which led to gold's steepest weekly decline since early June. "Buyers are looking for a bargain after the recent pullback. Hopes of diplomatic progress between the U.S.A. and Iran also help to drive price movements," said Tim Waterer, chief analyst at KCM Trade. The Middle East conflict has disrupted shipping in two of the most important energy chokepoints. On Tuesday, three oil tankers transporting Saudi crude to Asia changed course after being threatened by the Houthis from Yemen. On Monday, a senior Iranian official said that Tehran received a proposal from mediators to implement a 10-day truce in an effort to salvage the June interim ceasefire agreement. Eskandar Mumeni, Iran's interior minister, visited Pakistan mediators and asked Islamabad for continued efforts. A poll has revealed that the Fed will maintain its 'key interest rate' for the remainder of 2026. However, a majority who responded to a separate question about the likelihood of a hike in this year have now described it as a "high" probability, a change from last month, when most thought the likelihood was "low". The opportunity cost of holding non-yielding gold increases as interest rates rise for longer periods. Spot silver, among other metals rose 1.9% to $59.87 an ounce. It had earlier reached its highest level since July 10. Palladium grew 3%, to $1320.75, while platinum rose 2.4%, to $1667.22. (Reporting and editing by Rashmi aich and Subhranshu sahu in Bengaluru, and Pablo Sinha from Bengaluru.
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Shares of Australia's Lynas tumble after cost overruns and revenue miss
Lynas Rare Earths, a company based in Australia, warned on Wednesday of an overrun cost at its expansion project for heavy rare earths in Malaysia. The warning came after the company reported fourth-quarter revenues below analyst expectations. Its shares fell to a five-month-low. The cost of the Malaysia project has increased from A$180 to A$294 millions, highlighting the difficulties Western producers face in producing these niche metals. Lynas stated that the next step in the project will be the production of gadolinium early in fiscal year 2028, followed by yttrium early in calendar year 2028, and finally lutetium. The company's shares?fell by as much as 9.1%, to A$14.510. This was their lowest level since February 6, and they were the top laggards on the benchmark S&P/ASX 200 index, which rose 0.1%. Lynas reported its highest quarterly revenue in four years. This was largely due to incentives that helped Western producers of rare Earths, which are metals used for renewable energy and defense. Due to geopolitics, and export restrictions, customers continue to be focused on securing "sustainable" supply chains outside China. The Visible Alpha consensus estimate was around 20% lower than the actual quarterly sales revenue. The lower-than-expected sales result has overshadowed the gains in pricing. The average selling price increased to A$98.2 a kilogram from A$60.2 a kilogram a year ago. Jefferies said that the company reported ore quality problems at its Mt Weld Project in Western Australia, which affected production. Total rare earth oxide production rose to 3,481 metric tons, from 3,212 metric tons, a year ago, but came in 10% below Visible Alpha's consensus estimate.
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Asian stocks continue to rise as US stocks rebound, with chipmakers leading the way
Investors took their cues from a recovery in U.S. stock markets and shrugged off the 'climbing' oil prices, as Houthi rebels threaten to open a new front in the escalating Middle East conflict. South Korea's Kospi index jumped over 6%, while MSCI's broadest Asia-Pacific share index outside Japan gained 1.2%. Japan's Nikkei gained 1.9% while S&P500 e-minis futures were down 0.1%. Brent crude climbed 0.6% to $91.55 per barrel on Tuesday, after two oil tankers transporting Saudi crude from the Middle East to Asia reversed their course in?Red Sea after being threatened by Iran-aligned Houthis of Yemen. Analysts at Westpac wrote in a report that equity markets ignored geopolitical risk and focused instead on the tech sector's?returns. After large losses in the past few days, semiconductor stocks have bounced back. Overnight, S&P 500 shares were up 0.9%. This ended a three-day losing run, and was driven by the rebound in semiconductor stocks after data showed that Korean semiconductor exports nearly tripled in the first weeks of July, and a gauge of Taiwanese orders for exports exceeded estimates. The market will be focused on the earnings of Alphabet. It is under 'heightened investor scrutiny due to the delayed launch?of a key model to its AI ambitions. And Tesla. It is widely expected that it will report its first quarter cash burn since over two years, as its spending for AI and robotics is on a steep rise. Pharmaceuticals are also a focus, after U.S. president Donald Trump announced that all generic drugs imported into the United States would carry a tariff rate of 0% from August 1 for two years. After this period the tariff will increase to 100% for one year and then 200%. The U.S. Dollar Index, which measures the strength of the greenback against six currencies, remained near its one-week high at 101.20. The dollar fell 0.1% against the yen to 163.06 yen after hitting a four-decades high on Tuesday. The jump in oil prices, which reached a five-week peak on Tuesday, had little impact on the bond and currency market ahead of next week's central bank meetings. According to the median forecast in a recent poll of economists, the U.S. Federal Reserve will keep its key rate constant for the remainder of 2026. However, they also said that the chances of a rate increase are high. FedWatch, an online tool from CME Group, showed that while a?hike is likely by December, one of more than?50 basis point by the end of the year is just a coin flip. The yield of the 10-year Treasury Bond was up 0.2 basis points at 4.628%. Gold rose 0.5% to $4,097.67. Bitcoin was up 0.3% to $66,611.73, and ether rose 0.7% to $1936.18. (Reporting and editing by Christopher Cushing; Gregor Stuart Hunter)
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McGeever: 'Stagflation' in the war on Iran is quietly increasing.
