2025-01-30 23:20
Gold could trade above $3,000 this year, analysts predict China's central bank continues gold purchases, supporting prices Jan 31 (Reuters) - Safe-haven demand due to geopolitical uncertainties and concerns over global economic growth amid U.S. President Donald Trump's tariff plans have hoisted gold prices to a record high, once again bringing the key $3,000 threshold onto investors' radar. Spot gold climbed to a record high of $2,798.40 a troy ounce on Thursday, starting 2025 with fresh vigour after logging its strongest annual performance since 2010 last year. "There's concerns that some of the (economic) growth may come down because of the policies and tariffs that the current administration is looking to implement," said Phillip Streible, chief market strategist at Blue Line Futures. "So when you've got higher inflation and lower growth, stagflation becomes the economic theme. Gold tends to work very well in that particular environment." Trump's tariff plans are widely perceived as inflationary and with potential to trigger trade wars, driving up safe-haven demand for bullion as it is traditionally seen as a hedge against price pressures and geopolitical uncertainty. "I can see (gold) trying to reach up to that $2,900 level at some point during the first quarter; after we breach that, we'll set new levels," said Bob Haberkorn, senior market strategist at RJO Futures. "At some point this year, gold could ultimately trade north of $3,000." THE US MARKET Amid concerns about the U.S. import tariff plans, the U.S. gold futures have been trading at a premium to the spot price for several months and widened the price spread again on Thursday. In a sign of these concerns, 12.9 million troy ounces of gold were delivered to COMEX-approved warehouses since late November, raising stocks there by 73.5% to 30.4 million ounces, the highest since July 2022. The deliveries came from London, Switzerland and other major gold-trading hubs. The London Bullion Market Association said on Thursday that it was monitoring the situation and liaising with CME Group (CME.O) , opens new tab and U.S. authorities. London gold market stocks and liquidity remain strong with the average daily trade volume since the start of January is 47.1 million ounces, the association added. GOLD AND THE US RATE EXPECTATIONS Gold hit multiple record peaks last year, bolstered by the Federal Reserve's rate-cutting cycle, safe-haven demand and robust central bank buying. The Fed, in its January meeting kept benchmark interest rates unchanged as widely expected, after easing a full basis point in 2024. This marks the first pause since the start of its easing cycle in September. The non-yielding bullion tends to thrive in a low-interest rate environment. As to purchases by central banks, the People's Bank of China has been a key driver of gold demand as it kept on adding bullion to its reserves over the past year despite the price growth - in what analysts see as the PBOC's broader strategy to diversify the reserves. Analysts suggest that continued purchases by China's central bank could provide further support to gold prices in the coming months. Sign up here. https://www.reuters.com/markets/commodities/trump-tariff-uncertainties-push-safe-haven-gold-record-high-2025-01-30/
2025-01-30 23:18
Jan 30 (Reuters) - IT issues at Frontier Airlines (ULCC.O) , opens new tab triggered a brief ground stop at all of the U.S. budget carrier's destinations on Thursday evening, according to an advisory from the U.S. Federal Aviation Administration. The ground stop was requested by the Denver-based airline at 2233 GMT, and the stop was canceled at 2254 GMT, according to the FAA. Frontier confirmed that the ground stop had been lifted, and said its systems operations center experienced a short internet outage that caused the airline to initiate a brief ground stop. Sign up here. https://www.reuters.com/business/aerospace-defense/it-issues-trigger-brief-ground-stop-frontier-airlines-flights-us-faa-says-2025-01-30/
2025-01-30 23:18
Shares drop to over 1-month low Q2 APLNG revenue logs 11% sequential rise Citi says APLNG forecast cut is concerning Jan 31 (Reuters) - Origin Energy (ORG.AX) , opens new tab on Friday forecast lower production from Australia Pacific LNG (APLNG) in 2025, and also reported an 11% sequential rise in second-quarter revenue from its stake in the project on the back of higher gas prices. Shares of the Sydney-based company fell as much as 4.7% to A$10.675 by 0011 GMT, on track for their worst trading day since Aug. 15, if losses hold. The stock also hit their lowest point since Dec. 23, 2024. The power producer expects its 2025 production from APLNG — Origin's joint venture with U.S. oil and gas major ConocoPhillips (COP.N) , opens new tab and Sinopec (600028.SS) , opens new tab — to be in the range of 670 petajoules (PJ) to 690 petajoules (PJ), down 2%-3% from its previous outlook. APLNG is the largest producer of natural gas in eastern Australia. Origin said lower performances at some of its