G20 Warns War Repercussions Exacerbate Global Economy Fragility

G20 meeting of finance ministers and central bank governors in Bangalore, India (Reuters)
G20 meeting of finance ministers and central bank governors in Bangalore, India (Reuters)
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G20 Warns War Repercussions Exacerbate Global Economy Fragility

G20 meeting of finance ministers and central bank governors in Bangalore, India (Reuters)
G20 meeting of finance ministers and central bank governors in Bangalore, India (Reuters)

Finance ministers of the world's largest economies on Saturday strongly condemned Moscow's war on Ukraine, with only China and Russia refusing to sign a joint statement.

India, the current chair of the Group of Twenty (G20), was reluctant to raise the issue of the war, but Western countries insisted they could not support any final statement that did not condemn it.

The lack of consensus among G20 members led India to issue a "chair's summary and outcome document," which summed up the two days of talks and noted disagreements.

"Most members strongly condemned the war in Ukraine and stressed that it is causing immense human suffering and exacerbating existing fragilities in the global economy," India said, noting supply chain disruptions, risks to financial stability, and persistent food and energy insecurity.

"There were other views and different assessments of the situation and sanctions," it added, referring to the measures taken by the US, European countries, and other countries to punish Russia for the invasion and limit its revenues.

The outcome was similar to a G20 summit in Bali last November when host Indonesia issued a final declaration acknowledging differences.

The G20, formed over two decades to tackle economic crises, has increasingly struggled to reach a consensus to issue an official end-of-meeting communique.

Indian Finance Minister Nirmala Sitharaman said that although there has not been a "communique but only an outcome statement," some progress has been made in having all the ministers on board.

German Finance Minister Christian Lindner said China's refusal to sign the declaration was "regrettable."

US Treasury Secretary Janet Yellen told Reuters that it was "necessary" for a statement to condemn Russia.

Two delegates told Reuters that Russia and China did not want the G20 platform to be used to discuss political matters.

Russia, a G20 but not G7 member, described its actions in Ukraine as a "special military operation" and avoided calling it an invasion or war.

India has maintained a largely neutral stance on the war, refraining from blaming Russia for the invasion, seeking a diplomatic solution, and boosting its purchases of Russian oil.

India and China were among the countries that abstained on Thursday when the UN overwhelmingly voted to demand Moscow withdraw its forces from Ukraine and stop fighting.

Besides the G7 nations, the G20 bloc includes countries such as Australia, Brazil, and Saudi Arabia.

Japanese Finance Minister Shunichi Suzuki told reporters that it's becoming difficult for the G20 to engage in constructive discussion because of Russia's invasion of Ukraine, which is an act that shakes the foundations of the global order.

The International Monetary Fund (IMF) and the World Bank met on the sidelines of the G20 summit with China, India, Saudi Arabia, and the G7.

The meeting addressed restructuring debt for distressed economies, but there too, were disagreements among members.

Yellen said there were no "deliverables" from the meeting, which was primarily organizational.

Additional discussions are scheduled around the time of the IMF and World Bank spring meetings in April.

Pressure is mounting on China, the world's largest bilateral creditor, and other countries to offer a significant cut in loans to struggling developing countries.



Gold Gains over 1% as Dollar, Yields Ease; Spotlight on Trade

A gold seller arranges gold bracelets at a gold shop in Bangkok's Chinatown, Thailand, January 27, 2025. REUTERS/Chalinee Thirasupa/ File Photo
A gold seller arranges gold bracelets at a gold shop in Bangkok's Chinatown, Thailand, January 27, 2025. REUTERS/Chalinee Thirasupa/ File Photo
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Gold Gains over 1% as Dollar, Yields Ease; Spotlight on Trade

A gold seller arranges gold bracelets at a gold shop in Bangkok's Chinatown, Thailand, January 27, 2025. REUTERS/Chalinee Thirasupa/ File Photo
A gold seller arranges gold bracelets at a gold shop in Bangkok's Chinatown, Thailand, January 27, 2025. REUTERS/Chalinee Thirasupa/ File Photo

Gold prices gained over 1% on Monday as the dollar and US bond yields weakened amid uncertainty over trade talks ahead of a US deadline of August 1 for countries to strike deals or face more tariffs.

Spot gold was up 1.2% at $3,390.79 per ounce at 9:52 ET (1352 GMT). US gold futures were up 1.3% to $3,402.40.

The US dollar index was down 0.4%, making dollar-denominated gold more affordable for buyers using other currencies, while benchmark 10-year U.S. Treasury yields hit a more than one-week low, Reuters reported.

"With the August 1st deadline looming, it brings a level of uncertainty to the market and that certainly is supportive," said David Meger, director of metals trading at High Ridge Futures.

The European Union is exploring a broader set of possible counter-measures against the US as prospects for an acceptable trade agreement with Washington fade, according to EU diplomats.

On the interest rate front, traders are pricing about a 63% chance of a rate cut in September, according to the CME FedWatch Tool.

U.S. Treasury Secretary Scott Bessent said the entire Federal Reserve needed to be examined as an institution and whether it had been successful.

Talk of earlier than expected U.S. rate cuts is building, with speculation around a possible replacement of Fed Chair Jerome Powell and reshaping of the Fed adding to market jitters, Meger said.

Gold is considered a hedge against uncertainty and tends to perform well in a low interest rate environment.

Data showed that the world's leading gold consumer, China, brought in 63 metric tons of the precious metal last month, the lowest amount since January. Its imports of platinum in June fell 6.1% from the prior month.

Spot silver gained 1.8% to $38.86 per ounce, platinum rose 2.2% to $1,453.17 and palladium was 3.5% higher at $1,284.46.