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Safe-haven Gold Firms on US Recession Fears, Rate-cut Bets

Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/File Photo
Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/File Photo
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Safe-haven Gold Firms on US Recession Fears, Rate-cut Bets

Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/File Photo
Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/File Photo

Gold prices drifted higher on Monday, aided by worries that the United States could be headed for a recession and rising bets that the Federal Reserve will likely need to start cutting interest rates aggressively.
Spot gold rose 0.14% to $2,446.83 per ounce, as of 0519 GMT, after falling 1% earlier in the session, Reuters said.
US gold futures rose 0.8% to $2,488.50.
"Gold is picking up safe-haven flows, with financial markets in a risk-averse mindset to start the week," said Tim Waterer, chief market analyst at KCM Trade.
"Markets are in a flux about the US economic outlook and whether rate cuts will arrive quickly enough from the Fed."
Share markets tumbled and bonds rallied in Asia as US recession fears sent investors rushing from risk assets.
Data on Friday showed that US job growth in July fell short of expectations, with the unemployment rate rising to 4.3%, pointing to possible weakness in the labor market and greater vulnerability to recession.
Traders are pricing a more than 70% chance of the US central bank lowering rates by 50 basis points in September, compared with an 11.5% chance a week earlier, according to the CME FedWatch tool.
Lower interest rates reduce the opportunity cost of holding a non-yielding bullion.
Meanwhile, on Friday, Richmond Fed President Thomas Barkin maintained a cautious outlook, stating he is not ready to adjust his monetary policy.
Investors will keep a tab on the final July S&P Global services and ISM on-manufacturing PMI due later in the day.
They also kept a close eye on the Middle East conflict, with the Pentagon announcing that the US military will deploy additional fighter jets and Navy warships to the Middle East to strengthen defense against threats from Iran and its allies, Hamas and Hezbollah.
Spot silver was down 0.4% at $28.43 per ounce, platinum fell 1.23% to $946.10 and palladium declined 0.9% to $882.09.

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Business

Airlines Hike Ticket Prices as Iran War Propels Fuel Costs

A Qantas logo is visible on the tail of an airplane at an airport in Sydney, Australia, September 18, 2025. (Reuters)
A Qantas logo is visible on the tail of an airplane at an airport in Sydney, Australia, September 18, 2025. (Reuters)
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Airlines Hike Ticket Prices as Iran War Propels Fuel Costs

A Qantas logo is visible on the tail of an airplane at an airport in Sydney, Australia, September 18, 2025. (Reuters)
A Qantas logo is visible on the tail of an airplane at an airport in Sydney, Australia, September 18, 2025. (Reuters)

Australia's Qantas Airways , Scandinavia's SAS and Air New Zealand announced airfare hikes on Tuesday, blaming an abrupt spike in the cost of fuel caused by the Middle East conflict.

Jet fuel prices, which were around $85 to $90 per barrel before US-Israeli strikes on Iran, have soared to between $150 and $200 per barrel in recent days, New Zealand's flag carrier said as it suspended its financial outlook for 2026 due to uncertainty over the conflict.

The war, which disrupted shipping via the world's most vital oil export route, has sent oil prices surging, upending global travel, pushing airline tickets on some routes sky-high, and sparking fears of a deep travel slump that could lead to widespread grounding of planes.

"Increases of this magnitude make it necessary to react in order to maintain stable and reliable operations," an SAS spokesperson said in a statement to Reuters, adding it had implemented a "temporary price adjustment".

The largest Scandinavian airline said last ‌year it had temporarily ‌adjusted its fuel hedging policy due to uncertain market conditions and that it had no ‌fuel ⁠consumption hedged for the ⁠following 12 months.

While several Asian and European airlines, including Lufthansa and Ryanair, have oil hedging in place, securing a part of their fuel supplies at fixed prices, Finnair warned that even the availability of fuel could be at risk if the conflict dragged on.

"A prolonged crisis could affect not only the price of fuel but also its availability, at least temporarily," a Finnair spokesperson said, adding that it had not seen this happening yet. It had hedged over 80% of its first-quarter fuel purchases.

AIRSPACE CHAOS IN THE MIDDLE EAST

Highlighting the airspace chaos in the Middle East, planes arriving in Dubai were briefly placed in a ⁠holding pattern on Tuesday due to a potential missile attack, flight tracking service Flightradar24 said on X. ‌The planes eventually landed.

Qantas said in addition to increasing international fares, it was exploring ‌options to redeploy capacity to Europe as airlines and passengers seek to evade disruptions in the Middle East, where drone and missile fire have ‌curtailed flights.

Airfares have soared on Asia-Europe routes due to airspace closures and capacity constraints, and Hong Kong's Cathay Pacific Airways said on ‌Tuesday it was adding extra flights to London and Zurich in March.

