Key Takeaways
- Gold prices surged 1.3% to settle at $4,054.88 per ounce following softer-than-expected U.S. CPI data, which significantly dampened expectations for a near-term interest rate hike.
- Rio Tinto (RIO) reported Q2 iron ore sales of 85.3Mt, surpassing analyst estimates of 83.13Mt, while lowering its 2026 copper cost guidance to US 30-50c/lb.
- U.S. President Donald Trump confirmed continued military strikes on Iran, targeting military infrastructure while warning that energy targets and power plants remain on the table if Tehran refuses to negotiate.
- Nikkei 225 futures climbed to 68,325, trading at a significant premium to the cash close as Japan considers lifting a long-standing ban on U.S. fresh potato imports.
- The UK Foreign Office summoned Iran’s Chargé d’Affaires in response to proxy group assaults across Europe, marking a further deterioration in diplomatic relations.
Precious Metals and Macroeconomic Outlook
Spot gold rallied sharply on Tuesday, gaining 1.3% to reach $4,054.88 per ounce after the latest U.S. inflation report showed price pressures easing more than anticipated. The cooling Consumer Price Index (CPI) led market participants to scale back bets on a hawkish Federal Reserve, providing a significant tailwind for non-yielding bullion.
Despite the rally, Federal Reserve Chair Kevin Warsh maintained a cautious tone during his congressional testimony, stating the central bank remains "committed to restoring price stability." Warsh warned investors against over-interpreting a single data point, shifting the market's focus toward upcoming Producer Price Index (PPI) and Personal Consumption Expenditures (PCE) data later this month.
Rio Tinto Operational Update
Mining giant Rio Tinto (RIO) delivered a robust second-quarter production update, headlined by Pilbara iron ore sales of 85.3Mt, which beat the consensus forecast of 83.13Mt. The company maintained its full-year guidance for Pilbara shipments at 323Mt to 338Mt and total iron ore sales at 343Mt to 366Mt, signaling steady operational performance despite regional volatility.
In a significant move for its base metals segment, the company lowered its 2026 copper C1 net unit cost guidance to a range of US 30-50c/lb, down from previous estimates. Copper production for the quarter stood at 213kt, as the company continues to ramp up its Oyu Tolgoi underground operations in Mongolia.
Geopolitical Tensions Escalate
Geopolitical risks intensified as President Donald Trump announced that U.S. strikes on Iran would continue "until I say it's enough." While current strikes have focused on military capabilities and coastal targets to keep the Strait of Hormuz open, Trump indicated that energy infrastructure and bridges would be targeted in the coming weeks if hostilities persist.
In London, the UK Foreign Office summoned Iranian Chargé d’Affaires Ali Nasimfar following reports of Iranian-backed proxy groups directing assaults across Europe. Concurrently, Iranian media reported explosions near Bandar Abbas and the Gulf islands, which local officials linked to ongoing naval clashes in the Strait of Hormuz.
Japan Market Developments
Nikkei 225 futures showed strong momentum, trading at 68,325 against a cash close of 67,743. Investor sentiment in the region was bolstered by reports that the Japanese government is considering lifting its ban on U.S. fresh potato imports, a move that could end a 30-year trade dispute and open a market estimated to be worth $150 million annually for American farmers.
Additionally, the Japan Financial Services Agency (FSA) announced plans to survey regional banks regarding their interest-rate risk exposure. This regulatory move comes as the global interest rate environment remains fluid, prompting Japanese authorities to ensure the stability of smaller financial institutions against potential market shifts.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.