A dark cloud of Middle East conflict is once more looming above the financial markets. Geopolitical risks are back on the radar of investors, despite the fact that 'the shock of initial U.S. - Israeli strikes on Iran will not be repeated, barring a shocking twist such as a U.S. invasion on ground. The relief from falling oil and inflation pressures that followed the US-Iran truce struck in April has now evaporated. Investors, however flimsy the ceasefire may have been, took it as an opportunity to re-position themselves for economic growth and to re-expose to risk. Washington and Tehran have escalated their attacks, and now the conflict is spreading throughout the region. The prospects for either side to back down are limited. Escalation seems to be more likely right now than reconciliation. The economic risks are greater in some respects than when the war began five months ago. The oil inventories have been reduced significantly, and the refining capacity has been severely constrained. "Central banks, financial markets and the world economy are once again faced with the negative supply-shock scenario that they hoped to avoid when the US and Iran agreed on the interim agreement in mid-June. Barclays strategists said on Monday that "stagflationary impulses have returned." Wall Street has largely ignored this, focusing on bullish AI and corporate earning narratives. The S&P 500 remains within 2% from its June 2 all-time high, despite chip stocks continuing to be volatile. Credit markets are at their calmest in years, with spreads on high-yield U.S. bonds being the tightest they have been since the Global Financial Crisis. But some markets, such as Treasuries and the dollar, are starting to move. If the conflict continues to escalate, this dynamic could easily spillover into corporate bonds and stocks. RISK PREMIUM RISING Oil has been the most affected market so far. In the last few weeks, the world has been reminded that oil prices must include a "significant risk premium" as long as Iran can continue to block tanker traffic through the Strait of Hormuz. Brent and WTI futures prices have risen by around 30% over the past few weeks. This is a worrying sign for consumers and policymakers alike, as oil has now risen 25% on an annual basis. The average price at the US pump is also above $4 per gallon. This psychological threshold has been reached by gas-guzzling Americans in mid-summer, when "driving" season begins. All of this has reduced the likelihood of a Federal Reserve rate cut in this year. Last week, Fed officials began to sound a louder warning that interest rates may need to rise. Bonds are starting to feel the heat. In recent weeks, yields across the curve have increased as the so-called "term premium" has surged higher. This is essentially what investors want to compensate them for choosing longer-term Treasuries versus short-term debt. The term premium on the 10-year Treasury Note fell to 0.46% by the end of the month, its lowest level in more than a year. Since then, the term premium has risen back towards 0.70%. SUMMER HEAT Trump may be motivated to take any action necessary to end the conflict and bring fuel prices down in time for the November midterm elections. Trump may not be able to control a quick resolution of the conflict, as Iran is unwilling to compromise on its demands. The "glass half-full" perspective is that both parties choose peace, whatever it means, while they can. This could be to avoid bloodshed, or for financial and economic reasons. In this scenario the Strait of Hormuz slowly reopens. Energy markets will normalize and global inflationary forces will cool. Mark Zandi is the chief economist at Moody's Analytics. He is cautiously optimistic that this will happen in the next few weeks, maybe by the end August. The risks are enormous if not. According to our calculations, the oil inventories would be so low by Labor Day that the prices of crude oil will skyrocket and physical shortages will occur around the world. We expect that President Trump and the Iranian regime will reach an agreement by Labor Day, given the potential economic and political damage this could cause. Already, it's been a hot summer. The markets could soon become even more sticky. The opinions here are those expressed by Jamie McGeever who is a columnist at. 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.