Queensland projects, coupled with lacklustre performance in non-operated assets due to unplanned maintenances impacted its forecast. "APLNG 2Q results were largely in line, although the downgrade to FY25 production guidance on field performance is concerning for the trade-off between capex and production," Citi analysts said in a note. Origin's revenue from its stake in APLNG rose to A$681 million ($422.70 million) in the quarter ended Dec. 31, compared with A$615 million in the preceding three months , opens new tab. The company realised $12.20 per metric million British thermal units (mmBtu) for its LNG product from the project, compared with $11.95 in the first quarter. Analysts anticipate LNG prices, which faced significant volatility in 2024 due to ample inventories and geopolitical uncertainty, to advance in 2025. The country's second-largest power producer said its LNG trading EBITDA logged a 270% rise to A$285 million in the half year of 2025, in line with its 2025 forecast. LNG sales at APLNG rose 6% to 38.4 PJ from the previous quarter, the company said, adding that total production share from the project dipped 1% sequentially to 47.4 PJ. ($1 = 1.6111 Australian dollars) Sign up here. https://www.reuters.com/business/energy/australias-origin-energy-posts-11-sequential-rise-q2-aplng-revenue-2025-01-30/
2025-01-30 23:16
Chinese startup has upended thinking over AI energy needs Ageing Japan long expected electricity demand to slow Last year, it shifted to brace for AI-related demand TOKYO, Jan 31 (Reuters) - Weeks after Japan revealed details of a landmark energy plan partly designed to keep up with an expected AI surge, the shock rise of Chinese startup DeepSeek has upended conventional wisdom over the sector's future power demands. It was only last year that Tokyo abandoned its long-held forecasts that its future electricity needs would dwindle with its ageing population, and began accounting for higher AI-driven usage from data centres and microchip makers. In late December, the government released a draft of its basic energy plan, a major policy document reviewed about every three years, projecting electricity generation would rise between 10-20% by 2040 and citing those factors. While Tokyo will not likely hurry to rejig its forecasts, DeepSeek's seemingly leaner models have triggered a broad rethink of AI energy needs that the world's most resource-poor major economy would be remiss to ignore, analysts say. "It would be risky (for Japan) not to take this seriously," said Andrew DeWit, professor at Rikkyo University's School of Economic Policy Studies in Tokyo. DeepSeek last week launched a free AI assistant that it says uses less data at a fraction of the cost of incumbent services. By Monday, it had overtaken U.S. rival ChatGPT in downloads from Apple's App Store, triggering a global selloff in tech shares. Power producers, whose stock prices had outperformed on expectations of ballooning electricity demands needed to scale AI technologies, also took a hit as investors weighed DeepSeek's seemingly more energy-efficient models. But as analysts parse DeepSeek's potential impact, an alternative view has emerged: its success may lower the barrier to entry in a sector dominated by Silicon Valley giants and catalyse higher overall electricity demand from new AI entrants. This is a potential headache for Japan, which produces just 13% of its energy needs from domestic sources, the second lowest ratio of all 38 OECD countries, besting only Luxembourg. "If AI proves to be cheaper to develop than currently expected, that would accelerate its mass introduction rather than slow it. If anything, it would increase power demand in the country," said Yuriy Humber, CEO of K.K. Yuri Group, an energy research and consulting firm based in Tokyo. "Japanese officials have taken their time to adjust power demand forecasts even though the AI boom was apparent two years ago. I expect they will monitor the new developments carefully," he said. The trade ministry, which oversees the country's long-term energy planning, did not immediately respond to a request for comment. A senior official at the ministry, speaking on condition of anonymity, said he had been briefed on DeepSeek in December and concluded that, while impressive, the technology did not advance existing systems. He said he thought markets had over-reacted. Tepco, Japan's biggest power company by sales, said it was monitoring DeepSeek's potential impact on power demand closely but has yet to assess its full effects. 