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Gold on course for its worst week since November as trade tensions cool
The gold price dropped by more than 2% Friday, and was set to have its worst week since November as a result of increased risk appetite due to the U.S. China trade agreement. Gold spot fell by 1.7%, to $3.185.87 per ounce at 1007 ET (14.07 GMT), and has fallen 4.2% this week. Prices reached a new record of $3,500.05 last month amid increased tariff tensions. U.S. Gold Futures fell 1.2% to $3188.70. The thawing out of the U.S. - China trade war has rekindled risk appetite in the broader market. This shift has caused profit-taking by futures traders in the gold market and triggered a wave of liquidation lasting a week, according to Jim Wycoff. Washington and Beijing announced earlier this week a 90-day break while they worked out the details of ending their titt-for-tat trading war. The U.S. announced that it would reduce "de minimis fees" on smaller shipments coming from China. After a period of uncertainty, Wall Street's main three indexes have opened higher this Friday. Bullion is a hedge for economic and geopolitical instability. Bullion tends to perform well in an environment with low interest rates. In the United States, the recent data on inflation, coupled with economic data that was weaker than expected, has fueled bets for more Federal Reserve rate reductions this year. The markets expect that the U.S. Central bank will implement two rate reductions, starting in September. Spot silver fell 1.3%, to $32.27 per ounce. It also dropped over 1% in the past week. Wycoff said, "It appears to me that silver's price could rise if the bull market in gold continues." Palladium slipped 0.3% and platinum 0.6%, respectively. Both metals are also expected to decline by a similar amount each week. (Reporting by Sarah Qureshi in Bengaluru; Editing by Shailesh Kuber)
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Andy Home: Copper's US tariff is crushed by a wave of imports
The threat of a tariff by U.S. president Donald Trump on imports of copper has caused a massive relocation of metals, flooding the U.S. and draining other markets. Since the Trump administration announced a Section 232 investigation in February into U.S. Imports of the Red Metal, traders have been rushing metal into the country in order to lock in a possible tariff windfall. The physical reaction has been so strong that it has caused futures arbitrage to collapse between the CME Contract and the London Metal Exchange Price (LME). WAITING FOR TRUMP The copper market is betting on a 25% U.S. import tariff, which will match the existing rates for steel and aluminum. Tariff trade is evident in the premium that the CME contract for U.S. products cleared by customs commands over the LME international price. Three weeks ago, the cash premium was around $1,600 per ton. This is 17% higher than the LME price. Since then, it has fallen to just $600 per metric ton or 6% of London's price. The timing of tariffs is still uncertain, but it's not like anyone hasn't expected them. Section 232 investigations have a 270 day deadline. White House officials, however, promised a resolution "in Trump time" - whatever that may mean. The price differential between the U.S. & Europe is being narrowed by the volume of metals arriving in the U.S. METAL ON MOVE Morgan Stanley analysts report that U.S. imports have increased to 40,000 tonnes per week from 14,000 tonnes per week in late March. Metals have been flooding into CME's warehouses for the past two years, with most of them arriving in New Orleans. CME's copper stock has increased by 81% from the beginning of the year, and now stands at a record high of 168.563 short tons. CME spreads are in contango unlike those of the LME where the benchmark cash to three-months is spread. As stocks decline, the backwardation has been shifted to $30 per ton. LME copper inventories have fallen to an all-time low of 179.375 tons. 40% of the remaining inventory is awaiting physical loading. The raid on LME stock has focused on copper, which can be delivered in exchange for CME contracts or traded with consumers to get CME brands. The LME stock is now largely made up of Russian and Chinese brands. At the end of April, they accounted for 98% the 129.200 tons of warranted inventories. The U.S. trade war has reached China. Shanghai Futures Exchange inventories have fallen from their Lunar New Year peak of 268,337 tones to 108.142 tons. China's refined copper imports fell by 5% year-overyear and 20% quarter-overquarter in the period January-March as the metal was diverted to America. SCRAP FLOWS SLOW The impact of the U.S. tariff on copper scrap has compounded the regional imbalances. China was the primary destination of U.S. copper shipments, importing 441,000 tons in 2013. The trade has halted due to the uncertainty surrounding both a tariff on copper and the larger reciprocal tariff situation. The U.S. has a growing mountain of refined steel, and a surplus of copper that is recyclable. If the trade dispute between the two parties can be de-escalated, then it is likely that some of these materials will become available after 90 days. Picture Distorted The global copper exchange inventory has not changed much in the past year. Stocks are hovering at around 500,000 tons, down only 1,700 tonnes from the beginning of January. There has been a massive redistribution from around the world of metals to the U.S. This process will continue until the Trump Administration decides whether or not to impose an import tariff on copper and what level. The CME-LME arbitration should theoretically stabilize at the announced rate of tariff, but it's clear that this won't happen overnight due to the increasing volume of inventory on the U.S. side of the trade. The higher the U.S. Copper Mountain will grow the longer the White House takes to decide. These are the opinions of a columnist who writes for.
