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Following President Javier Milei's comments on Friday that the market was in "panic mode", US Treasury Secretary Scott Bessent has said “all options” are on the table for the Trump administration to support Argentina through this bout of severe market volatility.

The country has already spent more than $1 billion to defend the peso out of its scarce international reserves.

The two countries are in talks this week - Milei and US President Donald Trump will meet Tuesday - and Treasury Secretary Scott Bessent posted on social media earlier that the US is ready to do whatever it takes to support Argentina.

That includes direct currency purchases as well as swap lines and purchases of dollar-denominated government debt.

Bessent called the South American country “a systemically important US ally in Latin America,” adding that the US Treasury “stands ready to do what is needed within its mandate to support Argentina. All options for stabilization are on the table.”

He said that options for a support package “may include, but are not limited to, swap lines, direct currency purchases, and purchases of US dollar-denominated government debt from Treasury’s Exchange Stabilization Fund”.

The comments sent Argentine stocks soaring...

...and the peso ripped...

Argentina’s dollar bonds due in 2029 and 2035 rallied by 5 to 6 cents in the dollar to 70 and 53 cents respectively after Bessent’s comments.

As Bloomberg reports, it’s not impossible he can recover from here, especially with the support of the US and International Monetary Fund, but the key test will be next month’s midterm elections.

The possibility of a defeat for his cost-cutting government in October is what has spooked the market. Argentina’s friends can help it prop up the currency, but they can’t help Milei keep the support of voters.

Source: Zero Hedge

Gold prices hit a record US$3,728 (RM15,666.91) per troy ounce on Monday, extending a rally that has boosted them twofold since late 2022. Demand is expected to remain robust for some time due to a mix of factors.

Central bank purchases and strong investment demand, visible in inflows into physically backed gold exchange-traded funds (ETFs), are the main drivers, fuelled by US President Donald Trump's upending of Western security policy, his trade wars with other countries and concerns about the independence of the US Federal Reserve (Fed).

Will central banks keep on buying more?

Annual net purchases of gold by central banks have exceeded 1,000 metric tons each year since 2022, according to consultancy Metals Focus, which expects them to buy 900 tons this year, twice the annual average of 457 tons in 2016-2021.

Developing countries are seeking to diversify from the dollar after Western sanctions froze roughly half of Russia's official foreign currency reserves in 2022.

Official numbers reported to the International Monetary Fund reflect only 34% of the 2024 total central bank gold demand estimate, according to the World Gold Council (WGC), an industry body.

They have contributed 23% to total annual gold demand in 2022-2025, double the average share recorded during the 2010s.

Will the drop in the jewellery sector continue?

Demand for gold for jewellery, the main source of physical demand, fell 14% to 341 tons in the second quarter of 2025, the lowest since the pandemic-swept third quarter of 2020, as high prices deterred buyers, according to the WGC.

High prices spurred the decline, the bulk of which came from the largest markets, China and India, whose combined market share fell below 50% for only the third time in the last five years, the WGC estimated.

Metals Focus estimated that gold jewellery fabrication fell 9% to 2,011 tons in 2024 and will deliver a 16% slump this year.

Are people still buying small gold bars and coins?

There has been a major shift in appetite for different products in the retail investment market but total purchases in this sector remain robust.

Investment demand for gold bars rose 10% in 2024, while coin buying fell 31%, according to the WGC, which said the trend had extended to this year.

Metals Focus expects net physical investment to rise 2% this year to 1,218 tons as demand in Asia remains high amid positive price expectations.

Can gold ETFs attract more inflows?

Gold ETFs have become a more important source of demand for gold this year, recording inflows of 397 tons in the period from January to June, their largest first half inflow since 2020, according to the WGC.

Gold ETFs total holdings stood at 3,615.9 tons at the end of June, the largest since August 2022. Their record was 3,915 tons five years ago.

Metals Focus expects net investment in exchange-traded products in 2025 at 500 tons after seven tons of outflows in 2024.

Source: Theedgemarkets

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Gold hits new record high

Source: Investing

Source: Theguardian

Acceleration through key $3700 resistance zone pushed gold price to new record high on Monday (price was up 1.1% since opening).

Shallow pullback from previous peak did not harm larger bulls and was just positioning for fresh push higher, as it reversed well above $3600 lower breakpoint.

Revived optimism of more Fed rate cuts (despite less dovish than expected post-FOMC comments from chief Powell) brightened the sentiment, along with complicating geopolitical situation after a few countries recognized the State of Palestine, that resulted in fresh rise in safe haven demand.

In addition, sustained physical buying by central banks continues to underpin yellow metal’s price.

Daily studies remain firmly bullish and supportive for further advance, with immediate targets at $3734 and $3750, guarding $3789/$3800 zone.

Daily close above $3700 is needed to validate positive signal, generated on completion of bullish continuation pattern on daily chart.

Meanwhile, bulls may face headwinds from overbought conditions on hourly and 4-hr charts, with limited dips expected to find firm ground at $3700 zone (reverted to solid support).