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Oil prices slightly rise after US announces new strikes against Iran
Early trading on Wednesday saw oil prices rise as concerns about further supply disruptions increased after U.S. forces said they began attacking Iranian military targets for an 11th night in a row and Kuwait reported attacks by Iranian drones. Brent 'crude 'futures increased 0.55% or 50 cents to $91.51 as markets opened on the third day of trading. U.S. West Texas Intermediate Crude rose 0.36% or 30 cents to $84.64 during low volume trades. The oil price settled at its highest level in five weeks on Tuesday, after U.S. forces struck targets in western and southern Iran. Iran also attacked U.S. installations in Kuwait, Jordan, and Bahrain. U.S. forces said they began their latest attacks on Iran either late Tuesday or early Wednesday morning in Iran. The U.S. attack came just a few hours after the Kuwaiti military said that its air defences intercepted?Iranian swarms of drones on Wednesday. Constant?trading? of strikes has raised concerns about further disruptions in global energy supplies. Yemen's Iran-aligned Houthis have opened a new front to the Iran War by threatening to attack vessels carrying Saudi Oil in the Bab el-Mandeb Strait, and announcing a maritime blockade of Saudi Arabia. Bab el-Mandeb, the waterway that runs through the southern entrance of the Red Sea to the Red Sea, has become a more important route for Saudi crude 'exports' as the traffic in the Strait of Hormuz is down sharply since a ceasefire agreement between the United States of America and Iran fell apart earlier this month. Pete Hegseth said that the U.S. war against Iran had cost the country $37.5 billion so far. This is an increase of almost $8 billion from the previous estimate. Market sources reported that data from the American Petroleum Institute showed that U.S. crude oil and distillate inventories increased last week while gasoline stocks fell. The data is released ahead of the official figures that will be released by the U.S. Energy Information Administration Wednesday. (Reporting and editing by Lincoln Feast in New York, Siddharth Cavale in New York.)
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New Zealand's climate goals are at risk because emissions progress is stalling, a report states
The 'Climate Change Commission' said on Wednesday that New Zealand greenhouse gas emissions have fallen too slowly to meet national climate goals. Progress has stalled in 2024, and the key goals for the coming decade are now at risk. The independent advisory body, in its annual report on emissions monitoring, said that the country would have to double the rate of emission reductions over the next several years to "get back on track". "This is a warning sign," said Jo?Hendy, the commission's chief executive. "Emissions have been falling, but the progress has stalled by 2024. Current policy settings do not deliver at the required pace." The report stated that government decisions in the next 12 to 24 months will be crucial. The report found that New Zealand's second, and third,?emissions budgets are at risk. Meanwhile the 2030 biogenic methane target -- which is largely produced by livestock-- will not be met. New Zealand has set up a budget for emissions as part of a plan to achieve net zero long-lasting greenhouse gas?emissions before 2050. It also plans to reduce methane emissions from waste and agriculture. The commission stated that a faster adoption of existing low-emissions technology could lower costs for businesses and households, as well as reduce their exposure to volatile fossil fuel price fluctuations. The commission cited rooftop solar, industrial heat pumps, and batteries as technologies that have already become cheaper over time. Hendy stated that barriers like upfront costs are slowing down adoption, even when long-term savings are available. The commission called on the government to use targeted financing, clearer investment signal and better information in order to assist households and businesses to switch from fossil fuels. (Reporting and editing by Chris Reese; Lucy Craymer, Lucy Craymer)
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Oil reaches 5-week high; stocks jump with chipmakers
The Nasdaq, chipmaker stocks and oil prices all rose on Tuesday amid rising tensions over the Iran conflict. The Japanese yen fell 0.41% against the greenback, to 163.14 dollars. This was the first time the yen has breached the 163 dollar mark since December 1986. Traders were bracing for a possible intervention by the Japanese government. Two oil tankers transporting Saudi crude from the Middle East to Asia have reversed their course in Red Sea following threats by Yemen's Iran aligned Houthis. Brent futures gained $1.79 or 2.0% to settle at $91.01 per barrel. U.S. West Texas intermediate crude added $1.68 or 2.0% to settle at $84.91. Brent closed at its highest level since June 10 and WTI reached its highest since June 11. Bruce Zaro is the managing director of Granite Wealth Management, a Plymouth, Massachusetts-based firm. He said that investors may not think the war will end soon, but the impact the conflict has had on oil prices could be overstated. Investors will also