Gold holds steady ahead of Fed policy statement
Spot gold was steady at US$3,329.19 per ounce as at 0020 GMT. US gold futures rose 0.1 per cent to US$3,327.70.
US and Chinese officials agreed to seek an extension of their 90-day tariff truce on Tuesday, following two days of talks in Stockholm.
However, US officials said that it was up to US President Donald Trump to decide whether to extend a trade truce that expires on August 12 or potentially let tariffs shoot back up to triple-digit figures.
Meanwhile, the US dollar index held steady after hitting a more than one-month high on Tuesday, making greenback-priced bullion more expensive.
Investors turned their focus to the Fed's policy to gauge its future rate cut path, following the central bank's two-day meeting, during which it is widely expected to keep rates steady, despite Trump's constant call to lower them.
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The US trade deficit in goods narrowed to its lowest in nearly two years in June as imports fell sharply, cementing economists' expectations that trade likely accounted for much of an anticipated rebound in economic growth in the second quarter.
The International Monetary Fund slightly raised its global growth forecasts for 2025 and 2026 on Tuesday, citing stronger-than-expected buys ahead of a jump in US tariffs on Aug 1 and a drop in the effective tariff rate to 17.3 per cent from 24.4 per cent.
Meanwhile, on Tuesday, Trump threatened tariffs and other measures on Russia '10 days from today' if Moscow showed no progress towards ending its more than three-year-long war in Ukraine.
Spot silver held steady at US$38.20 per ounce, platinum fell 0.4 per cent to US$1,389.20 and palladium remain unchanged at US$1,258.75. REUTERS
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Straits Times
2 minutes ago
- Straits Times
As China-US tariff truce talks drag on, what are prospects for a ‘big deal' for Trump?
Sign up now: Get ST's newsletters delivered to your inbox US Treasury Secretary Scott Bessent and Chinese Vice-Premier He Lifeng meeting in Stockholm for talks on July 28. – The US and China face a tightening deadline to renew their tariff truce, which currently shields them from sky-high tariffs of 125 per cent and 145 per cent, respectively. If not renewed by Aug 12, the world's two largest economies will be back to waging their trade war, or what in practical terms amounts to a trade embargo: Very little business can be transacted at such steep tariff rates. The week began optimistically enough, with a third round of bilateral talks in Stockholm, which were expected to pave the way for a smooth extension of the current arrangement. This followed an agreement in May that suspended the triple-digit tariffs and allowed Chinese goods to enter the US with an additional 30 per cent tariff. US goods faced a lower 10 per cent tariff in China. But that expectation was belied in Stockholm, with any extension of the truce becoming contingent on US President Donald Trump's final approval. Although Treasury Secretary Scott Bessent described the July 28 and 29 talks in Stockholm with Chinese Vice-Premier He Lifeng as 'far-reaching, robust and highly satisfactory', he also insisted that he had to take the discussions home to Washington for Mr Trump to sign off on. At the Chinese end, Vice-Commerce Minister Li Chenggang said the two sides agreed to 'continue pushing for a continued extension of the pause'. Top stories Swipe. Select. Stay informed. Tech Reporting suspected advanced cyber attacks will provide a defence framework: Shanmugam Singapore Tanjong Katong sinkhole: Road will progressively open to motorists from Aug 2 noon World Trump modifies reciprocal tariffs ahead of deadline; rate on Singapore likely to remain at 10% Business Singapore's US tariff rate stays at 10%, but the Republic is not out of the woods yet Singapore 5 women face capital charges after they were allegedly found with nearly 27kg of cocaine in S'pore Business Sumo Salad had valid insurance coverage for work injury claims: MOM Asia Australia to force Google to conduct age checks in world-first rules for search engines Singapore PM Wong to deliver National Day message on Aug 8 Mr Bessent has presumably briefed the President by now, but Mr Trump has remained non-committal. All Mr Trump said at a July 30 press conference was: 'We're moving along with China... I think we're going to have a very fair deal.' Is the US keeping China hanging to extract some concessions? Or is the US stance a clue that it is Beijing that has a stronger hand in negotiations at this point? Trade analysts in the US and Asia said there were signs that the negotiations had not gone as well as Washington hoped. 'The real question is why Bessent didn't just call him up, but instead wanted to wait to ask him in person,' said Mr William Reinsch, who analyses economics and international business at the Centre for Strategic and International Studies (CSIS) in Washington. 'That suggests there were other issues that came up in the Stockholm meetings that Bessent wanted to discuss directly with Trump, at greater length and with greater confidentiality than a call would permit.' Mr Bessent is just doing what Mr He has probably been doing from the start, said Dr Alicia Garcia-Herrero, Hong Kong-based chief economist for Asia-Pacific at French investment bank Natixis. 'Saying that you cannot cut a deal but you need your boss always helps,' she added, noting that this is a handy way to leave room for further manoeuvres. 