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Von der Leyen: EU preparing new sanctions to increase pressure against Russia
Ursula von der Leyen, President of the EU Commission, said that the European Union was working on a package of new sanctions to increase pressure against Russian President Vladimir Putin regarding his war in Ukraine. Under pressure from U.S. president Donald Trump, the European Political Community Summit (which includes non-EU nations) convened in Tirana, Albania's capital, while Russian and Ukrainian negotiators gathered in Istanbul to hold their first direct talks on peace in over three years. The EU has adopted 17 sanctions against Russia, the latest this week. Diplomats report that it is becoming increasingly difficult to achieve the required unanimity within the 27 member states of the EU to pass new measures. Von der Leyen, speaking of Putin, said that we needed to put more pressure on him. We are currently working on a new set of sanctions. The main elements of this package include, for example: a prohibition on Nord Stream, further listing of the shadow fleet, a lower cap on crude oil prices and more sanctions against the Russian financial sector. Gazprom, the state-owned Russian company, built Nord Stream 1 & Nord Stream 2 consisting of each two pipes to transport natural gas under the Baltic Sea to Germany. In 2022, they were damaged by a series blasts. Officials and diplomats said that to be successful, the new major sanctions threatened by European leaders in the last few days will need U.S. backing. Putin suggested direct talks with Ukraine on Sunday in Turkey. However, he rejected the challenge of Ukrainian President Volodymyr Zelenskiy, who wanted to meet personally. Instead, he sent a team consisting of middle-ranking officials. Zelenskiy, speaking to other European leaders at the Tirana summit, said that Ukraine's top priority during the Istanbul talks is to achieve an unconditional ceasefire in order to establish a foundation for future negotiations on a peace agreement. NATO Secretary General Mark Rutte stated that Putin "made an error by sending a delegation of low level". Keir starmer, British Prime Minister, said that "what we saw yesterday and over night is yet another evidence that Putin does not care about peace" as he arrived to the Tirana Summit. Starmer stated that Ukraine's allies should act as one, a sentiment shared by many leaders present at the summit. Starmer stated that "we'll work on that again today in order to make it clear that a ceasefire must occur, but that if there is no ceasefire then we will all act together to impose sanctions." Friedrich Merz, the new German chancellor, has said that Europe needs to increase its defense capabilities and that it must work with the United States in order to put an end to the war in Ukraine. Merz stated, "We must do everything we can to keep Americans on our side." We cannot replace or substitute what the Americans do for us in our continent. Reporting by Andrew Gray in Tirana and Fatos bytyci Additional reporting by Benoit van Overstraeten Ingrid Melander Bart Meijer William James and Julia Payne Editing and writing by Alex Richardson, Frances Kerry and Frances Kerry
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Why Trump's Gulf trillions aren't as big as the headlines
Donald Trump, the U.S. president, concluded his Gulf tour Friday after securing what the White House claims is more than $2 trillion in combined deals for the U.S. It is not clear how that number was arrived at. A total of $700 billion is calculated by adding up all the deals that were announced. Deal inflation is common on major visits, even for a president who prides himself in being an expert at making deals. The trip included large orders for Boeing planes, contracts to purchase U.S. defense equipment, agreements on data and technology, and other contracts. Experts in finance and diplomacy say that the headline numbers have been exaggerated to show the extent of the cooperation between the two sides. According to an analysis, many of the agreements signed by Trump during his Gulf tour were non-binding memos of understanding. According to 'calculations, the total value of defence sales with Saudi Arabia and Qatar is close to $730 Billion. It is impossible to independently verify if additional agreements have been signed without public disclosure. Justin Alexander, Director at Khalij Economic, said: "The figures are inflated. Possible spending is counted in as actual. And most of the good deals would have been made regardless of who was the White House." According to the Arab Gulf States Institute, Trump claimed that Saudi Arabia agreed to $450 Billion in deals during his first term. However, actual trade and investments flows between 2017 and 2020 amounted less than $300 Billion. "DEALMAKER in Chief" When asked about the figures, White House spokesperson Anna Kelly replied: "President Trump, the Dealmaker in chief, is a great news story for American workers and companies." The President is quickly fulfilling his promise to Make America Wealthy and Strong Again. Saudi and UAE officials didn't immediately respond to our requests