Latest news with #geopoliticalrisks
Reuters
7 hours ago
- Business
- Reuters
Gold heads for weekly fall as fewer Fed rate cut prospects weigh
June 20 (Reuters) - Gold prices fell on Friday and were on track for a weekly decline, as an overall stronger dollar and the prospect of fewer U.S. interest rate cuts offset support from rising geopolitical risks in the Middle East. Spot gold slipped 0.5% to $3,355.49 an ounce, as of 0245 GMT, and was down 2.2% for the week so far. U.S. gold futures shed 1% to $3,371.80. "Right now there's a lot of fluid situation in the Middle East that causes traders not to take any aggressive position both on the long side and the short side of the trades of the spectrum," said Kelvin Wong, a senior market analyst, Asia Pacific at OANDA. The conflict in the Middle East intensified on Thursday when Israel bombed Iran's nuclear sites, while Iran fired missile and drone strikes on Israel, including an overnight attack on an Israeli hospital. Neither side has signalled an exit strategy. President Donald Trump will decide in the next two weeks whether the U.S. will get involved in the Israel-Iran air war, the White House said on Thursday, raising pressure on Tehran to come to the negotiating table. Meanwhile, Trump reiterated his calls for the Federal Reserve to cut interest rates, saying the rates should be 2.5 percentage points lower. The Fed held rates steady on Wednesday, and policymakers retained projections for two quarter-point rate cuts this year. "Macroeconomic developments, particularly steady yields and renewed USD strength, have not supported the (gold) price," analysts at ANZ said in a note. "Rising inflation expectations and the Fed's cautious stance have weighed on market expectations around the number of rate cuts this year." The dollar was set to log its biggest weekly rise in over a month on Friday. A stronger greenback makes gold more expensive for other currency holders. Elsewhere, spot silver slipped 1.6% to $35.82 per ounce, while palladium fell 0.7% to $1,042.92. Platinum fell 1.5% to $1,287.47, but was heading for its third straight weekly rise.
Zawya
7 hours ago
- Business
- Zawya
Gold heads for weekly fall as fewer Fed rate cut prospects weigh
Gold prices fell on Friday and were on track for a weekly decline, as an overall stronger dollar and the prospect of fewer U.S. interest rate cuts offset support from rising geopolitical risks in the Middle East. Spot gold slipped 0.5% to $3,355.49 an ounce, as of 0245 GMT, and was down 2.2% for the week so far. U.S. gold futures shed 1% to $3,371.80. "Right now there's a lot of fluid situation in the Middle East that causes traders not to take any aggressive position both on the long side and the short side of the trades of the spectrum," said Kelvin Wong, a senior market analyst, Asia Pacific at OANDA. The conflict in the Middle East intensified on Thursday when Israel bombed Iran's nuclear sites, while Iran fired missile and drone strikes on Israel, including an overnight attack on an Israeli hospital. Neither side has signalled an exit strategy. President Donald Trump will decide in the next two weeks whether the U.S. will get involved in the Israel-Iran air war, the White House said on Thursday, raising pressure on Tehran to come to the negotiating table. Meanwhile, Trump reiterated his calls for the Federal Reserve to cut interest rates, saying the rates should be 2.5 percentage points lower. The Fed held rates steady on Wednesday, and policymakers retained projections for two quarter-point rate cuts this year. "Macroeconomic developments, particularly steady yields and renewed USD strength, have not supported the (gold) price," analysts at ANZ said in a note. "Rising inflation expectations and the Fed's cautious stance have weighed on market expectations around the number of rate cuts this year." The dollar was set to log its biggest weekly rise in over a month on Friday. A stronger greenback makes gold more expensive for other currency holders. Elsewhere, spot silver slipped 1.6% to $35.82 per ounce, while palladium fell 0.7% to $1,042.92. Platinum fell 1.5% to $1,287.47, but was heading for its third straight weekly rise. (Reporting by Brijesh Patel and Anmol Choubey in Bengaluru; Editing by Eileen Soreng and Rashmi Aich)
Yahoo
15 hours ago
- Business
- Yahoo
Gold Holds as Traders Weigh Inflation Warning, Middle East Risks
