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Gold Subdued as Investors Focus on US Inflation Data

An employee at a gold shop in Khan El Khalili, Cairo (Reuters)
An employee at a gold shop in Khan El Khalili, Cairo (Reuters)
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Gold Subdued as Investors Focus on US Inflation Data

An employee at a gold shop in Khan El Khalili, Cairo (Reuters)
An employee at a gold shop in Khan El Khalili, Cairo (Reuters)

Gold prices struggled for momentum on Monday as investors looked forward to a key inflation report that could shed more light on the US central bank's next policy move.
Spot gold eased 0.13% to $2,427.86 per ounce by 0352 GMT, trading in a narrow $10 price range. US gold futures slipped 0.3% to $2,466.40.
"I don't think people will want to make big commitments ahead of the data," said Ilya Spivak, head of global macro, Tastylive.
The US consumer price index (CPI) data, due on Wednesday, is expected to show that headline and core prices rose 0.2% month-on-month.
"Further inflation progress reflected in the upcoming CPI data could see gold eye for a retest of its all-time high once more," said IG market strategist Yeap Jun Rong.
Currently, the market sees a 54% chance of a 50 basis point rate cut at the Federal Reserve's September meeting, according to the CME FedWatch Tool.
Non-yielding bullion's appeal tends to shine in a low interest rate environment.
Fed Governor Michelle Bowman softened her usually hawkish tone ever so slightly on Saturday, noting some further "welcome" progress on inflation even as she said inflation remains "uncomfortably above" the central bank's 2% goal.
Elsewhere, Palestinian militant group Hamas on Sunday asked mediators to present a plan based upon previous talks instead of engaging in new negotiations for a Gaza ceasefire deal, raising doubts about its participation in Thursday's meeting.
Among other metals, spot silver fell 0.3% to $27.36 per ounce, platinum shed 0.47% to $917.83 and palladium fell 0.2% to $903.48.

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Revenue Growth, New Projects Boost Profitability of Saudi Public Utility Companies

People walk in the lobby of the Saudi Stock Exchange. (AP)
People walk in the lobby of the Saudi Stock Exchange. (AP)
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Revenue Growth, New Projects Boost Profitability of Saudi Public Utility Companies

People walk in the lobby of the Saudi Stock Exchange. (AP)
People walk in the lobby of the Saudi Stock Exchange. (AP)

Public utility companies listed on the Saudi Stock Exchange (Tadawul) achieved a 15.76 percent growth in their net profits by the end of the first half of 2024, reaching SAR 6.56 billion ($1.75 billion), compared to SAR 5.67 billion ($1.51 billion) during the same period in 2023.

The companies recorded a 14-percent growth in their revenues during the same half, equivalent to SAR 5.79 billion ($1.54 billion), after achieving sales worth more than SAR 46.76 billion ($12.47 billion) during the first half of 2024, compared to SAR 40.98 billion ($10.93 billion) in the same period last year.

This growth in revenues and net profitability is a result of an increase in sales and revenues, the launch of new projects and rise in the number of subscribers and demand for services.

The sector includes six companies: Saudi Electricity Company, ACWA Power, Alkhorayef Water and Energy Technology, Marafiq, National Gas and Industrialization Company (GASCO), and Miyahuna.

According to the financial results announced on Tadawul, all companies in the sector achieved growth in profits, except for Marafiq, which recorded a decline in profits by 59.37 percent to SAR 108.13 million.

In comments to Asharq Al-Awsat, financial advisor at the Arab Trader Mohammad Al-Maymouni said that Alkhorayef Company has driven this boost in profitability by registering the highest growth rates, as a result of recovery in the areas of development, design and production.

ACWA Power had also a strong impact on the growth of the sector’s profits, Al-Maymouni noted, thanks to the increased activity of water and energy supply projects and the cost of maintenance revenues, which contributed to the overall rise in the company’s revenues.

The cost of energy and fuel, as well as financing costs and interest rates, are the greatest burden on the profits of companies in the sector as they contributed significantly to the decline in the profitability of Marafiq by 59 percent during the second quarter of 2024, he noted.

Al-Maymouni highlighted factors that will support the profitability of the sector, such as continuity of projects acquired by sector companies, infrastructure and wastewater development operations, and lower financing costs and interest rates during the coming quarters.