Gold Maintains Gain After Trump Calls for Fed Governor Cook’s Resignation

Economic

Commodity

Summary:

Gold prices held steady above $3,342 per ounce following President Trump's demand for Fed Governor Lisa Cook's resignation, sparking concerns over the central bank’s independence and boosting demand for the safe-haven asset....

Trump’s Call for Fed Governor Resignation Fuels Gold Demand

Gold prices remained above $3,342 per ounce, continuing to benefit from heightened political uncertainty after President Donald Trump publicly called for Federal Reserve Governor Lisa Cook’s resignation. Trump’s demand, which was fueled by allegations of mortgage fraud against Cook, raised concerns over the Fed’s independence. As a result, gold saw a nearly 1% increase, bolstering demand for the metal as a safe-haven asset amid fears of increased political interference with the central bank.

Traders are also eyeing Chair Jerome Powell’s keynote speech at the Jackson Hole symposium on Friday for clues about the Fed’s future policy moves. Many expect the central bank to announce a rate cut of at least 25 basis points in its upcoming meeting. Such a move would benefit gold, which does not offer interest payments, as lower rates generally lead to weaker yields on bonds, making gold more attractive. Minutes from the Fed’s July meeting suggested that officials were more concerned about inflation risks than the labor market, which further fueled expectations of a dovish stance from the central bank.

Gold’s Year-to-Date Performance and Outlook

Gold has seen a strong rally this year, with prices rising by more than a quarter, particularly during the first four months, when prices hit a record high. Central-bank buying and inflows into exchange-traded funds (ETFs) have supported the precious metal’s performance. Analysts, including those at UBS, suggest that there is still room for further gains, with prices expected to remain elevated in the coming weeks. Fitch Solutions forecasts that gold will trade between $3,200 and $3,600 per ounce for the remainder of 2025.

At 9:00 a.m. in Singapore, gold was little changed at $3,342.40 an ounce, with the Bloomberg Dollar Spot Index remaining steady. Other precious metals, including silver, palladium, and platinum, were flat, reflecting a stable market as investors await further signals from the Fed and political developments surrounding the central bank.

As gold maintains its gains, the ongoing political pressures on the Federal Reserve and expectations for a rate cut are key factors influencing the market. Gold’s position as a safe-haven asset makes it particularly attractive during times of uncertainty, with traders closely monitoring Powell’s speech and future economic indicators for further guidance.

Source: Bloomberg

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Gerik

Economic

Renewable Energy Boosts Emission Reductions

China’s carbon dioxide emissions fell by 1% year-on-year in the first half of 2025, according to a report from the Centre for Research on Energy and Clean Air (CREA). This decline was primarily driven by a surge in renewable energy capacity, including record additions of wind turbines and solar panels, which outpaced the growth in electricity demand. As a result, thermal power plants burned less coal, contributing to a 3% reduction in emissions from the power sector. The renewable energy boost was particularly notable in the first five months of the year, before a rule change in June was expected to reduce profits for wind and solar farms.

The decline in emissions was further supported by a slump in the property sector, which reduced output and emissions from the cement and steel sectors. However, the reduction in steel sector emissions could have been greater, as mills often shut down more efficient electric arc furnaces in favor of cheaper coal-based production methods. Despite these challenges, the overall decline in emissions from these sectors remains significant.

Chemical Sector Emerges as a New Emission Hotspot

However, the progress made in other sectors was partially offset by a surge in emissions from the chemicals sector. Chemical plants that convert coal into synthetic fuels and feedstocks for plastics saw a 20% increase in coal use during the first six months of the year, building on a 10% increase in 2024. Coal-based chemical processes are more polluting than petroleum-based alternatives, and the chemicals sector emitted a staggering 690 million tons of CO2 in 2024, approximately 410 million to 440 million tons more than would have been released by traditional chemical plants. This sharp increase in emissions from the chemicals sector threatens to undo some of the gains made in reducing emissions from power generation and heavy industries.

The report also noted ongoing geopolitical developments, including a recovery in China’s rare-earth magnet exports to the U.S., rising 76% month-on-month in July. This rebound comes after Beijing agreed to normalize exports as part of a trade truce with Washington. Meanwhile, tensions with India are also being addressed, as both countries explore ways to resolve their long-standing border disputes.