'But beyond the leverage gained, I do think negotiations are not going well, simply because China is emboldened with good data, especially on exports, and is telling the US that it does not need to rush,' she said. In the first half of 2025, China's exports rose by about 5.9 per cent year on year, supported by strong sales in South-east Asia, the European Union, Africa and India. These numbers helped offset declines in exports to the US. To be sure, China's exports to the US have dipped significantly in 2025 as a direct result of the US tariffs. Shipments of key items like electronics, machinery, furniture and toys dropped by between 29 per cent and 67 per cent in May compared with the previous year. Overall, exports to the US fell 41 per cent between January and May, although there was a surge in June as Chinese exporters rushed to ship goods before the truce expires on Aug 12. The silence following the Stockholm talks is puzzling because the bar for success was low in that both just needed to agree to an extension of the truce, said Mr Stephen Olson, a former US trade negotiator, who is now a visiting senior fellow with ISEAS – Yusof Ishak Institute in Singapore. 'The fact that negotiators failed to clear even that low bar suggests that a certain amount of theatrics is involved,' added Mr Olson. 'It could simply be a matter of highlighting Trump's authority and relevance.' Or it could reflect that Beijing is 'digging in its heels and being less compliant than the US expected'. 'China believes that it has considerable leverage and will not be willing to agree to a one-sided deal as it did in the Phase One agreement reached during Trump's first term,' he noted. In 2020, China pledged to increase its purchases of US goods and services by at least US$200 billion (S$260 billion) over 2017 levels to ease trade tensions. It eventually bought only about 60 per cent of the pledged amounts by end 2021. In the lead up to the Stockholm talks, the White House appeared to make conciliatory moves towards Beijing, giving the impression that China had a stronger hand this time around. It eased exports of Nvidia's H20 chips to China and cancelled a reported stopover by Taiwan President Lai Ching-te in New York. The Americans did not allow a planned Pentagon visit by Taiwan's Defence Minister Wellington Koo in June. The Chinese, on the other hand, have been playing it cool. They have made no major concessions. And the pressure seemed to be on the American side to carve out a win. Asked about the biggest concession Beijing had made in trade talks so far, US Trade Representative Jamieson Greer seemed strangely subdued. 'Well, I would say they blocked all of their rare earth magnets, and now we're getting them,' he said. Except, that concession was from a previous round of talks in June. And although China has resumed the supply of rare earth materials, which are critical for products like electric vehicles, the shipments remain below levels in 2024. The People's Daily, the mouthpiece of China's ruling Communist Party, provided an indication that the country would stand its ground against the US in a July 29 editorial published even as the talks were under way. 'Differences between countries are inevitable; the key lies in how they are addressed,' the editorial said. 'Sincerity, however, does not imply compromising on principles. Consultations have bottom lines, and cooperation must be grounded in clear principles,' it added. The sentiment was reflected in academic circles in China. The country does not bend to pressure unlike Europe and Japan, said Professor Cui Hongjian at the Academy of Regional and Global Governance at Beijing Foreign Studies University. 'Beijing will continue to negotiate at its own pace, based on its own strategy and objectives and stick to its principle of reciprocity. That stance is quite clear and firm,' he added. Big goals remain unachievable in the US-China talks, say experts. China has made no real progress in meeting America's longstanding demands such as increasing its domestic consumption, reducing overcapacity or ending state subsidies, forced technology transfer and cyber attacks, noted Mr Reisch in a CSIS commentary. 'In turn, China's demands of the United States, that we relax our technology and investment controls and stop taking 'unfair' actions against them, are not acceptable to the United States,' he said. 'That means a big deal is impossible, but a small one is not necessarily out of the question,' Mr Reisch added. 'For Trump, the appearance of a win often matters more than the substance, so even a modest purchase agreement could be framed as a major victory,' he said. 'I think that is the most likely outcome – the usual drama, perhaps more yo-yoing, and then a minor deal, which will be overstated,' he added. Dr Sun Chenghao, a fellow at Tsinghua University's Centre for International Security and Strategy in Beijing, agreed that there is no clear path towards resolving the deeper issues between the two countries. Among the more intransigent issues are America's technology export controls, its objections to Chinese ownership of wildly popular TikTok and its insistence that China must do more to curb the trafficking of deadly synthetic opioid fentanyl. 'The US' strategy of bundling multiple issues together may improve Trump's chances of declaring partial victories but it also clearly adds to the overall complexity of the negotiations,' said Dr Sun.