(Bloomberg) -- Gold traded little changed as investors weighed rising geopolitical risks in the Middle East against an inflation warning from the Federal Reserve that raises the possibility of fewer US rate cuts. Security Concerns Hit Some of the World's 'Most Livable Cities' JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown How E-Scooters Conquered (Most of) Europe NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Bullion hovered near $3,369 an ounce as trading wound down in London, with activity muted because US markets are closed for a public holiday. The Fed left rates unchanged Wednesday, and policymakers penciled in two cuts by year's end. But Chair Jerome Powell said the central bank's market committee continued to expect tariffs to work their way into price gains. Fed policymakers also released new economic forecasts — their first since President Donald Trump's tariff spree in April — showing they expect weaker growth, higher inflation and lower employment in 2025. A significant rise in consumer prices may curtail monetary easing, which would be a negative for gold as it doesn't pay interest. That offset support for bullion from war fears in the Middle East, with some US officials said to be preparing for the possibility of a strike on Iran in the coming days. The geopolitical tensions and economic uncertainty have combined with robust buying from central banks and inflows to exchange-traded funds to push gold almost 30% higher this year. Spot gold was little changed at $3,370.78 as of 3:37 p.m. in New York. Silver fell 1%, but remained near the highest since 2012, while palladium also slipped. Platinum dropped 1.4%, reversing an earlier jump that saw it reach the highest level in more than a decade. Gains in the metal have been underpinned by a spike in demand and an ongoing market deficit. 'Gold is currently hovering near record highs, which makes further investment vulnerable to changing macroeconomics,' said Priyanka Sachdeva, an analyst at Phillip Nova Pte Ltd. 'That's probably why we are seeing safe-haven flows being redirected to platinum and silver.' --With assistance from Doug Alexander. Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It How a Tiny Middleman Could Access Two-Factor Login Codes From Tech Giants Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18 hours ago
- Business
- Yahoo
Gold Holds as Traders Weigh Inflation Warning, Middle East Risks
(Bloomberg) -- Gold traded little changed as investors weighed rising geopolitical risks in the Middle East against an inflation warning from the Federal Reserve that raises the possibility of fewer US rate cuts. Security Concerns Hit Some of the World's 'Most Livable Cities' JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown How E-Scooters Conquered (Most of) Europe NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Bullion hovered near $3,369 an ounce as trading wound down in London, with activity muted because US markets are closed for a public holiday. The Fed left rates unchanged Wednesday, and policymakers penciled in two cuts by year's end. But Chair Jerome Powell said the central bank's market committee continued to expect tariffs to work their way into price gains. Fed policymakers also released new economic forecasts — their first since President Donald Trump's tariff spree in April — showing they expect weaker growth, higher inflation and lower employment in 2025. A significant rise in consumer prices may curtail monetary easing, which would be a negative for gold as it doesn't pay interest. That offset support for bullion from war fears in the Middle East, with some US officials said to be preparing for the possibility of a strike on Iran in the coming days. The geopolitical tensions and economic uncertainty have combined with robust buying from central banks and inflows to exchange-traded funds to push gold almost 30% higher this year. Spot gold was little changed as of 5:36 p.m. in London. The Bloomberg Dollar Spot Index added 0.2%. Silver fell 1% but remained near the highest since 2012, while palladium also slipped. Platinum dropped 2.2%, reversing an earlier jump that saw it reach the highest level in more than a decade. Gains in the metal have been underpinned by a spike in demand and an ongoing market deficit. 'Gold is currently hovering near record highs, which makes further investment vulnerable to changing macroeconomics,' said Priyanka Sachdeva, an analyst at Phillip Nova Pte Ltd. 'That's probably why we are seeing safe-haven flows being redirected to platinum and silver.' Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It How a Tiny Middleman Could Access Two-Factor Login Codes From Tech Giants Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Reuters
20 hours ago
- Business
- Reuters