While China has made progress in reducing emissions through increased renewable energy capacity, the rising coal dependence in the chemicals sector poses a significant challenge. Continued growth in this sector, if not addressed, could undermine China’s emissions reduction efforts. The country will need to focus on cleaner alternatives in the chemical industry to meet its environmental goals and maintain its momentum in the global transition to a greener economy.

Source: Bloomberg

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Gerik

Economic

Stocks

Market Reactions to Fed's Jackson Hole Symposium

Asian stock markets were mostly higher on Thursday, reflecting cautious optimism as traders anticipate further direction on U.S. monetary policy from the Federal Reserve's annual gathering in Jackson Hole, Wyoming. Federal Reserve Chairman Jerome Powell is expected to speak on Friday, with market participants closely watching for any clues regarding the central bank's stance on interest rates, especially in the wake of mixed economic data from the U.S.

The Fed has kept interest rates steady this year, primarily due to concerns that President Trump’s tariffs might exacerbate inflation. However, a weaker-than-expected jobs report has also raised questions about the central bank’s next moves. Despite this, minutes from the Fed’s July meeting indicated that inflation remains a larger concern than job losses, with the majority of officials opting to hold rates steady.

Mixed Performance in Asian Markets

In Japan, the Nikkei 225 dropped by 0.6% to 42,636.74, weighed down by a survey showing Japan's factory activity remained in contraction for the second consecutive month. Meanwhile, the S&P Global Japan Manufacturing PMI showed a modest uptick to 49.9, just below the neutral 50-mark. The ongoing impact of U.S. tariffs on Japanese exports to the U.S. continues to affect regional manufacturers.

In China, the Shanghai Composite Index rose by 0.4% to 3,779.52, while Hong Kong's Hang Seng Index edged down 0.1% to 25,135.09. South Korea’s KOSPI jumped 1% to 3,161.74, and Australia’s S&P ASX 200 Index added 1% to 9,005.00. Taiwan’s TAIEX saw a 1.2% rise, while India’s Sensex gained 0.1%.

Nvidia and Palantir Stocks Face Volatility

The day’s focus again centered on technology stocks, particularly those involved in artificial intelligence. Nvidia, a key player in AI technology, saw a significant drop earlier in the day, falling as much as 3.9%. However, it recovered much of the loss, closing with a modest 0.1% dip. Nvidia’s influence on Wall Street is significant, as it is one of the most valuable stocks, so its movement had a notable impact on broader market sentiment.

Palantir Technologies, another prominent AI stock, also saw a 1.1% drop, adding to its 9.4% loss from the previous day. Analysts point to the overvaluation of AI-related stocks, warning that their prices have surged too quickly amid the excitement around the technology, potentially leading to a correction.

Commodity Prices and Currency Movements

In commodity markets, U.S. benchmark crude oil gained 30 cents to $63.01 per barrel, while Brent crude rose by 26 cents to $67.10 per barrel. The U.S. dollar strengthened slightly, trading at 147.37 Japanese yen, up from 147.29 yen, while the euro slid to $1.1648 from $1.1659.

As Asian markets await Jerome Powell's address at Jackson Hole, investor sentiment remains cautious, with volatility in tech stocks like Nvidia and Palantir reflecting broader concerns about valuations and economic outlook. With mixed signals from the U.S. economy, Powell’s speech could provide much-needed clarity on the Fed’s future actions regarding interest rates and its approach to inflation and employment risks.

Source: Reuters

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Daniel Carter

Political

Russia-Ukraine Conflict

Hungary has offered to host peace talks between Russia and Ukraine twice, and the offer still stands, Hungarian Foreign Minister Peter Szijjarto said in a podcast broadcast on Facebook on Thursday.

Szijjarto reacted to reports that the White House was eyeing the Hungarian capital Budapest as a venue for a possible trilateral meeting between U.S. President Donald Trump, Russia's Vladimir Putin and Ukraine's Volodymyr Zelenskiy.

The U.S. Secret Service was preparing for the summit in the central European nation, with Budapest emerging as a first choice for the White House, Politico reported on Tuesday.

"If we are needed, we are ready to provide appropriately fair and safe conditions for such peace negotiations. We are pleased if we can contribute to the success of peace efforts," Szijjarto said in a daily podcast hosting government members.

