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Gold edges higher with spotlight on US-China trade talk

Gold edges higher with spotlight on US-China trade talk

Shafaq News2 days ago

Shafaq News/ The US dollar index (.DXY), opens new tab shed 0.3%, making greenback-priced bullion cheaper for other currency holders.
Senior US and Chinese officials meet in London to discuss tit-for-tat tariffs imposed on each other's products this year, along with other trade restrictions.
Last month, the two sides had agreed to a temporary pause, providing some relief to investors.
"In the short term, if there is a positive outcome of the meeting, it could be a little negative for gold, but not too much," said Bart Melek, head of commodity strategies at TD Securities.
"I think a weaker economy, likely interest rate cuts and lower momentum on the risk appetite side is getting people to move into gold. And, of course expectations of higher inflation."
Elsewhere, Russia said its forces had taken control of more territory in Ukraine's east-central region of Dnipropetrovsk, where the Kremlin said fighting was partly aimed at creating a "buffer zone."
Safe-haven gold becomes more attractive during periods of geopolitical and economic uncertainty. It also tends to thrive in a low-interest rate environment as it is a non-yielding asset.
Investors also await US Consumer Price Index data due on Friday, to gauge the country's economic health and predict the Federal Reserve's rate cut trajectory.
Data over the weekend showed that China's central bank added gold to its reserves in May for the seventh straight month.
Spot platinum was up 3.7% at $1,212.82, reaching its highest point since May 2021.
Spot silver gained 2.1% to $36.71 per ounce, while palladium rose nearly 3% to $1,077.64.

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Oil prices jump 4% to 2-month high as tensions rise in Middle East
Oil prices jump 4% to 2-month high as tensions rise in Middle East

Shafaq News

time2 hours ago

  • Shafaq News

Oil prices jump 4% to 2-month high as tensions rise in Middle East

Shafaq News/ Oil prices rose more than 4% on Wednesday, to their highest in more than two months, after sources said the US was preparing to evacuate its Iraqi embassy due to heightened security concerns in the Middle East. Brent crude futures settled $2.90, or 4.34%, higher to $69.77 a barrel. US West Texas Intermediate crude gained $3.17, or 4.88%, to $68.15. Both Brent and WTI reached their highest since early April. Surprised traders bought crude futures on reports the US was preparing to evacuate its embassy in Iraq, OPEC's No. 2 crude producer after Saudi Arabia. A US official said military dependents could also leave Bahrain. "The market wasn't expecting this big geopolitical risk," said Phil Flynn, analyst at Price Futures Group. Earlier, Iran's Minister of Defense Aziz Nasirzadeh Tehran will strike US bases in the region if nuclear talks fail and conflict arises with Washington. Trump said he was less confident that Iran would agree to stop uranium enrichment in a nuclear deal with Washington, according to an interview released on Wednesday. Ongoing tension with Iran means its oil supplies are likely to remain curtailed by sanctions. Supplies will still increase, as OPEC+ plans to boost oil production by 411,000 barrels per day in July as it looks to unwind production cuts for a fourth straight month. "Greater oil demand within OPEC+ economies – most notably Saudi Arabia – could offset additional supply from the group over the coming months and support oil prices," said Capital Economics' analyst Hamad Hussain in a note. Also keeping prices elevated was news of a trade deal between the US and China, which could boost energy demand in the world's two biggest economies. Trump said Beijing would supply magnets and rare earth minerals and the US will allow Chinese students in its colleges and universities. Trump added the deal is subject to final approval by him and President Xi Jinping. The trade-related downside risk in oil has been temporarily removed, although the market reaction has been tepid as it is not clear how economic growth and global oil demand will be affected, PVM analyst Tamas Varga said. In the US, crude inventories fell by 3.6 million barrels to 432.4 million barrels last week, the Energy Information Administration said. Analysts polled by Reuters had expected a draw of 2 million barrels. "It's a bullish report," said Bob Yawger, director of energy futures at Mizuho, adding that the demand for motor gasoline began to strengthen. Product supplied for motor gasoline, a proxy for demand, rose by about 907,000 barrels per day last week, to 9.17 million bpd. US consumer prices increased only marginally in May, deepening the conviction in financial markets that the Federal Reserve will start cutting interest rates by September. Lower interest rates can spur economic growth and oil demand.