Straits Times
2 minutes ago
- Straits Times
Why has India vowed to protect its farmers in the face of tariff threats?
Sign up now: Get ST's newsletters delivered to your inbox MUMBAI - U.S. President Donald Trump on Thursday slapped a 25% tariff on Indian goods after prolonged talks that got bogged down over access to India's labour-intensive agricultural sector, which New Delhi has pledged to protect. WHY IS INDIA OPPOSING THE PRODUCTS THE U.S. IS LOBBYING FOR? The United States is pressing India to open its markets to a wide range of American products, including dairy, poultry, corn, soybeans, rice, wheat, ethanol, fruits and nuts. While India is willing to provide greater access for U.S. dry fruits and apples, it is holding back on corn, soybeans, wheat, and dairy products. A key reason for this resistance is that most U.S. corn and soybeans are genetically modified (GM), and India does not permit the import of GM food crops. GM crops are widely perceived in India as harmful to human health and the environment, and several groups affiliated with Prime Minister Narendra Modi's ruling Bharatiya Janata Party (BJP) are opposing their introduction. The commercial cultivation of a high-yielding GM mustard variety that India developed itself is currently not allowed due to an ongoing legal battle. Like GM crops, dairy is also a highly sensitive issue, as it provides a livelihood for millions of farmers, including many who are landless or smallholders. The dairy industry helps sustain farmers even during erratic monsoon seasons, which can cause significant fluctuations in crop production. In India, where a large proportion of the population is vegetarian, food choices are strongly influenced by cultural and dietary preferences. Indian consumers are particularly concerned that cattle in the U.S. are often fed animal by-products - a practice that conflicts with Indian food habits. Top stories Swipe. Select. Stay informed. Tech Reporting suspected advanced cyber attacks will provide a defence framework: Shanmugam Singapore Tanjong Katong sinkhole: Road will progressively open to motorists from Aug 2 noon World Trump modifies reciprocal tariffs ahead of deadline; rate on Singapore remains at 10% Business Singapore's US tariff rate stays at 10%, but the Republic is not out of the woods yet Singapore 5 women face capital charges after they were allegedly found with nearly 27kg of cocaine in S'pore Business Sumo Salad had valid insurance coverage for work injury claims: MOM Asia Australia to force Google to conduct age checks in world-first rules for search engines Singapore PM Wong to deliver National Day message on Aug 8 WHY ARE AGRICULTURAL IMPORTS POLITICALLY CHARGED? India is self-sufficient in most farm goods, with the exception of vegetable oils. After liberalising cooking oil imports over three decades ago, the country now has to import nearly two-thirds of its supply to meet demand. India does not want to repeat this mistake with other basic foods, which account for nearly half of its consumer price index. Though agriculture makes up just 16% of India's nearly $3.9 trillion economy, it is the lifeblood for nearly half the country's 1.4 billion people. Four years ago, this powerful voting bloc forced Modi's government into a rare retreat on a set of controversial farm laws. Some in power fear a flood of cheaper U.S. imports would bring down local prices and hand opposition parties an opportunity to sharpen its attack on the government. New Delhi is also worried that a trade deal with the U.S. could also force it to open its agricultural sector to other countries. HOW DOES FARMING IN INDIA AND THE U.S. DIFFER? The vast disparity in the scale of farming makes it difficult for Indian farmers to compete with their U.S. counterparts. The average Indian farm is a 1.08 hectares (2.67 acres), compared to 187 hectares in the U.S. For dairy farmers, the difference is even more dramatic - a small herd of two or three animals versus hundreds or more in the U.S. Many Indian farmers also rely on traditional, unmechanised techniques, while American agriculture has developed into a highly efficient, tech-driven industry. WHY IS INDIA HESITANT TO USE U.S. ETHANOL IN ITS BIOFUEL PROGRAMME? One of India's key goals with its Ethanol Blended Petrol (EBP) programme is to reduce energy imports and support domestic farmers by using sugarcane and corn for biofuel production. Indian companies have invested heavily in new distilleries, and farmers have expanded corn cultivation to meet the rising demand. India recently achieved its ambitious target of a 20% ethanol blend in petrol. With state assembly elections approaching in Bihar - a major corn-producing state in the east - allowing U.S. ethanol imports would lower local corn prices. This would probably anger farmers and turn them against the BJP ahead of the election and also undermine the growing distillery sector. REUTERS
Straits Times
2 minutes ago
- Straits Times
Explainer-Why has India vowed to protect its farmers in the face of tariff threats?