However, the foreign minister denied media reports published on Tuesday, including by Reuters and Bloomberg, that U.S. President Donald Trump called Hungarian Prime Minister Viktor Orban to talk about Ukraine's European Union accession after Monday's summit with Ukraine's president and European leaders.

"I want to make it clear that there was no such call. There was not. Period," Szijjarto said.

A White House official had said that Trump and Orban spoke on Monday regarding Ukraine's talks with the European Union about joining the bloc and also discussed the possibility of Budapest serving as host for talks between Putin and Zelenskiy.

Source: Reuters

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Economic

Commodity

Crude Inventories Shrink, Fueling Price Support

Oil prices held onto their gains on Thursday after U.S. crude inventories shrank by 6 million barrels last week, the biggest drop since mid-June. Brent crude traded around $67 per barrel, following a 1.6% increase on Wednesday, while West Texas Intermediate (WTI) remained steady at $63. This drop in U.S. stockpiles has kept inventories well below the seasonal average, providing support to oil prices. Gasoline stockpiles also continued their decline, falling for the fifth consecutive week, signaling ongoing strong demand in the U.S.

Despite the recent inventory draw, oil prices are still down over 10% this year due to concerns about the effects of U.S. trade policies and the return of OPEC+ production, raising fears of a market glut once peak summer demand subsides. Traders are also closely monitoring geopolitical developments, particularly the situation in Ukraine, as the war continues to influence global oil supply dynamics.

Russia’s Oil Exports and Geopolitical Tensions

Russia has continued to export oil, even amidst a range of sanctions, with a significant portion being shipped to India. However, India’s purchase of Russian crude has drawn criticism from the U.S. administration, with President Trump threatening economic penalties against New Delhi. This ongoing geopolitical tension could affect oil flows and market sentiment.

At the key U.S. storage hub in Cushing, Oklahoma, crude inventories increased for the seventh consecutive week, according to the Energy Information Administration (EIA). This buildup in stockpiles at the delivery point for WTI futures highlights the supply surplus, particularly as the Permian Basin has been contributing to rising inventories in the area.

Outlook for Oil Market

Despite recent inventory data providing some short-term support, market experts like John Driscoll from JTD Energy Services anticipate that oil prices could face downward pressure through the middle of next year due to broader economic factors and supply chain imbalances.

While U.S. inventory data has offered some bullish signals, the broader outlook for oil remains clouded by global trade uncertainties, OPEC+ production policies, and geopolitical tensions. As the market braces for potential supply surpluses and ongoing political pressures, oil prices are likely to remain volatile in the coming months.

Source: Bloomberg

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Samantha Luan

Forex

Political

Economic

Thailand's billionaire Shinawatra family is bracing for a series of high-stakes court decisions starting Friday that could test its political resilience, with the prospect of an early election and prolonged trouble for the country's stuttering economy.Thailand's Shinawatra political dynasty has been at the heart of two decades of intermittent turmoil and its latest battles will culminate in rulings that could unseat Prime Minister Paetongtarn Shinawatra for an alleged ethics violation and put her influential but polarising father Thaksin Shinawatra back in prison.

A court will on Friday rule if Thaksin during a 2015 media interview insulted the powerful monarchy, a serious crime in Thailand which carries lengthy jail terms of up to 15 years for each offence.Another court will decide 18 days later if the tycoon's 2023 detention in a VIP hospital wing, instead of jail, means his prison sentence for abuse of power and conflicts of interest was not fully served.

Both Shinawatras have denied any wrongdoing.

Unfavourable verdicts for Paetongtarn, 39, and Thaksin, 76, a divisive backroom operator and driving force behind the government, could reduce the family's bargaining power and lead to an earlier-than-scheduled election, which their once formidable Pheu Thai party is not in the best shape to contest.

"A new election will definitely take place by mid-2026 or maybe sooner," said Thammasat University law professor Prinya Thaewanarumitkul."The chances of Pheu Thai regaining the popular vote in the next election are very unlikely."A spokesperson for the Pheu Thai-led government declined to comment on the upcoming court rulings.

UNCERTAINTY LOOMS

The Shinawatra family are undoubtedly survivors having prevailed through two military coups and three court rulings that collectively toppled three of their governments and five prime ministers.It is unclear how the courts will rule, with numerous permutations for what comes next in Thai politics.The coalition government of Paetongtarn, who is suspended pending the Constitutional Court's August 29 ruling, is sinking in opinion polls, under intense public pressure and hanging onto power by a thread.