Iraq's budget: political fiscal gaps threaten national stability in 2025
Iraq's budget: political fiscal gaps threaten national stability in 2025

Shafaq News

time10 hours ago

  • Shafaq News

Iraq's budget: political fiscal gaps threaten national stability in 2025

Shafaq News/ By mid-2025, Iraq finds itself ensnared in a deepening fiscal and political crisis. The government has yet to submit the budget tables for the 2025 federal budget to Parliament—more than six months into the fiscal year. What began as a delay has evolved into a systemic disruption, with experts and lawmakers warning that the stalled budget threatens not only government functionality but also the daily stability of millions of Iraqis—particularly the most vulnerable segments of society. A Tripartite Budget Under Pressure This budgetary paralysis is unfolding despite the legislative innovation of the tripartite budget, passed in 2023 under Law No. 13. The law allowed for a unified budget covering three fiscal years—2023, 2024, and 2025—intended to streamline financial governance, support long-term investment projects, and ensure timely salary disbursements. Yet, the framework has struggled against economic headwinds and entrenched political dynamics. The 2023 budget, valued between 199 and 211 trillion Iraqi dinars (around $153 billion), was formulated based on oil priced at $70 per barrel. However, global oil prices fell to nearly $55 per barrel, creating a substantial shortfall. The resulting fiscal deficit reached nearly 63.6 trillion dinars ($48.5 billion), severely curbing capital investment and forcing the suspension of numerous infrastructure and service projects. In 2024, despite a larger budget of 211–213 trillion dinars (approximately $162 billion), the fiscal deficit remained nearly identical. The outlook for 2025 projects a similar deficit of 64 trillion dinars (around $48 billion). Economic expert Abdulrahman al-Sheikhly explained to Shafaq News that 'all projects were included in the tripartite budget, but the drop in oil prices created a deficit that halted funding for investment projects.' Nevertheless, Sheikhly reassured that 'operating budgets covering salaries, pensions, and social welfare remain secure—even if oil prices fall to $40 per barrel.' Budget as Political Leverage At the heart of the current crisis lies a broader shift in the budget's purpose—from a vehicle for national development into a tool of political leverage. Increasingly, it has become a bargaining instrument among rival political blocs, particularly during election cycles. As Iraq prepares for parliamentary elections scheduled for November, the budget has become deeply entangled in campaign dynamics and factional calculations. Political factions have reportedly delayed the submission and approval of the budget tables in hopes of extracting concessions—whether in the form of greater allocations for their constituencies, control over ministries, or key appointments. Political analyst Mujashaa al-Tamimi told Shafaq News that the delay is 'not merely a technical failure, but another example of how the budget becomes a political instrument during elections.' With the vote approaching, parties are leveraging the deadlock to promise voters budgetary relief or to accuse rivals of blocking resources. Al-Tamimi warned that 'the lack of legislative stability is being exploited to expand unplanned expenditures and delay key entitlements—bonuses, promotions, and financial rights for provinces and executing entities.' He added, 'This jeopardizes fiscal stability, erodes investor confidence, and burdens ordinary citizens and employees with the costs of political procrastination.' Even more concerning, al-Tamimi forecasted that should post-election government formation be delayed, Iraq may enter 2026 without a federal budget—operating instead on emergency monthly disbursements as stipulated under the Financial Management Law. Such a scenario would severely limit the government's ability to launch new projects or respond to emerging crises. Regional Inequities and Service Breakdown The effects of the budget deadlock are being felt acutely in Iraq's provinces. Areas like Al-Diwaniyah, Babil, Muthanna, and Karbala have borne the brunt of financial stagnation. Deputy head of Parliament's Regions and Governorates Committee, MP Jawad al-Yasari, told Shafaq News that financial allocations for these provinces were calculated based on outdated population data, neglecting current demographic realities. 'Local governments are unable to implement service projects because of the limited financial allocations,' he said. MP Mahdiya al-Lami described Al-Diwaniyah as 'a service disaster area,' citing dire shortfalls in infrastructure related to water, healthcare, and education. In Babil, only 6% of the planned 2023 infrastructure projects have been completed, according to Shafaq News inquiry. Al-Lami added that provinces like al-Anbar and Saladin, still recovering from the aftermath of ISIS and military operations, remain underserved due to delayed fund disbursements. She also pointed to longstanding, stalled projects—such as the Najaf sewage system and the Mahmudiya water plant—that have suffered from chronic underfunding. Contractors and construction companies in Baghdad, she noted, are now staging regular protests at the Baghdad Municipality's project offices, demanding payment for services rendered. Sociologist Ruqayya Salman drew a direct correlation between the budget delay and growing societal instability. 'The living conditions of most Iraqis are now hostage to political fluctuations,' she told Shafaq News. 'The repeated delay in passing the budget disrupts service and development projects, postpones salaries and entitlements, and undermines employment opportunities—destabilizing Iraqi families, especially those dependent on social welfare or temporary contracts.' She added that these conditions have 'deepened the gulf between the state and the citizen, exacerbated youth frustration, and increased migration, unemployment, and domestic violence.' Salman also warned that 'the erosion of the middle class and price hikes resulting from unpaid salaries are pushing Iraqis toward social despair while the political class remains untouched.' The budget, she emphasized, must serve as a tool for social justice and national development—not a political scorecard. Constitutional Violations and Legal Concerns Beyond its economic and social impacts, the delay also carries constitutional implications. Legal expert Abbas al-Uqabi told Shafaq News that withholding legally mandated financial disbursements is a prosecutable offense under Article 93/Third of the Iraqi Constitution. 'Delaying financial entitlements included in the general budget law is prosecutable… these actions are no less serious than direct financial corruption,' he said. Parliamentarian Hussein al-Saabari has already taken legal action, accusing the government of violating the constitutional requirement that budget tables be submitted before the end of the fiscal year. As of June, the deadline had been exceeded by over six months, further eroding legislative accountability. A Fragile Financial Outlook The broader fiscal outlook remains deeply uncertain. The Finance Committee has issued warnings about a looming liquidity crisis stemming from falling oil revenues, weak non-oil sector performance, and stalled investment. Some ministries have resorted to using contractor tax deposits to meet payroll needs—a temporary fix that risks future instability if revenues do not recover or if the political deadlock continues. Despite holding over $100 billion in foreign reserves, experts caution that relying on this buffer without introducing structural reforms—such as revenue diversification or private sector revitalization—could jeopardize Iraq's financial sovereignty in the long term. In response to the stalemate, some policymakers have suggested adopting an emergency 'spending mechanism' to release funds for essential services, if the full budget cannot be passed. As the months pass without a resolution, the consequences are becoming more pronounced. Delayed salaries, frozen projects, and public disillusionment are eroding trust in state institutions. Unless the federal government moves decisively to separate budgetary planning from political infighting, the costs will continue to mount—not just in dinars, but in credibility and stability.