Oil, war and tariffs tear up markets' central bank roadmap
LONDON, June 19 (Reuters) - Investor unease about an increasingly uncertain environment is rising, as Norway's shock rate cut on Thursday highlights how U.S. tariffs, Middle East conflict and a shaky dollar make global monetary policy and inflation even harder to predict. Norway's crown slid roughly 1% against the dollar and the euro , in a sign of how unexpected the move was. And Switzerland, which cut borrowing costs to 0% on Thursday, confounded some expectations among traders for a return to negative rates in the deflation-hit nation, as its central bank warned of a cloudy global outlook. Just a day earlier the U.S. Federal Reserve kept rates on hold and chair Jerome Powell said "no one" had conviction on the rate path ahead. The conclusion for markets: monetary policy uncertainty is one more headwind to navigate against a backdrop of geopolitical and trade risks. Global stocks pulled away from recent peaks, a gauge of expected volatility in European equities (.V2TX), opens new tab touched a two-month high as stocks across the region fell and government bonds, usually geopolitical risk havens, sold off. "We're at a moment of considerable policy and macro uncertainty," said BlueBay chief investment officer at RBC Global Asset Management Mark Dowding. "We can't see a clear trend on interest rates," he added, which meant he was holding back from active market bets across the group's investment portfolios. Volatility was set to rise, some investors said, because a choppy dollar and oil prices whipped around by geopolitics meant that central banks were far less able to provide markets and investors a clear route map for the future. "You cannot just take your cues from the central banks anymore as they are facing a harder job of reading the economy themselves," T.S. Lombard director of European and global macro Davide Oneglia said. Rate-cutting European central banks are not just diverging from the Fed, which is grappling with the inflationary risks of President Donald Trump's tariffs. They are also struggling to navigate a new era where the dollar , the lynchpin of world trade, commodity prices and asset valuations, has turned weaker and more volatile under trade war stress and government debt anxiety. "That's a massive, massive fundamental shift in global markets that everyone is trying to assess," Monex Europe head of Macro Research Nick Rees said. "All of those standard economic rules of thumb we use for forecasting are completely broken right now." The dollar is down almost 9% against other major currencies this year but has risen following the outbreak of a war between Israel and Iran. European Central Bank policymaker Francois Villeroy de Galhau said on Thursday the ECB might have to adapt its rate cut plans if oil price volatility was long-lasting. The new status quo in markets could well be an era of central bank surprises that create rapid shifts in the market narrative, asset pricing and volatility trends, analysts said. "We're getting into this next cycle in which variables are much more volatile, because, rather than (monetary policy) being just easily predictable, events just take over and policy and human factors, as we now know with Donald Trump, play an important role," Oneglia said. Norway's surprise cut came because the crown was a "runaway top currency" of the trade-war era, added Societe Generale's head of FX strategy Kit Juckes. With investors chasing around the world to identify stores of wealth that are not U.S. dollars, meanwhile, the Swiss franc has soared, cutting the costs of imports and pushing the economy into deflation. On Thursday, the franc rose against the dollar as traders saw the SNB's cut as too small to keep deflation at bay. Ninety One multi-asset head John Stopford said the hazard risk was rising for global stocks and that options products that aim to offer protection from incoming volatility looked fairly cheap. He was buying bonds issued in nations where inflation and rates could come down materially, such as New Zealand, but was negative on longer-dated U.S. Treasuries and German Bunds where economic uncertainty was higher and government borrowing was likely to rise. Global stocks (.MIWD00000PUS), opens new tab remain almost 20% above their April trough, after investors relaxed about tariffs. Stopford said there was more to worry about in the short term. "The stock market feels like it's a thatched house in a hot country with a fire hazard risk, and people aren't charging much to insure the house," Stopford added.