for more information. Memorandums are less formal and don't always result in cash transactions. Saudi Aramco announced, for instance, that it had signed 34 agreements with U.S. firms worth up to $90.00 billion in AI infrastructure, among other areas. Most of the deals were not binding MoUs, and had no value attached. Aramco had announced its agreement to purchase 1.2 million tonnes per year of LNG from NextDecade for a period of 20 years months before, but it was still included on Wednesday's list. The White House stated that agreements signed with Qatar Emir Sheikh Tamim Bin Hamad Al-Thani will "generate economic exchanges worth at least $1.2 billion", including a $96-billion sale to Qatar Airways. It did not provide a detailed breakdown Qatari official says that Qatar's sovereign fund has made an "economic commitment" to invest $500 Billion in the U.S. Economy over the next ten years. However, this pledge does not include any concrete plans. Firas Macksad is the managing director of Eurasia Group. He said that if history is any guide, deals which have not delivered a real return will be abandoned after they have served their political purposes. Washington has signed a $142bn arms deal with Saudi Arabia, which covers purchases by more than 12 U.S. firms, and what Trump called a $42bn defence agreement with Qatar. During his first presidential term, Trump announced an arms sale of about $110 billion during his trip to Saudi Arabia. These deals are difficult to track because they last for many years. In 2018, only $14,5 billion in sales had been made, and Congress began questioning the deals after the murder of Saudi Journalist Jamal Khashoggi. Beyond the Numbers The news, despite the vagueness in the timelines and commitments, has helped some stocks on the market. Deutsche Bank attributes a 4.16 percent increase in Nvidia shares on Wednesday to a MoU announced by Saudi Arabia's state oil giant Aramco. There were also new, concrete deals made by U.S. firms. Qatar Airways has placed an order worth $96 billion for 160 Boeing aircraft with GE Aerospace engine. Etihad Airways in Abu Dhabi will spend $14.5billion to purchase 28 Boeing jetliners with GE Aerospace engines. Boeing's shares rose 0.64% after the Doha announcement on Wednesday. The real benefits of Trump's trip go beyond the numbers. The three Gulf states have also secured U.S. backing for issues they consider important. Saudi Arabia has moved closer to achieving its long-held ambition to develop a nuclear industry for civil use. Trump delinked normalisation of relations with Israel from the Saudi Arabian government's desire to do so. This is a significant win for Saudi Arabia. The UAE signed a framework which puts it on the path to acquiring advanced semiconductors in order to fulfill its long-held ambition to be a leader in AI. Qatar was assured by Trump that the U.S. will protect it in case of an attack. Hasan Alhasan is senior fellow for Middle East Policy at the International Institute for Strategic Studies. The Gulf States are completing unprecedented deals in business and arms sales, and taking their bilateral relations to a new level.
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Gold drops, heading for the worst week in six-months on easing trade tensions
Gold prices fell more than 2% Friday, and are heading towards their worst six-month period in recent memory. An overall stronger dollar and an interim U.S. China trade agreement have weakened investor demand for this safe-haven. As of 1136 GMT, spot gold was down by 1.9% at $3,178.06 per ounce. Bullion is down more than 4% this week, and it's on track to have its worst performance weekly since November 2024. U.S. Gold Futures dropped 1.4% to $3.180.90. Nitesh Sha, commodities strategist for WisdomTree, said: "We have had a week of positive signals regarding trade negotiations, and we've seen the dollar increase on its course. This is weighing down on gold prices." The U.S., China and other countries agreed earlier this week to temporarily reduce the high tariffs that were imposed on April. This agreement lifted the mood of the financial markets. Gold is less appealing to other currency holders because the dollar index has been subdued for the day but is on track for its fourth consecutive weekly gain. Last month, gold, which is often used to store value in times of financial and political uncertainty, reached a record high of $3.500.05 per ounce, thanks to central bank purchases, fears of tariff wars, and strong demand for investment. This week, the United States economic data and signs of a slowing inflation along with weaker than expected economic data have cemented the bets that more Federal Reserve rate reductions will occur this year. Gold that does not yield tends to flourish in an environment with low rates. Tim Waterer is the chief market analyst for KCM Trade. He said, "On the positive side, the gold price continues to attract buyers. This shows that precious metals remain a preferred asset. The global growth and inflation forecasts are still rather murky." Silver spot fell 1.8% at $32.08 per ounce. Platinum eased by 0.5% to $985.1, and palladium dropped 1% to $858.24.