Air New Zealand said it had raised one-way economy fares by NZ$10 ($6) on domestic routes, NZ$20 on short-haul international services and NZ$90 on long-haul, with more adjustments to prices and schedules possible if jet fuel costs remain elevated.

Hong Kong Airlines said on its website it would raise its fuel surcharges by up to 35.2% from Thursday, with the sharpest increase on flights between ‌Hong Kong and the Maldives, Bangladesh and Nepal.

AIRLINE SHARES STABILISE AFTER SELLOFF

Some airline stocks rose and oil prices fell to around $90 a barrel on Tuesday from a high of $119 on Monday ⁠after US President Donald Trump said ⁠on Monday the war could be over soon. When markets opened in Europe, airline shares were up between 4% and 7%.

In Asia, airline shares showed signs of stabilising, with Qantas closing up 0.5%, Korean Air Lines rising 3% and Cathay Pacific up 3.6%. All had recorded sharp declines on Monday.

Fuel is the second-largest expense for air carriers after labor, typically accounting for a fifth to a quarter of operating expenses.

CONFLICTS SHRINKING AVAILABLE AIRSPACE

In addition to high fuel costs, tightening airspace also threatens to derail the global travel industry, as pilots reroute to avoid the Middle East conflict and capacity on popular routes fills up.

Emirates, Qatar Airways and Etihad typically jointly account for about one-third of the passenger traffic between Europe and Asia and fly more than half of all passengers from Europe to Australia, New Zealand and nearby Pacific Islands, according to Cirium.

European airlines have already struggled with the shortage of available airspace created by the war in Ukraine, with many avoiding Russian airspace and flying longer international routes. Now, with even less available airspace, they say their business has become even more challenging.

Business

Aramco Sees ‘Catastrophic Consequences’ for Oil Markets if Hormuz Strait Remains Blocked

President and CEO of Saudi's Aramco, Amin Nasser, speaks during the Future Investment Initiative (FII) in Riyadh, Saudi Arabia October 29, 2024. (Reuters)
President and CEO of Saudi's Aramco, Amin Nasser, speaks during the Future Investment Initiative (FII) in Riyadh, Saudi Arabia October 29, 2024. (Reuters)
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Aramco Sees ‘Catastrophic Consequences’ for Oil Markets if Hormuz Strait Remains Blocked

President and CEO of Saudi's Aramco, Amin Nasser, speaks during the Future Investment Initiative (FII) in Riyadh, Saudi Arabia October 29, 2024. (Reuters)
President and CEO of Saudi's Aramco, Amin Nasser, speaks during the Future Investment Initiative (FII) in Riyadh, Saudi Arabia October 29, 2024. (Reuters)

Saudi Arabia's Aramco , the world's top oil exporter, said on Tuesday there would be "catastrophic consequences" for the world's oil markets if the Iran war continues to disrupt shipping in the Strait of Hormuz.

Oil shipments have been largely blocked from using the shipping artery, where normally roughly 20% of the world's oil would pass through daily. Iran's Revolutionary Guards said on Tuesday they would not allow "one liter of oil" to be shipped from the Middle East if US and Israeli attacks continue.

"There would be catastrophic consequences for the world's oil markets and the longer the disruption goes on ... the more drastic the consequences for the global economy," Aramco CEO Amin Nasser told reporters on an earnings call.

"While we have faced disruptions in the past, this one by far is the biggest crisis the region's oil and gas industry has faced."

WIDE RANGE OF SECTORS MAY BE HIT

The crisis has not only ‌upended the shipping ‌and insurance sectors, but it also promises to have drastic domino effects on aviation, agriculture, automotive ‌and ⁠other industries, he added.

Global ⁠crude benchmark Brent, which rocketed to a more than three-year high of nearly $120 a barrel on Monday, was trading around $92 on Tuesday following comments by US President Donald Trump predicting the war could end soon.

Trump, however, warned that the US would hit Iran much harder if it blocked exports from the vital energy-producing region.

He has also said the US Navy could escort ships in the Gulf to guarantee safe passage. But the Navy's capacity to do that is unclear, with some vessels already engaged in strikes against Iran and shooting down its missiles.

Asked about US Navy escorts and whether they were possible on the scale required, Nasser said there are sizable volumes involved, ⁠adding that Aramco's customers assume the risk of delivery.

"Of course, we would support any actions ‌or measures that would help to deliver our products to our customers, to ‌the global market," he said.

NO EXPORTS FROM THE GULF

Nasser noted global inventories of oil ‌were at a five-year low and said the crisis will lead to drawdowns at a faster rate, adding that it was critical that shipping in the strait resumed.