The verdicts come at a critical moment for Southeast Asia's second-largest economy, which is struggling with weak growth, high household debt, slowing tourism and investor concern over policy continuity.Paetongtarn is accused of violating ethics in a June telephone conversation with former Cambodian leader Hun Sen that was leaked as both countries were on the brink of an armed border conflict, which erupted a month later. A ceasefire is now in place.

Paetongtarn's predecessor Srettha Thavisin was dismissed by the same court a year ago and if she suffers the same fate, or resigns, parliament must choose a new premier from a shrinking list of candidates submitted before the 2023 election.Her Pheu Thai party has only one candidate left, the low-profile former justice minister Chaikasem Nitisiri. But the 76-year-old would need help from Thaksin or Pheu Thai to rally support from a shaky coalition that holds a razor-thin majority.

Other candidates include former interior minister Anutin Charnvirakul, whose party exited the governing coalition in June, and former premier and coup leader Prayuth Chan-ocha, who quit politics and is now a royal adviser.The anti-establishment opposition People’s Party, the largest in parliament, has signalled it may back Anutin if he agrees to dissolve parliament this year and seek constitutional reform.

Unfavourable court verdicts would make it harder for seasoned dealmaker Thaksin to keep Pheu Thai in government, but some analysts say he still has backing from a powerful conservative establishment that wants to keep the progressive opposition at bay."The conservative camp has chosen Thaksin," said Olarn Thinbangtieo, a political science lecturer at Burapha University."Chaikasem would be picked as a short-term prime minister and dissolve parliament when the timing is right."

Source: Reuters

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Economic

Tariff Impact on Earnings and Economic Growth

Indian companies have faced the sharpest earnings downgrades in Asia, with analysts cutting earnings estimates by 1.2% in the past two weeks. This marks the steepest decline in earnings forecasts for large and mid-cap firms in the region. The downgrades follow disappointing quarterly earnings reports that have extended a period of weakness among listed Indian firms, dampening sentiment and impacting key equity indices. Despite India’s economy being primarily driven by domestic consumption, the looming risk of U.S. tariffs on exports set to rise as high as 50% has raised concerns over potential growth setbacks.

Although Indian firms in the Nifty 50 index earn only a small portion (9%) of their revenue from the U.S., analysts warn that the imposition of higher tariffs could significantly affect India’s economic growth. According to MUFG’s analysis, a sustained 50% tariff could reduce India’s GDP growth by as much as 1 percentage point, with sectors such as textiles highly sensitive to employment levels bearing the brunt of the impact.

Domestic Tax Reforms and Slow Economic Recovery

In an effort to mitigate the economic effects of the tariffs, Indian Prime Minister Narendra Modi recently introduced sweeping tax reforms aimed at boosting domestic consumption. These reforms are expected to provide a modest boost to GDP growth, with economists at Standard Chartered predicting an increase of 0.35-0.45 percentage points in the fiscal year ending March 2027. However, the impact of these reforms may not be enough to offset the challenges posed by external factors like tariffs.

Earnings growth for Indian companies has remained sluggish, with single-digit growth for five consecutive quarters well below the 15-25% growth range seen between 2020 and 2024. After the April-June earnings reports, the automotive, capital goods, food and beverages, and consumer durables sectors saw some of the steepest cuts in earnings forecasts, each down by 1% or more.

Changing Market Sentiment and Investor Preferences

Despite India's strong economic growth rate averaging 8.8% between fiscal 2022 and 2024 the country’s equity market has lost favor with investors. According to Bank of America’s latest fund manager survey, India has fallen from the most-favored to the least-preferred Asian equity market within a span of just two months. The ongoing weakness in earnings growth and the slow pace of recovery have led to a shift in investor sentiment, with the economic growth and corporate earnings outlooks remaining sluggish for 2025.

As U.S. tariffs continue to weigh on Indian corporate earnings, the outlook for the country’s economic recovery remains uncertain. While domestic tax reforms may offer some relief, the challenges posed by external factors and the ongoing slowdown in key sectors could continue to hinder growth. With investor sentiment turning negative, India faces a difficult road ahead to regain market favor and sustain its economic momentum.