be focusing on the earnings of corporations this week. Alphabet, Intel and other companies are still expected to release their results. Market watchers want to know if the AI trade can continue to grow, especially with the high profit expectations for second quarter. Investors are now looking at earnings in order to determine if the market's surge in Q2 was justified, said Adam Sarhan, CEO of 50 Park Investments in New York. He noted that tech stocks, in particular semiconductors, had consolidated, and are now bouncing back off the support. A semiconductor index ended 5.2% higher. The index closed Friday at a level that was more than 20 percent below the record high set in late June. The Dow Jones Industrial Average increased 385.38, or 0.74 percent, to 52224.64. The S&P 500 gained 65.92, or 0.89 percent, to 7,509.20. And the Nasdaq Composite grew 329.13, or 1.29 percent, to 25,837.21. European stocks grew, led by technology and mining shares. The pan-European STOXX 600 Index was up by 0.56%. MSCI's index of global stocks rose 11.58 points or 1.05% to 1,117.08. The benchmark 10-year U.S. Treasury rate reached a new two-month high, as traders increased their bets on the Federal Reserve raising interest rates in 2018. The yield on the benchmark 10-year U.S. notes rose 3.41 basis points, to 4.632%. It reached 4.640% at its highest level since May 20. The Fed kept interest rates unchanged at its June meeting. However, policymakers indicated that they expect to increase borrowing costs later in the year due to growing concerns about inflation remaining above the central banks' 2% target. The trade was also in focus. The Canadian dollar fell 0.27% against the US dollar to C$1.411 after U.S. president Donald Trump announced plans on Monday for 50% tariffs for a range of Canadian imports in response to what he called discriminatory treatment for American-made dairy products, cars and alcohol. Mark Carney, the Canadian Prime Minister, said that Trump had agreed to intensify negotiations on trade after his?speaking Tuesday. However he warned he will consider all options if tariffs Trump threatened Monday are implemented. The dollar index, which measures greenbacks against a basket currencies, rose by 0.17% at 101.16. However, the euro fell by 0.11% to $1.1402. The dollar was set to record its longest daily gain streak since mid-May.
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Vale reports largest iron ore production in the second quarter since 2018.
The Brazilian miner Vale announced?on?Tuesday its highest second-quarter production figure since 2018. Production?of steelmaking _material increased?0.8% compared to a year ago and came above analysts' expectations. Vale, a world-leading iron ore producer, reported an iron ore production of 84.3 millions metric tons in the April-June period, which is above the Visible Alpha consensus estimate of 82.2million tons. The miner said iron ore production was supported in the period by a'record-breaking second quarter performance in its S11D Complex, and added volumes from Capanema, and 'VGR1 Projects, located all in Brazil. Vale has maintained its projections of producing between 335 and 345 millions tons of iron ore in this year. Its other estimates for yearly production have also remained unchanged. ?Vale reported that iron ore sales in the third quarter included fines, pellets, and run-of mine. This represents a 3.1% increase due to higher production and stock sale. According to a?estimate compiled by Visible Alpha, analysts expected 78.2 millions tons. According to Vale’s report on output and sales, the average realized price of iron ore fines increased 11.6% from last year to $95 per ton. However, it fell by 0.8% in comparison to?the first-quarter due to "negative impact" of pricing mechanisms. Vale will?release its second-quarter financial results? on July 30. Reporting by Andre Romani from Sao Paulo, and Marta Nogueira from Rio de Janeiro. Editing by Chris Reese, Natalia Siniawski and Natalia Siniawski
Chile rains leave 13 dead, 7 missing, authorities say
Authorities?reported on Tuesday that a heavy rainstorm?hit most of Chile, leaving?13 dead and seven people missing. The?government?said they would seek sanctions against electricity distributors if there were prolonged power outages.
Storms hit the central part of the country and then moved southwards, causing flooding, road closures, and damage to homes.
Alicia Cebrian is the head of Chile’s Senapred 'emergency? office. She said that the rain over the last few days has weakened the waterways, streams and riverbanks. There?is still a danger of rising levels of water in some of these areas.
Cebrian said that, in addition, to the deaths, 2281 people were displaced, and 81 homes had been destroyed. 2,761 houses also suffered major damage. 87,000 people are still without electricity.
Claudio Alvarado said that the government intends to take disciplinary action against companies involved in electricity distribution for their delays in restoring services.
In four different regions, lessons were suspended in a number of schools.
The weather has forced some operations to temporarily reduce their activity in the region. Reporting by Fabian Cambero and Editing by Thomas Derpinghaus
(source: Reuters)