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Gold Eases as Dollar Firms; Focus on Fed Minutes

A view of smelted gold bars at a smelting facility in Accra, Ghana August 22, 2024. REUTERS/Francis Kokoroko
A view of smelted gold bars at a smelting facility in Accra, Ghana August 22, 2024. REUTERS/Francis Kokoroko
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Gold Eases as Dollar Firms; Focus on Fed Minutes

A view of smelted gold bars at a smelting facility in Accra, Ghana August 22, 2024. REUTERS/Francis Kokoroko
A view of smelted gold bars at a smelting facility in Accra, Ghana August 22, 2024. REUTERS/Francis Kokoroko

Gold prices edged lower on Tuesday, pressured by a stronger dollar, while investors awaited minutes of the Federal Reserve's latest policy meeting and more economic data for insights on the US interest rate outlook.
Spot gold fell 0.3% to $2,634.69 per ounce by 0728 GMT. US gold futures lost 0.5% to $2,653.90, Reuters reported.

The dollar index hovered near a seven-week high, making bullion more expensive for holders of other currencies.
Gold has lost some momentum due to the rising dollar and bond yields, but downside risks may be limited by global conflicts that favor safe-haven assets, said Tim Waterer, chief market analyst at KCM Trade.
Hezbollah fired rockets at Israel's third-largest city, Haifa, while Israel appeared ready to expand its offensive into Lebanon, marking one year since the Hamas attack that ignited the Gaza war.
Bullion is considered a safe investment during times of political uncertainty.
Investors are focused on the minutes of the Fed's latest policy meeting, due on Wednesday, followed by the US Consumer Price Index on Thursday and the Producer Price Index data on Friday. Several Fed officials are also lined up to speak throughout the week.
"Looking ahead, if we see any upside surprises in the US CPI numbers this week, this could further boost the dollar and pressure gold," Waterer said.
According to the CME FedWatch tool, markets are no longer pricing in a 50-basis-point reduction at the Fed's November meeting after last week's strong jobs report. They now see an 88% chance for a 25-bp cut.
Meanwhile, St. Louis Fed President Alberto Musalem expressed support for more rate cuts, emphasizing that the economy's performance will guide policy.
Spot silver lost 2.02% to $31.08 per ounce. Platinum was down 1% to $962.90 and palladium fell nearly 3% to $994.00.
Elsewhere, China said it was "fully confident" of meeting its economic targets, but refrained from introducing stronger fiscal steps to get the economy back on track.

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BP Abandons Goal to Cut Oil Output, Resets Strategy

The ogo of British Petrol BP is seen at a petrol station in Pienkow, Poland, June 8, 2022 (Reuters)
The ogo of British Petrol BP is seen at a petrol station in Pienkow, Poland, June 8, 2022 (Reuters)
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BP Abandons Goal to Cut Oil Output, Resets Strategy

The ogo of British Petrol BP is seen at a petrol station in Pienkow, Poland, June 8, 2022 (Reuters)
The ogo of British Petrol BP is seen at a petrol station in Pienkow, Poland, June 8, 2022 (Reuters)

BP has abandoned a target to cut oil and gas output by 2030 as CEO Murray Auchincloss scales back the firm's energy transition strategy to regain investor confidence, three sources with knowledge of the matter said.

When unveiled in 2020, BP's strategy was the sector's most ambitious with a pledge to cut output by 40% while rapidly growing renewables by 2030.

BP scaled back the target in February last year to a 25% reduction, which would leave it producing 2 million barrels per day at the end of the decade, as investors focused on near-term returns rather than the energy transition.

The London-listed company is now targeting several new investments in the Middle East and the Gulf of Mexico to boost its oil and gas output, the sources told Reuters.

Auchincloss took the helm in January but has struggled to stem the drop in BP's share price, which has underperformed its rivals so far this year as investors question the company's ability to generate profits under its current strategy.

The company continues to target net zero emissions by 2050.

“As Murray said at the start of year... the direction is the same – but we are going to deliver as a simpler, more focused, and higher value company,” a BP spokesperson said.

Auchincloss will present his updated strategy though in practice BP has already abandoned it, the sources said. It is unclear if BP will provide new production guidance.

Back to the Middle East, the sources said BP is currently in talks to invest in three new projects in Iraq, including one in the Majnoon field.

BP holds a 50% stake in a joint venture operating the giant Rumaila oilfield in the south of the country, where it has been operating for a century.

In August, BP signed an agreement with the Iraqi government to develop and explore the Kirkuk oilfield in the north of the country, which will also include building power plants and solar capacity.

Unlike historic contracts which offered foreign companies razor-thin margins, the new agreements are expected to include a more generous profit-sharing model, sources have told Reuters.

BP is also considering investing in the re-development of fields in Kuwait, the sources added.

In the Gulf of Mexico, BP has announced it will go ahead with the development of Kaskida, a large and complex reservoir, and the company also plans to green light the development of the Tiber field.

It will also weigh acquiring assets in the prolific Permian shale basin to expand its existing US onshore business, the sources said.