عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Gold Scales 2-week High as Fed Signals Likely Sept Rate Cut

Gold bullion displayed in a store in the German city of Pforzheim (dpa)
Gold bullion displayed in a store in the German city of Pforzheim (dpa)
TT
TT

Gold Scales 2-week High as Fed Signals Likely Sept Rate Cut

Gold bullion displayed in a store in the German city of Pforzheim (dpa)
Gold bullion displayed in a store in the German city of Pforzheim (dpa)

Gold prices hit a two-week high on Thursday as US Federal Reserve Chair Jerome Powell opened the door to cutting interest rates as early as September.
Spot gold was little changed at $2,445.39 per ounce, as of 0650 GMT, after hitting its highest since July 18 earlier in the session. Prices were just $38 shy of the record high of $2,483.60 scaled on July 17.
US gold futures firmed 0.7% to $2,490.10, Reuters said.
"The trend for gold remains bullish and prices should hit $2,500 this year as the Fed lowers interest rates," said Peter Fung, head of dealing at Wing Fung Precious Metals.
Fed Chair Jerome Powell said on Wednesday rates could be cut as soon as September if the US economy follows its expected path, putting the central bank near the end of a more than two-year battle against inflation.
Zero-yield gold tends to thrive in a low interest rate environment.
"Gold bugs may want to warrant some caution above $2,500, given gold's reluctance to hold onto gains around these levels," City Index senior analyst Matt Simpson said.
Market focus shifts to Friday's US payrolls report.
"If the data comes in much hotter than expected, that could dent gold as we head towards the weekend," Simpson added.
Elsewhere, Hamas leader Ismail Haniyeh was assassinated in the Iranian capital Tehran early on Wednesday morning, an attack that drew threats of revenge on Israel and fueled further concerns that the conflict in Gaza was turning into a wider Middle East war.
Geopolitics is increasingly more supportive for gold in the medium and long term, Nicky Shiels, head of metals strategy at MKS PAMP SA said in a note.
Spot silver fell 0.4% to $28.92, platinum lost 0.4% to $972.35 and palladium eased 0.2% at $923.60.
Key metals consumer China's manufacturing activity in July shrank for the first time in nine months, a private sector survey showed.

Most Viewed

 
 
Business

BP Nears Deals for Oil Fields, Curbs on Gas Flaring in Iraq

British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
TT
TT

BP Nears Deals for Oil Fields, Curbs on Gas Flaring in Iraq

British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)

Iraq and British oil giant BP are set to finalize a deal by early February to develop four oil fields in Kirkuk and curb gas flaring, Iraqi authorities announced Wednesday.

The mega-project in northern Iraq will include plans to recover flared gas to boost the country's electricity production, they said.

Gas flaring refers to the polluting practice of burning off excess gas during oil drilling. It is cheaper than capturing the associated gas.

The Iraqi government and BP signed a new memorandum of understanding in London late Tuesday, as Prime Minister Mohammed Shia al-Sudani and other senior ministers visit Britain to seal various trade and investment deals.

"The objective is to enhance production and achieve optimal targeted rates of oil and gas output," Sudani's office said in a statement.

Iraq's Oil Minister Hayan Abdel Ghani told AFP after the new accord was signed that the project would increase the four oil fields' production to up to 500,000 barrels per day from about 350,000 bpd.

"The agreement commits both parties to sign a contract in the first week of February," he said.

Ghani noted the project will also target gas flaring.

Iraq has the third highest global rate of gas flaring, after Russia and Iran, having flared about 18 billion cubic meters of gas in 2023, according to the World Bank.

The Iraqi government has made eliminating the practice one of its priorities, with plans to curb 80 percent of flared gas by 2026 and to eliminate releases by 2028.

"It's not just a question of investing and increasing oil production... but also gas exploitation. We can no longer tolerate gas flaring, whatever the quantity," Ghani added.

"We need this gas, which Iraq currently imports from neighboring Iran. The government is making serious efforts to put an end to these imports."

Iraq is ultra-dependent on Iranian gas, which covers almost a third of Iraq's energy needs.

However, Teheran regularly cuts off its supply, exacerbating the power shortages that punctuate the daily lives of 45 million Iraqis.

BP is one of the biggest foreign players in Iraq's oil sector, with a history of producing oil in the country dating back to the 1920s when it was still under British mandate.

According to the World Bank, Iraq has 145 billion barrels of proven oil reserves -- among the largest in the world -- amounting to 96 years' worth of production at the current rate.