"Unfortunately, for global markets, most of the spare capacity is in this region," Nasser told analysts on a call, noting that incremental demand throughout the year will keep the market tightly balanced.

At present, Aramco is not exporting oil from the Gulf as ships cannot load ‌cargoes there. But the company, which does not disclose its exact crude output, is meeting the majority of its customers' needs, he said, partly by tapping into global inventories.

"Now, that ⁠cannot be used - that inventory - ⁠for an extended period of time, but for the time being, we are capitalizing on it," he said.

The East-West pipeline is, meanwhile, being used to transport mostly Arab Light and some Arab Extra Light crude grades to the Red Sea port of Yanbu. The pipeline, which has more than doubled its initial capacity, is expected to reach its full capacity of 7 million barrels per day in the next couple of days as customers re-route, Nasser said.

"Even with our ability to export through the western region, you're talking about close to 350 million barrels of disruptions that will come off the market," he said.

In addition to the pipeline, Aramco is also able to direct crude towards domestic demand, he noted. Close to 2 million bpd of the pipeline's 7 million bpd capacity is going to western domestic refineries, which are net exporters of products, Nasser added.

A small fire from an attack last week on Aramco's Ras Tanura refinery, its largest domestically, was quickly extinguished and brought under control, Nasser said, adding that the refinery was in the process of being restarted.

Business

Saudi Economy Records Strongest Growth in Two Years in 2025

The Saudi capital, Riyadh (Reuters) 
The Saudi capital, Riyadh (Reuters) 
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Saudi Economy Records Strongest Growth in Two Years in 2025

The Saudi capital, Riyadh (Reuters) 
The Saudi capital, Riyadh (Reuters) 

Saudi Arabia’s economy posted its strongest growth in two years in 2025, expanding by 4.5 percent, supported by gains across all major economic sectors and a robust performance in the final quarter of the year.

According to estimates released by the General Authority for Statistics (GASTAT), real gross domestic product (GDP) grew 4.5 percent in 2025 compared with 2024, driven by growth in oil and non-oil and government activities.

Oil-related activities rose 5.7 percent, while non-oil sectors expanded by 4.9 percent. Government activities recorded more modest growth of 0.9 percent.

Data showed that non-oil sectors were the main contributor to overall GDP growth in 2025, adding 2.8 percentage points to the annual expansion. Oil activities contributed 1.4 percentage points, while government activities and net taxes on products added 0.1 and 0.2 percentage points, respectively.

Sector performance

All major economic sectors recorded positive growth during the year.

Wholesale and retail trade, restaurants and hotels led sectoral growth, expanding 6.2 percent. Financial, insurance and business services followed with 6.1 percent, while electricity, gas and water activities grew 6 percent.

Crude oil and natural gas activities increased 5.8 percent, and oil refining rose 5.7 percent.

Spending components

On the expenditure side, private final consumption grew 3.5 percent in 2025. However, government final consumption spending declined 3.5 percent, while gross fixed capital formation fell 1.7 percent.

In external trade, exports of goods and services rose 8.9 percent, while imports increased 4.7 percent during the year. According to the data, Saudi Arabia’s GDP at current prices reached 4.789 trillion riyals in 2025.

Crude oil and natural gas activities accounted for the largest share of economic output at 17.1 percent, followed by government activities at 14 percent and wholesale and retail trade, restaurants and hotels at 12.3 percent.

Manufacturing industries (excluding oil refining) contributed 11.1 percent to GDP, followed by construction at 8 percent, and financial, insurance and business services at 7 percent.

Fourth-quarter performance

Quarterly data showed that real GDP grew 5 percent in the fourth quarter of 2025 compared with the same period a year earlier. Seasonally adjusted GDP rose 1.4 percent compared with the third quarter of 2025.

During the fourth quarter, oil activities grew 10.8 percent year-on-year and 1.8 percent quarter-on-quarter. Non-oil activities expanded 4.3 percent annually and 1.7 percent quarterly. Government activities, however, declined 1.2 percent year-on-year and 0.2 percent quarter-on-quarter.

Crude oil and natural gas activities recorded the highest annual growth in the fourth quarter at 12.4 percent, followed by wholesale and retail trade, restaurants and hotels with 5.4 percent growth.

On the expenditure side in the fourth quarter, private final consumption rose 3.6 percent year-on-year, while gross fixed capital formation declined 3.1 percent annually, though it increased 1.8 percent compared with the previous quarter.

Government final consumption spending fell 8.5 percent year-on-year and 3.2 percent quarter-on-quarter. Meanwhile, exports rose 12.8 percent annually, while imports increased 1 percent year-on-year and 2.4 percent compared with the third quarter.