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Enel and Masdar hold preliminary discussions on energy storage in Italy
Flavio Cataneo said that Enel is in preliminary discussions with Masdar, Abu Dhabi, about the possibility of developing energy storage in Italy. Cattaneo, speaking at a Milan business conference, said that the Italian and Emirati firms already have a partnership in Spain for a portfolio renewable energy assets. They are now exploring ways to expand their alliance into other countries. He stated that there was an understanding between Masdar and the company "to advance also in other geographical areas including Italy where they are interested and Masdar is very happy to be partners". It is important that Italy develops battery storage systems to provide power in the absence of solar or wind energy. Terna, the Italian grid operator, is expected to hold an auction for energy storage capacity by the end of September. Reporting by Elvira pollina. Francesca Landini wrote the article. Gavin Jones, Mark Potter and Gavin Jones edited the text.
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UN: Conflict and climate will drive global hunger to record levels in 2024.
According to a U.N. release on Friday, acute food insecurity and malnutrition among children will continue to rise for the sixth consecutive year, in 2024. This will affect more than 295 millions people in 53 countries. This was a 5% rise on the levels of 2023, with 22,6% of people in the worst-hit areas experiencing hunger at crisis level or worse. The 2025 Global Report on Food Crises presents a shocking picture, said Rein Paulsen Director of Emergencies and Resilience for the U.N. Food and Agriculture Organization. He added that "conflicts, extreme weather and economic shocks" are often the primary drivers. The U.N. has warned that conditions will worsen this year. It cites the steepest projected decline in humanitarian food funding in the report since its inception, estimated anywhere from 10% to over 45%. U.S. president Donald Trump led the way by largely closing down the U.S. Agency for International Development (USAID), which provides humanitarian aid to those in need around the globe, and cancelling over 80% of their programs. Cindy McCain, head of the Rome based World Food Programme, warned that "millions of hungry people will lose or soon lose the lifeline we provide." Hunger will affect nearly 140 millions people in 20 countries by 2024. This includes areas experiencing "catastrophic levels" of food insecurity, such as Gaza, South Sudan and Haiti. Sudan has confirmed that famine conditions exist. Inflation and currency devaluation have contributed to the food crisis in 15 countries, including Syria and Yemen. This is nearly twice the level seen before the COVID-19 pandemic. El Nino, which causes droughts and flooding, has thrown 18 countries, including Southern Africa, Southern Asia and the Horn of Africa, into crisis. More than 96 millions people have been affected. The number of people living in famine-like situations has more than doubled, reaching 1.9 millions -- the highest level since the monitoring for the Global Report began in 2016. The report stated that malnutrition in children has reached alarming levels. The report said that nearly 38 million children aged under five are acutely malnourished in 26 different nutrition crises. These include Sudan, Yemen Mali, and Gaza. The forced displacement of people also increases hunger. Nearly 95 millions forcibly displace people, including refugees, and internally displaced individuals, lived in countries that were facing a food crisis, such as the Democratic Republic of Congo or Colombia. Despite the overall grim trend, there were some positive developments in 2024. Food insecurity has decreased in 15 countries including Ukraine, Kenya, and Guatemala due to improved harvests, lower inflation, and humanitarian aid. The report urged investment in local food systems to break the cycle. Paulsen stated that "evidence shows supporting local agriculture is the best way to help people with dignity and at a lower cost." (Reporting and editing by Toby Chopra; reporting by Crispian B. Balmer)
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Trump: UAE and US agree that Abu Dhabi will buy the most advanced AI chip.