'BITTER LEARNING' Japan's grid monitor had for years predicted future electricity demand would decline gradually due to the adoption of energy-efficient equipment and a shrinking population. But in 2024, it revised its outlook to reflect an overall increase, largely driven by an expected 5.14 million kWh of new power demand from data centres and chip plants by 2034. Senior government officials have also cited AI-related energy needs as a reason to restart nuclear reactors, a sensitive subject in a country that suffered one of the world's worst nuclear disasters when the Fukushima plant was crippled by a massive earthquake and tsunami in 2011. Mika Ohbayashi, director at Renewable Energy Institute in Tokyo, said that DeepSeek's emergence was a "clear indication" that AI may become more efficient and demand less power. She criticised Japanese officials linking AI energy needs to the promotion of nuclear power, and said the government needs to do more to develop renewable energy instead. The jury is out over whether DeepSeek's models could trigger more or less AI energy demands in the future, and analysts say its technology needs to be rigorously stress tested before countries rush to change their plans. But Japan has had a bitter experience of getting its energy preparations for technology wrong in the past, said Rikkyo University's DeWit, pointing to the years before its economic bubble burst in the late 1980s. "Japan was a chip leader at the time and they figured they were going to become number one and they built out the power system. And of course, as they entered the 90s as the bubble collapsed, that power demand did not eventuate. "They've had a bitter learning. So it behoves the policy makers to take this seriously," he said. Sign up here. https://www.reuters.com/business/energy/resource-poor-japan-was-girding-an-ai-energy-surge-deepseek-raised-stakes-2025-01-30/
2025-01-30 22:47
MEXICO CITY, Jan 30 (Reuters) - International money transfer company Wise (WISEa.L) , opens new tab officially launched in Mexico on Thursday, offering a new way for Mexican nationals to send money in and out of the country. WHY IT'S IMPORTANT In a press release, Wise said its service aims to address significant challenges Mexicans face from a lack of transparency in international payments and high hidden fees associated with traditional money transfers. KEY QUOTE "Launching in Mexico allows Wise to disrupt a traditional remittance market by introducing radical price transparency, completely redefining how Mexican nationals send money abroad," said Efrain Florencia, Wise's Mexico country manager. CONTEXT Mexico is the second-largest recipient of remittances globally, according to the World Bank, and remittances are one of the country's most important sources of foreign currency. BY THE NUMBERS According to a survey commissioned by Wise, consumers moved around $168 billion in and out of Mexico in 2024, a figure that the company projected to potentially double by 2028. Wise said that in 2024, according to its survey, Mexicans lost $446 million in hidden fees when sending money internationally, which is projected to rise to approximately $514 million in 2025. Sign up here. https://www.reuters.com/business/finance/money-transfer-service-wise-launches-mexico-2025-01-30/
2025-01-30 22:45
Jan 30 (Reuters) - Atlantic Shores, a joint venture between Shell Plc (SHEL.L) , opens new tab and France's EDF, reiterated its commitment to delivering New Jersey's first offshore wind project on Thursday, despite Shell's recent $1 billion write-off related to the venture. Shell's fourth-quarter earnings included $2.2 billion in impairments, part of which was a $1 billion write-off for Atlantic Shores, with Chief Financial Officer Sinead Gorman stating that the project did not align with the company's capabilities or return goals. Shell is now looking to monetize its stake. Atlantic Shores had submitted a proposal in July last year to supply offshore wind energy to New Jersey as part of the state's Fourth Offshore Wind Solicitation. In response to Shell's write-off, Atlantic Shores affirmed its dedication to progressing with the project, emphasizing its compliance with obligations to local, state and federal partners under existing leases and permits, the company said in a statement. "Business plans, projects, portfolio projections, and scopes evolve over time – and as expected for large, capital-intensive infrastructure projects like ours, our shareholders have always prepared long-term strategies that contemplate multiple scenarios that enable Atlantic Shores to reach its full potential," the company stated. The Atlantic Shores South wind project is expected to generate up to 2,800 megawatts of electricity, enough to power close to 1 million homes, according to the U.S. Interior Department. However, the broader offshore wind sector has faced significant economic challenges, including soaring materials costs, high interest rates and supply-chain delays. Several major developers, including Orsted, Equinor (EQNR.OL) , opens new tab, BP (BP.L) , opens new tab, Avangrid and Shell, have canceled or sought to renegotiate power contracts for planned U.S. wind farms with expected start dates between 2025 and 2028. Offshore wind remains a target, as new U.S. President Donald Trump is set to follow through on his pledge to halt such projects, creating ongoing uncertainty for the industry. Sign up here. https://www.reuters.com/business/energy/atlantic-shores-reaffirms-commitment-new-jersey-offshore-wind-despite-shells-2025-01-30/