Sign up now: Get ST's newsletters delivered to your inbox MUMBAI - U.S. President Donald Trump on Thursday slapped a 25% tariff on Indian goods after prolonged talks that got bogged down over access to India's labour-intensive agricultural sector, which New Delhi has pledged to protect. WHY IS INDIA OPPOSING THE PRODUCTS THE U.S. IS LOBBYING FOR? The United States is pressing India to open its markets to a wide range of American products, including dairy, poultry, corn, soybeans, rice, wheat, ethanol, fruits and nuts. While India is willing to provide greater access for U.S. dry fruits and apples, it is holding back on corn, soybeans, wheat, and dairy products. A key reason for this resistance is that most U.S. corn and soybeans are genetically modified (GM), and India does not permit the import of GM food crops. GM crops are widely perceived in India as harmful to human health and the environment, and several groups affiliated with Prime Minister Narendra Modi's ruling Bharatiya Janata Party (BJP) are opposing their introduction. The commercial cultivation of a high-yielding GM mustard variety that India developed itself is currently not allowed due to an ongoing legal battle. Like GM crops, dairy is also a highly sensitive issue, as it provides a livelihood for millions of farmers, including many who are landless or smallholders. The dairy industry helps sustain farmers even during erratic monsoon seasons, which can cause significant fluctuations in crop production. In India, where a large proportion of the population is vegetarian, food choices are strongly influenced by cultural and dietary preferences. Indian consumers are particularly concerned that cattle in the U.S. are often fed animal by-products - a practice that conflicts with Indian food habits. Top stories Swipe. Select. Stay informed. Tech Reporting suspected advanced cyber attacks will provide a defence framework: Shanmugam Singapore Tanjong Katong sinkhole: Road will progressively open to motorists from Aug 2 noon World Trump modifies reciprocal tariffs ahead of deadline; rate on Singapore likely to remain at 10% Business Singapore's US tariff rate stays at 10%, but the Republic is not out of the woods yet Singapore 5 women face capital charges after they were allegedly found with nearly 27kg of cocaine in S'pore Business Sumo Salad had valid insurance coverage for work injury claims: MOM Asia Australia to force Google to conduct age checks in world-first rules for search engines Singapore PM Wong to deliver National Day message on Aug 8 WHY ARE AGRICULTURAL IMPORTS POLITICALLY CHARGED? India is self-sufficient in most farm goods, with the exception of vegetable oils. After liberalising cooking oil imports over three decades ago, the country now has to import nearly two-thirds of its supply to meet demand. India does not want to repeat this mistake with other basic foods, which account for nearly half of its consumer price index. Though agriculture makes up just 16% of India's nearly $3.9 trillion economy, it is the lifeblood for nearly half the country's 1.4 billion people. Four years ago, this powerful voting bloc forced Modi's government into a rare retreat on a set of controversial farm laws. Some in power fear a flood of cheaper U.S. imports would bring down local prices and hand opposition parties an opportunity to sharpen its attack on the government. New Delhi is also worried that a trade deal with the U.S. could also force it to open its agricultural sector to other countries. HOW DOES FARMING IN INDIA AND THE U.S. DIFFER? The vast disparity in the scale of farming makes it difficult for Indian farmers to compete with their U.S. counterparts. The average Indian farm is a 1.08 hectares (2.67 acres), compared to 187 hectares in the U.S. For dairy farmers, the difference is even more dramatic - a small herd of two or three animals versus hundreds or more in the U.S. Many Indian farmers also rely on traditional, unmechanised techniques, while American agriculture has developed into a highly efficient, tech-driven industry. WHY IS INDIA HESITANT TO USE U.S. ETHANOL IN ITS BIOFUEL PROGRAMME? One of India's key goals with its Ethanol Blended Petrol (EBP) programme is to reduce energy imports and support domestic farmers by using sugarcane and corn for biofuel production. Indian companies have invested heavily in new distilleries, and farmers have expanded corn cultivation to meet the rising demand. India recently achieved its ambitious target of a 20% ethanol blend in petrol. With state assembly elections approaching in Bihar - a major corn-producing state in the east - allowing U.S. ethanol imports would lower local corn prices. This would probably anger farmers and turn them against the BJP ahead of the election and also undermine the growing distillery sector. REUTERS