Res: 3734; 3750; 3789; 3800.Sup: 3707; 3700; 3663; 3627.

Source: ACTIONFOREX

Oil and gas production is like running uphill on a treadmill with a merciless trainer who keeps cranking up the speed. It demands continuous investment just to maintain production and to meet even flat, let alone growing, demand. A new study highlights accelerating decline rates – and what they mean for oil companies, geopolitics and the climate.The International Energy Agency (IEA)’s report indicates that, in the absence of new investment, oil production would fall by about 8 per cent per year and natural gas by about 9 per cent. This is up substantially from the 2010 levels, because of a much higher share of shale production – mostly from the US – and deepwater output. These decline more quickly than the onshore super-giant fields typical of the Middle East.

Even with new investment, natural decline rates are 5.6 per cent for conventional oilfields and 6.8 per cent for conventional gas. Effectively, each year, Iraq plus Oman disappears from global oil supply and Qatar plus Algeria disappear from global gas. This is despite strenuous efforts to sustain output from existing fields, including drilling new wells and injecting water, gas and other substances. These losses have to be replaced through developing new fields.

This does not mean that demand will necessarily increase. Oil consumption, in particular, may be close to a peak as electric vehicles become ever more capable and popular. But it is unlikely that global oil needs will decline by anything close to 5.6 per cent annually. Even a fairly rapid reduction of 1 or 2 per cent annually would require significant continuing upstream investment.

Yet in 2021, the IEA’s net-zero report seemed to say the opposite: that no investment was required in new oil and gasfields. Not surprisingly, environmentalists seized on this, and it has been used as a justification for demanding that oil companies wind down production and for governments not to approve new field developments.The puzzlement over the IEA’s apparently conflicting messages stems from confusing what should be, for the sake of the climate, with what is.If we were really on track for a net-zero carbon world, or even a sustained decrease in hydrocarbon demand, there would be no need for bans on new fields. Oil and gas prices would be plummeting, and investment would be drying up.

Instead, oil prices today are modestly below the historic average while gas prices are still well above it. Upstream investment has been relatively low after the oil price crash of late 2014, but has still remained fairly steady at about $600 billion annually, excluding the Covid-hit years of 2020 and 2021. Nine-tenths of this spending goes to replace declines, while only a tenth increases supply.

Oil companies are very active in deepwater hotspots such as the US Gulf of Mexico, Brazil, Guyana and West Africa. Opec members Iraq and Libya are attracting major new spending after periods of political turmoil.Environmental groups will doggedly fight new hydrocarbon production projects such as drilling in Alaska, developing the Rosebank and Jackdaw fields off the UK coast, or building a pipeline for oil from landlocked Uganda.

This is ineffective and counterproductive.

For a start, the distinction between new and existing fields is largely meaningless. Production can be boosted from existing fields by “enhanced recovery” methods or by exploiting additional reservoir layers or field extensions. From both climate and economic perspectives, new fields may be cheaper to produce from and lower in emissions than wringing the last drops from older fields, or extracting carbon-intensive resources such as Canada’s gigantic oil-sands.If new fields in developed countries are blocked off, oil and gas will be imported from Russia or the Middle East or an overtly anti-climate US. With no new investment, Opec and Russia would collectively produce more than 65 per cent of global oil by 2050. That would be a politically unacceptable level of dependence for their key customers.

Far-right parties across Europe, such as the UK’s Reform, are using worries about high energy bills and opposition to “net-zero” carbon policies and bans on North Sea fields to boost support. They do not have to present any positive or practical energy or climate vision of their own.Alternatively, investment in new producing countries could be banned. Financing for new fields from western banks or international financial institutions has been very hard to obtain for years. That policy bars new entrants, mostly lower-income countries such as Uganda, Mauritania and Guyana, while ensuring continuing hydrocarbon revenue flows to wealthy countries such as the GCC states, Australia, Norway and Canada.

If oil-producing countries themselves decided voluntarily to cease investment, the rapid loss of oil production would send prices through the roof. Something similar occurred in 2022, when Russia restricted gas supplies to Europe during its invasion of Ukraine. In the face of economic crisis, European politicians seized the chance to strengthen support for low-carbon energy and improve efficiency. But they also introduced price caps, restarted coal power stations, and flew to the Gulf and North Africa to beg for additional oil and gas.

The major producers in the Middle East have to invest steadily to meet their assessment of demand, not overproducing to crash prices, nor underspending and damaging the global economy. They learnt the bitter lesson of restricting supply too much in the 1970s, which was followed by a surge of competition elsewhere and a collapse in demand for their oil, leading to a decade and a half of slump. They should probably err – but only a little – on the side of over-investing.

Their giant, low-cost, low-carbon footprint resources mean they will inevitably gain market share both for oil and gas as long as they maintain consistent investment plans. Qatar and Saudi Arabia in gas, Iraq in oil, and the UAE in both, all have such programmes. The tyranny of the treadmill applies to them as much as to any hydrocarbon producer, but their superior fitness should make them the winners.

Source: THENATIONALNEWS