Exclusive: Iraq to submit 2025 budget to Parliament in July
Exclusive: Iraq to submit 2025 budget to Parliament in July

Shafaq News

time13 hours ago

  • Shafaq News

Exclusive: Iraq to submit 2025 budget to Parliament in July

Shafaq News/ The draft 2025 Iraqi budget will be submitted to the Council of Representatives at the beginning of July, an Iraqi MP confirmed on Wednesday. The member of the Parliament's Finance Committee, Moeen Al-Kadhimi, told Shafaq News that the Ministry of Finance has finalized its comments on the Federal Budget Law's tables and submitted them to the Council of Ministers for review. The goal is to assess the overall budget and compare it to last year's figures in light of this year's decline in revenue. He explained that the Ministry is currently preparing the final budget tables, pending the cabinet's response to its remarks. The 2025 budget bill is expected to be referred to Parliament early next month, once approved by the Council of Ministers. The Finance Committee believes the budget should be aligned with actual revenues and not exceed 140–150 trillion dinars (about $99,044B - $10.611B)—the range adopted in the 2023 and 2024 budgets, Al-Kadhimi noted. Since 2023, Iraq has operated under a three‑year Budget Law covering 2023–2025, approved by Parliament in June 2023. This law requires the government to submit detailed annual budget tables—including revenue estimates and expenditure allocations—for legislative review and implementation each year. However, delays in delivering the 2025 tables have effectively stalled budget execution, raising concerns ahead of anticipated early elections.

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