Donald Trump announced on Friday that the United Arab Emirates (UAE) and the United States agreed to open a pathway for Abu Dhabi to purchase some of the world's most advanced artificial-intelligence semiconductors from U.S. firms, which is a significant win for Abu Dhabi in its efforts to become a hub for global AI. Trump's Gulf tour also included a visit to Saudi Arabia, Qatar, and the UAE. The UAE capital Abu Dhabi and wealthiest emirate of the UAE made a promise to increase the value of their energy investments to the U.S. by $440 billion over the next decade. He announced deals worth over $200 billion on Thursday, including Etihad Airways' $14.5 billion investment in 28 Boeing aircraft made in the USA. Trump said, "We work together, and the money made here comes back home to us", during a press event in Abu Dhabi. Trump was praising the U.S.-UAE business relationship. "We made it work and you know that they were being wooed." "But there's no wooing anymore, I think we are in good shape," said he. The crown prince replied, "Absolutely." The AI deal finalised on Friday is a major boost for the UAE. It has been struggling to maintain a balance between its relationship with the U.S., its longest-standing ally, and China, its biggest trading partner. The Trump administration is confident that the chips will be managed safely, and has required data centres to be managed by U.S.-based companies. Trump stated that "Yesterday, the two countries agreed to create a pathway for UAE to purchase some of the most advanced AI semiconductors in the world from American companies. This is a very large contract." He added that the UAE plans to be a major player in artificial intelligent will accelerate as a result. ENERGY INVESTORS The UAE's energy commitment was announced by Sultan Al Jaber during his presentation to Trump, the chief executive of the Abu Dhabi state-owned energy giant ADNOC, during the final stage of Trump's regional tour, which has attracted huge financial commitments. Al Jaber, who spoke to Trump, said that the enterprise value of UAE investment in the U.S. Energy sector would increase from $70 billion today to $440 billion in 2035. He added that U.S. firms in energy will also invest the UAE. "Our partners have committed to new investments of $60 billion for upstream oil, gas and new unconventional opportunities," Jaber stated in front of a slideshow showing projects in the UAE with the logos ExxonMobil and Oxy, two U.S.-based companies. Jaber, executive chairman of XRG and minister for industry and advanced technologies, said that XRG is looking to invest a large amount of money in U.S. Natural Gas. In March, senior UAE officials had already met Trump and committed to a 10-year investment framework of $1.4 trillion in the U.S., in sectors such as energy, artificial intelligence, and manufacturing, to strengthen reciprocal ties. Trump stated that "we're making progress" for the $1.4 trillion that the UAE announced it intended to spend in the United States. The tour, which focused on investment deals and not on Middle East security crises, such as Israel's Gaza war, has been primarily focused on publically on the Gulf. Trump engaged in diplomacy during his brief meetings with the biggest energy producers around the world. He met with Syria’s interim president Ahmed al-Sharaa and said that he would lift sanctions against Syria on the request of Saudi Arabia’s crown prince. This is a major shift in U.S. foreign policy.
Lotte Chemical will start operating Indonesia cracker by H2 2025
An executive from Lotte Chemical's Malaysian affiliate told reporters on Friday that Lotte Chemical intends to begin operations at its new cracker plant in Indonesia by the second half 2025.
The cracker, which can produce 1,000,000 metric tons of ethylene per year, is part of the $3.95 billion Cilegon project in Indonesia's Banten Province. The facility will be operational at a moment when global petrochemical firms are experiencing lower margins due to an oversupply of ethylene from China.
Philip Kong, Executive Vice President, Corporate Planning at Lotte Chemical titan (LCT), said that Lotte Chemical had reduced its stake from 49% to 24% in order to manage its finances. The equity was sold to a group of five Korean finance companies. LCT is 51% owner of Lotte Chemical Indonesia.
He said that the company was looking for Middle East naphtha as a feedstock for crackers, on the sidelines the Asia Petrochemical Conference.
He added that Lotte could also switch 50% of its feedstock to natural gas liquids, such as liquefied petrol gas (LPG) or ethane.
Kong, vice president of the Malaysian Petrochemicals Association and LCT's Malaysian representative, stated that the company has been operating at only 45%-50% capacity since the middle of December.
Local media reported the company's intention to sell assets.
Kong stated that the petrochemical sector is currently experiencing a trend of mergers and purchases, so they are looking at all possible angles to maximize shareholder value.
(source: Reuters)