Gold Futures Hit Record High as U.S. Import Tariff Sparks Turmoil — Commodities Roundup
MARKET MOVEMENTS:
- Brent crude oil is down 0.9% to $65.93 a barrel
- European benchmark gas is down 1.1% to 32.60 euros a megawatt-hour
- Gold futures are up 0.9% to $3,484 a troy ounce
- LME three-month copper futures are up 0.7% at $9,739 a metric ton
TOP STORY:
Gold Futures Hit Record High as U.S. Import Tariff Sparks Turmoil
Gold climbed to a record high on Friday after a U.S. government agency clarified that import tariffs would apply to one-kilo gold bars, sparking turmoil in the global bullion market.
In afternoon trade in Europe, futures rose 1% to $3,488.90 a troy ounce after reaching a peak of $3,534.20 earlier in the session. Prices are on track for a weekly gain of 2.4%.
Gold bars from Switzerland, the world's largest gold refining hub, previously entered the U.S. duty free. But in a July 31 ruling in response to a Swiss refinery's subsidiary, the U.S. Customs and Border Protection said gold bars would now be subject to President Trump's reciprocal tariffs, which were 10% on Switzerland at the time. Those tariffs have now risen to 39% as of Thursday.
OTHER STORIES:
ExxonMobil Begins Production at Fourth Offshore Guyana Project
ExxonMobil said its Guyana operation started production at Yellowtail, the fourth oil development in Guyana's offshore Stabroek block.
Yellowtail's One Guyana floating production storage and offloading, or FPSO, vessel joins the Destiny, Unity, and Prosperity FPSOs, bringing total installed capacity in Guyana to above 900,000 barrels of oil a day.
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Gold Tariffs: Why Are They a Problem? How Could the Market React?
The U.S. has unexpectedly slapped tariffs on imports of some gold bars, according to the Financial Times, roiling the market for the precious metal.
Why is this disruptive?
The global gold market uses futures traded on metals-trading exchange Comex to hedge its positions. That assumes metals can easily be imported to Comex warehouses in the U.S. to settle contracts if necessary, UBS strategist Joni Teves says.
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Calfrac Well Services Slashes Workforce, Reduces North America Footprint on Global Uncertainty
Calfrac Well Services has reduced its footprint in North America in response to softening oil-and-gas activity after second-quarter results.
The Calgary, Alberta-based oilfield services cited on Friday oil prices that are affected by geopolitical uncertainty and tensions, as well as oil-supply increases, and shifting U.S. trade and tariff policies.
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Emera Profit Flat in 2Q
Emera's second-quarter profit was flat as Florida utilities offset softness in Canadian market.
The Canadian energy holding company on Friday posted net income of 135 million Canadian dollars (US$98.2 million), or C$0.45 a share, compared with C$129 million, or C$0.45 a share, in the comparable quarter a year ago.
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Fortescue's Beefed-Up $2 Billion Loan Reflects China Bet on Energy Goals
Fortescue's new $2-billion yuan-denominated loan is roughly four times what the iron-ore miner initially sought from lenders, reflecting strong demand among Chinese banks to put cash toward decarbonization, executives of the Australian company said in an interview.
Perth-based Fortescue, the world's fourth largest producer of steel ingredient iron ore, on Friday said it has agreed to a syndicated term loan worth 14.2 billion yuan, or around $2 billion, with a group of Chinese, Australian and other lenders.
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Food Prices Rose in July, Driven by Meat and Vegetable Oils
World food prices rose last month, driven by meat and vegetable oils despite declines in cereal, dairy and sugar prices, the Food and Agriculture Organization of the United Nations said.
The FAO's food price index, which tracks global prices for a basket of staple foods, averaged 130.1 points in July, a 1.6% increase from June and 7.6% higher than a year earlier. The index remains 18.8% below its peak reached in March 2022 after Russia's invasion of Ukraine.
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Waste Connections Gets TSX Greenlight to Buy Back Up to 5% of Float
Waste Connections plans to launch a share-repurchase program to buy back up to 5% of its issued and outstanding common shares over the course of a year.
The waste services company said on Friday that the Toronto Stock Exchange has approved its plan to buy back up to about 12.9 million shares for cancellation.
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Boralex Logs 2Q Loss on Higher Financing Costs
Boralex swung to a loss in the second quarter, missing expectations of a slight decline, as financing costs hit earnings.
The Canadian renewable energy company on Friday posted a net loss of 4 million Canadian dollars (US$2.9 million), or C$0.10 a share, compared with a profit of C$17 million, or C$0.10 a share, in the comparable quarter a year ago.
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Plains All American Posts Lower 2Q Profit, Revenue
Plains All American Pipeline logged lower profit and revenue in the second quarter, as it prepared to sell off its Canadian natural gas liquids business.
The Houston-based midstream energy company on Friday posted net income of $297 million, or 21 cents a unit, compared with $330 million, or 26 cents a unit, a year earlier.
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Wendy's Cuts Outlook as U.S. Sales Falter — Update
Wendy's cut its full-year earnings and sales outlook after a weak performance among its U.S. restaurants ate into revenue during the second quarter.
