Gold succumbs to profit-taking after US jobs data-fuelled rally
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* Spot gold lost 0.3% to $3,351.80 per ounce as of 0055 GMT. Bullion had risen more than 2% on Friday. However, U.S. gold futures gained 0.2% to $3,404.80.
* The dollar index fell 0.5% against a basket of rivals, making gold more affordable for holders of other currencies. Meanwhile, the benchmark 10-year yield languished near a five-week trough.
* A weaker than expected U.S. employment growth in July and a downward revision of 258,000 jobs in the May and June non-farm payrolls signalled a sharp deterioration in labor market conditions and revived hopes of a Fed rate cut in September, with markets now pricing in a 90% chance, per CME FedWatch tool.
* Gold, traditionally considered a safe-haven asset during political and economic uncertainties, tends to thrive in a low-interest-rate environment.
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* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.15% to 953.08 tonnes on Friday from 954.51 tonnes on Thursday.
* Demand for physical gold in key Asian markets improved slightly last week as a pullback in prices sparked buying interest, though volatility kept some buyers cautious.
ADVERTISEMENT * Asian markets tracked Wall Street lower as fears for the U.S. economy returned with a vengeance, prompting investors to price in an almost certain rate cut in September and undermining the dollar. * Spot silver fell 0.5% to $36.83 per ounce, platinum slipped 0.6% to $1,307.25 and palladium dipped 1.6% to $1,189.27. DATA/EVENTS (GMT) 1400 US Factory Orders MM June.
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Hindustan Times
an hour ago
- Hindustan Times
Trump's tariff shadow on India-US relations
US President Donald Trump announced a secondary tariff of 25% on India, which is scheduled to come into effect from August 28. This was not entirely unexpected, especially as President Donald Trump had recently threatened 'substantial' tariffs on India. Stacking this on top of the 25% 'reciprocal' tariffs announced on July 30 takes the total tariff to 50%. Based on comments made by the president in his latest executive order, these secondary tariffs have little to do with the trade deficit that India runs with the US, and more with the 'threat to the United States by the government of the Russian Federation'. We would assume that if Russia engages, or agrees to engage, in peace talks with Ukraine, these secondary tariffs may well be reconsidered. After all, India is not the only country that imports oil from Russia, and other such importing nations have yet to face similar tariffs. For clarity, as of now the reciprocal tariff of 25% is in effect and the secondary tariff will come in effect from August 28. If and when both reciprocal and sectoral tariffs are implemented, we estimate that the total US tariff rate on India in trade-weighted terms would be 35.6%, much higher than 20.6%, including the reciprocal and sectoral tariffs. This secondary tariff, if implemented, would certainly dent India's growth outlook, but we believe that this announcement could be another negotiation tactic, and final US tariffs on India could end up lower than the announced 50% rate. There are hopes that the US delegation's scheduled visit to India on August 25 for a sixth round of talks on the bilateral trade agreement concludes in some form of deal, allaying the secondary tariff threat. Even before the secondary tariffs became a reality, the reciprocal tariffs of 25% by itself were relatively higher when compared with other emerging market Asian peers and other large trading partners, putting the Indian economy at a relatively disadvantageous position. From 'we are very close to a trade deal with India' to 'be prepared for substantially higher tariffs', the US's outlook towards India has undergone a sea change over the past month. India has called these additional duties unfair, unjustified and unreasonable. Clearly, given India's purchase of Russian oil is at the heart of this secondary tariff threat, it becomes critical to understand whether India is willing to pay the price for buying discounted Russian oil. The Indian government has stated that energy imports are meant to ensure 'predictable and affordable' energy costs domestically, characterising oil imports from Russia as 'safeguarding national interests'. India's rationale for purchasing Russian oil stems from the cost advantage that allowed relatively cheaper imports from 2022-2024. Russia's share of India's total oil imports went from ~2.7% in FY21-22 to 26% in FY24-25 (in US dollar terms), surpassing erstwhile top suppliers, Iraq and Saudi Arabia. We estimate imports of discounted crude oil from Russia allowed savings of ~$7-10 billion on a gross oil import bill of $186bn in 2024. As of now, the discount on oil imports from Russia has narrowed to around $3-8/bbl lower than Middle Eastern grade. Should India decide to diversify its oil supply and pivot back to traditional West Asian suppliers and new exporters such as Brazil to make up for lost Russian supply, the price increases could be in the region of ~$4-5/bbl. With global oil prices in 2025 so far settling around $9/bbl lower than 2024, such a diversification of oil supply sources is unlikely to hurt India's oil import bill. The latest data suggest that India has already diversified its source of crude oil imports in FY25-26 so far (April-May), with the share of mineral fuel imports from US rising to 9.8% of India's total, compared with 6.6% in FY24-25 (surging by 69% y/y). That Russia's share of India's oil imports was marginal pre-2022 suggests lowering (but not entirely replacing) imports from Russia is possible, provided the alternative supply is available at a reasonable price. The deadlock in the trade negotiations between US and India is driven by three factors. One, India's continued purchase of Russian oil and military equipment; two, the high tariff and non-tariff barriers imposed by India on US imports; and three, India's reported unwillingness to provide market access to US dairy and agri products into India. 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Economic Times
2 hours ago
- Economic Times
Is Intel collapsing under CEO Lip-Bu Tan? What went wrong with one of Silicon Valley's most iconic companies
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Time of India
2 hours ago
- Time of India
Jewelry retailer Claire's files for bankruptcy for the second time
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