Oil racks up more gains on US-Iran tensions, gold breaks $1,400

The US drown shot down over the Gulf of Oman sent oil prices soaring more than six percent Thursday. (AFP)
Updated 21 June 2019

Oil racks up more gains on US-Iran tensions, gold breaks $1,400

HONG KONG: Oil prices rose again Friday, extending the previous day’s surge on tensions between the United States and Iran, while gold rose above $1,400 an ounce for the first time since 2013.

Fears of a conflict in the crude-rich Middle East ratcheted up Thursday when Tehran said it had shot down a US “spy drone” that was violating its airspace, which Washington denied.

Donald Trump described the move as a “big mistake”, adding: “This country will not stand for it”.

The news – which comes a week after the US accused Iran of attacking two tankers in the Gulf of Oman – sent oil prices soaring more than six percent Thursday, while talk has increased of a military stand-off that could deal a massive blow to supplies.

Observers said the cost of crude could continue to rise.

“If we meld supply risk fear, a powerfully bullish narrative, (the Federal Reserve’s) willingness to execute a pro-cyclical rate cut juicing risk assets and frame it with the potentially game-changing G20, you have the makings of a solid base for oil to shoot even higher,” said Stephen Innes, managing partner at Vanguard Markets.

The focus is also on next week’s planned meeting between Trump and his Chinese counterpart Xi Jinping on the sidelines of the G20 in Japan next week.

Trump’s tweet about “a very good telephone conversation” between the pair this week fuelled a surge across global markets on hopes for a deal to end their countries’ long-running trade war that has impacted the world economy.

However, Asia took a step back Friday, having been given an extra boost by the Fed indicating it will begin to cut interest rates soon, and other central banks erring towards softer monetary policies.

Gold breaks $1,400

A cheaper dollar and tensions in the Middle East have also ramped up demand for gold – seen as a go-to asset in times of uncertainty and upheaval – sending it above $1,400 an ounce for the first time since 2013.

“Gold jumped more than three percent on Thursday as the Fed left little doubt that an interest rate (cut) is coming and with trade and political tensions still at play the yellow metal was a clear choice for investors looking for a safe haven,” said OANDA senior market analyst Alfonso Esparza.


Saudi finance minister reassures public on taxes

Updated 10 December 2019

Saudi finance minister reassures public on taxes

  • Mohammed Al-Jadaan: There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully
  • The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year

RIYADH: Saudi finance minister Mohammed Al-Jadaan pledged that there would be no more taxes or fees introduced in the Kingdom until the social and economic impact of such a move had been fully reviewed.

He was speaking at the 2020 Budget Meeting Sessions, organized by the Ministry of Finance and held in Riyadh on Tuesday, where a number of ministers and senior officials gathered following the publication of the budget on Monday evening.

“There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully, especially in terms of economic competitiveness,” said Al-Jadaan.

The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year and more than 10 percent higher than the expected budget for this year. 

Most of that increase has come from taxes on goods and services which rose substantially as a result of the improvement in economic activity over the year.

The reassurances from the minister come as the Saudi budget deficit is estimated to widen to about SR187 billion, next year, or about 6.4 percent of GDP.