The burger chain is facing more competition and more dynamic consumer behavior than it had expected when the year started, according to Ken Cook, who stepped in as the company's interim chief executive after Kirk Tanner departed to lead Hershey last month.
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Barrick Sells Alturas Project in Chile for $50 Million
Barrick Mining is selling a project in Chile for $50 million as the Canadian miner tightens its focus and looks to strengthen its balance sheet.
The Toronto-based company said Friday it reached an agreement to sell its Alturas project to a subsidiary of Boroo Pte. (Singapore). Boroo will take control of the project by buying all the shares in Barrick's Minera Salitrales, a subsidiary that hold the project.
MARKET TALKS:
Grains Up as Traders Look Toward WASDE Report — Market Talk
1026 ET - Grain traders are looking ahead to next week's WASDE report from the USDA. Yields and production is expected to rise from the previous month, with analysts debating how much they climb. Soybean yields might show the biggest uptick, Karen Braun of Zaner Ag Hedge says. "If I had to vote for a potential yield surprise scenario this year, it would be soybean yield to the high side," Braun says in a note. She points out that the USDA has raised its soybean yield forecast in its August report from the prior month in eight of the past 10 years, with the largest of those upticks being an increase of 7% in 2020. In morning trade, most-active corn is up 0.5%, soybeans are flat, and wheat is up 0.6%. (kirk.maltais@wsj.com)
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U.S. Natural Gas Futures Contained as Summer Advances — Market Talk
0935 ET - U.S. natural gas futures are little changed, struggling to gain traction despite this week's small inventory build and jump in LNG feedgas flows. "With storage surpluses to challenge 200 Bcf above five-year norms next week and the heart of hurricane season looming, natural gas may retest support after next week's heat wave fades and it settles into a new late-summer trading range," Eli Rubin of EBW Analytics says in a note. "While daily cooling demand will continue higher into early next week, forecasts have receded across the Gulf Coast and Southeast." Nymex natural gas is off 0.3% at $3.057/mmBtu. (anthony.harrup@wsj.com)
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Oil Futures Edge Up After String of Losses — Market Talk
0908 ET - Oil futures pick up cautiously while on track for steep weekly losses after six straight sessions in the red. Much trading this week has focused on India's response to U.S. tariffs over its purchases of Russian oil, and to what extent India will cut back on those purchases. Plans for a Trump-Putin meeting have also taken off some of the upside. "Flat price and spreads are sending surprisingly bearish signals," Neil Crosby of Sparta Commodities says in a note. "It does seem like spreads should be reacting to evidence that various Indian refiners are fairly active on the spot crude market, both light and medium quality and from a variety of origins." WTI is up 0.4% at $64.16 and Brent is up 0.5% at $66.78. (anthony.harrup@wsj.com)
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Cobalt Price Spike Unlikely Despite Congo Export Ban — Market Talk
1353 GMT - Cobalt prices aren't likely to surge close to the highs recorded in 2022 even as the world's top producer, the Democratic Republic of Congo, extends the ban on exports, Oxford Economics Africa says. The ban, initially announced in February, will remain in place until September and is partly responsible for the 18% cobalt-production slump, to 41,720 metric tons in the first quarter, OEA notes. Congo accounts for over 70% of the world's cobalt production. "If the government reopens cobalt exports in 4Q 2025, it will likely introduce export quotas to prevent market flooding and subsequent price crashes," OEA says. "Ongoing production during the ban could also suggest a post-expiration supply surge, which will renew downward price pressure." (Nicholas.Bariyo@wsj.com;@Nicholasbariyo)
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Economic Hit of U.S. Tariffs on Swiss Goods Could Be Severe, Chocolate Trade Group Says — Market Talk 1054 GMT - The economic impact of U.S. tariffs on Swiss goods is likely to be severe, the Association of Swiss Chocolate Manufacturers, or Chocosuisse, says in a statement. The country is subject to 39% duties in the U.S., a higher rate than initially set by President Trump. Swiss politicians must implement an effective package of measures to provide relief to affected companies and reinforce the country's long-term attractiveness as a business location, the trade organization says. For many member companies, the new tariff rate represents a serious challenge and, without mitigating measures, will jeopardize sales and jobs in the medium term, it says. A coordinated and united approach by the Federal Council and the business community is essential, the organization adds. (andrea.figueras@wsj.com)
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Palm Oil Edges Higher Ahead of Key Data — Market Talk
1039 GMT - Palm oil ended slightly higher as traders awaited key data. Official palm oil supply and demand data from the Malaysian Palm Oil Board are due Monday. The country's July exports are expected to fall and put downward pressure on prices. However, the pressure could be limited, given declining exports from Indonesia as well, Ruida Futures analysts say in a research note. Indonesia's B40 mandate, which requires a 40% mix of palm oil in biodiesel, has left the country's palm oil exports in short supply, they add. The Bursa Malaysia Derivatives contract for October delivery ended 14 ringgit higher at 4,254 ringgit a ton. (sherry.qin@wsj.com)
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Copper Rises Amid Supply Concerns, Rising LME Inventory — Market Talk
1038 GMT - Copper prices edge higher in midday trade as the market weighs persistent supply concerns and the normalization of LME inventory levels, which have been rising following the announcement of U.S. tariffs. LME three-month copper is up 0.3% to $9,700.50 a metric ton. "The suspension of Codelco's El Teniente copper operation may not be lifted for months until a comprehensive review process is completed," analysts at ANZ say. "This comes on the back of other unplanned disruptions, such as the suspension of operations at the Kamoa-Kakula underground mine." Meanwhile, China's July trade data was broadly neutral for copper prices, with imports of both unwrought copper and copper ores rising, suggesting strong demand and high production, according to Commerzbank Research. (giulia.petroni@wsj.com)
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Gold Stocks Rise on Report of U.S. Tariffs on Gold Bars — Market Talk
0808 GMT - U.K. and South African gold mining stocks rise in early morning trade after gold futures hit a record high on a Financial Times report that the U.S. has placed tariffs on imports of one-kilo gold bars. In early trade, futures rose 1% to $3,489.50 a troy ounce after reaching a peak of $3,534.20 earlier in the session. In London, Hochschild Mining is up 3.1% and Fresnillo rises 2.4%. In Johannesburg, Sibanye-Stillwater rises 5.2% and Gold Fields is up 1.5%.(adam.whittaker@wsj.com)
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Oil Set for Sharp Weekly Loss on Trump-Putin Meeting News, U.S. Tariffs
0806 GMT - Oil prices are on track for sharp weekly losses on news that President Trump and Russian President Vladimir Putin could meet as soon as next week and as U.S. tariffs weigh on the global economic outlook. In early trade, Brent crude and WTI are up 0.1% to $66.50 and $63.90 a barrel, respectively, but are down 4.6% and 7.7% on the week. A meeting to discuss a Russia-Ukraine peace deal would significantly reduce the geopolitical risk premium and possibly affect Trump's secondary tariffs on India, easing market anxiety over supplies. Meanwhile, fresh U.S. tariffs on major trade partners and weak U.S. economic data are fueling concerns over demand just as OPEC+ moves to fully unwind its largest tranche of voluntary output cuts. (giulia.petroni@wsj.com)
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Iron Ore Edges Higher on Solid Demand — Market Talk
0256 GMT - Iron ore prices edge higher in early Asia trade, supported by solid demand. Brazil reported that its exports of the steel-making raw material in July rose 5% from a year earlier to 41.11 million tons, a sign of growing seaborne flows to the market, ANZ Research says in a note. Chinese trade data showed that Chinese steel mills' appetite remains strong, they say. "Healthy mill margins and low steel inventories motivated mills to restock," they add. The most-traded iron ore contract on the Dalian Commodity Exchange gains 0.1% to CNY774.0 a ton. (sherry.qin@wsj.com)
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Gold's Price Resilience May Flag Hidden Market Risks — Market Talk
0229 GMT - Gold's price resilience could be flagging hidden market risks, say strategists at State Street Investment Management in a note. The precious metal is down just 3%-4% from all-time highs, despite some recovery in equities since April and a decline in asset market volatility. Gold bullion prices have likely formed a new baseline above $3,000/oz, they add. Further depreciation in the U.S. dollar will likely support a gold rally to the strategists' bull scenario of $3,500/oz-$3,900/oz. Other critical macro factors for the precious metal include Fed policy and U.S. trade talks. "Risks still seem skewed towards higher-versus-lower gold prices into year-end," they say. Spot gold is 0.5% lower at $3,384.89/oz.(megan.cheah@wsj.com)
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Gold May Have More Room to Run — Market Talk
0204 GMT - Gold's rise this year still has more room to run, ING's Ewa Manthey says in a report. "Potential Fed rate cuts, along with continued central bank buying and ETF inflows, could send gold to fresh highs," the commodities strategist says. Traders are pricing in a 93% probability that the Fed will lower rates at next month's meeting, Manthey says. Central-bank buying also remains solid, Manthey says, noting that data from the World Gold Council showed central banks added 166 tons to global official gold reserves in 2Q. Moreover, gold-backed ETFs saw strong investment in 2Q. ING raises its forecasts for gold to $3,400/oz from $3,200/oz for 3Q and to $3,450/oz from $3,200 for 4Q. (ronnie.harui@wsj.com)
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Copper Gains Amid Supply Disruptions — Market Talk
0130 GMT - Copper edges higher in early Asian trade, with the three-month LME contract up 0.1% at $9,692.50/ton. Copper prices found support from renewed supply-side issues, write ANZ Research analysts in a note. Unplanned disruptions, as a share of overall copper production, increased to 5.7% last year from just under 5% in 2014, highlighting the increasingly difficult operating conditions the industry is facing, they note. ANZ sees spot prices picking up in the short term due to disruptions in supply. The constrained supply growth could drive longer-term tightness in the copper market, it adds. (megan.cheah@wsj.com)
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