Gold Prices Approach $3,000 Amid Global Uncertainty

The spot gold price continues its record-breaking rally, edging closer to the psychological $3,000 mark as investors seek safe-haven assets. Market turbulence fueled by escalating tensions in the Ukraine-Russia conflict and tariff threats from U.S. President Donald Trump has driven strong demand for gold.

Analysts identify a support zone around $2,942 to $2,940, which may act as a temporary buffer before further movements.

WTI Crude Oil Rally Loses Momentum

The three-day bullish streak of WTI crude oil appears to have stalled due to an unexpected rise in U.S. crude inventories, suggesting a potential fourth consecutive week of stockpile growth. The supply glut has tempered upward momentum in prices.

For the rally to resume, WTI must break above the 55-day Simple Moving Average (SMA) at $72.36 and surpass Wednesday’s high of $72.87. If successful, prices could target last week’s peak of $73.64 and the 200-day SMA at $73.90. Meanwhile, strong support levels remain between $70.46 and $70.16.

Natural Gas Prices Hit Two-Year High

NYMEX natural gas futures surged past their January peak of 4,369, reaching a two-year high of 4,476 on Thursday. The sharp increase is attributed to extreme cold weather conditions, which have significantly boosted gas consumption while disrupting production, leading to supply constraints.

If bullish momentum continues, the next key resistance levels lie at 4,500 and the major psychological threshold of 5,000. However, should the market retrace, support may emerge near the January 24 high of 4,050.

Market analysts continue to monitor developments in global energy and commodity markets as geopolitical and economic factors drive price volatility.

The Sri Lankan government and India have reached an agreement to establish two solar power plants in Sampur, Trincomalee, with capacities of 50 MW (stage 1) and 70 MW (stage 2). The project will be developed as a joint venture between the Ceylon Electricity Board (CEB) and India’s National Thermal Power Corporation (NTPC) under a construction, ownership, and operation model.

The 50 MW solar power project will be implemented by Trincomalee Power Company Ltd, a partnership between CEB and NTPC, originally set up for the now-shelved coal power project in Sampur.

The Cabinet of Ministers has approved the proposal presented by the Minister of Power and Energy to proceed with the implementation of the project.

President Anura Kumara Dissanayake stated in Parliament that investigations have revealed the infiltration of underworld activities within official institutions responsible for public security. He assured that decisive measures would be taken to eliminate such influences, though the process would require time.

The President made these remarks during the inaugural meeting of the Ministerial Consultative Committee on Defence of the Tenth Parliament, which he chaired.

Discussions included the security of court complexes, with Justice Minister Harshana Nanayakkara proposing enhanced security measures, including modern technology to screen all individuals entering court premises.

MPs raised concerns about military-occupied lands in the Northern and Eastern provinces. In response, the Defence Secretary assured that a nationwide reassessment would be conducted before making decisions on their release.

Regarding military-run businesses, including hotels, the President stated that a study would be conducted to determine how these businesses could be redirected for economic benefits, particularly in the tourism sector.

Concerns over ethnic and religious tensions in the Northern Province were also addressed. The President emphasized the need to eliminate extremism from politics and stressed that issues should be resolved based on the genuine needs of local communities, warning against political exploitation of such matters.

Additionally, the establishment of a National Disaster Management Committee was proposed, and the President instructed officials to expedite the process.

Among those present were Deputy Speaker Dr. Rizvie Salih, Deputy Defence Minister Major General (Retd.) Aruna Jayasekera, ministers, MPs, Defence Secretary Air Vice Marshal Sampath Thuyacontha (Retd.), heads of the tri-forces, and other officials.

Justice Minister Harshana Nanayakkara announced that armed security personnel will be deployed inside court premises under special circumstances following the recent shooting at the Hulftsdorp Court Complex.

Responding to a question by SLPP Kalutara District MP Rohitha Abeygunawardena, the Minister acknowledged that existing regulations prohibit armed guards inside courtrooms. However, he stressed that the government is implementing measures to improve security, especially when high-risk individuals are brought before the courts. Discussions with the Judicial Services Commission, Police, and Prisons Department will finalize these security protocols.

Additionally, Nanayakkara revealed plans to amend the Code of Criminal Procedure to allow special category prisoners to testify via video conferencing from within prisons. This amendment has been submitted to the Cabinet for approval.

“This technology will improve access to justice and reduce the need for prisoner transport,” he said, adding that it will also enable testimony from individuals in foreign countries.

The Minister further emphasized that ensuring the safety of prison officers remains a top priority, given the threats posed by organized crime.

Fitch Ratings stated that Sri Lanka’s latest budget reflects the government’s commitment to increasing fiscal revenues as a share of GDP, a move that could help address long-standing weaknesses in the country’s credit profile.

However, the agency warned that significant risks remain, and a slowdown in fiscal consolidation could impact medium-term debt reduction prospects.

The budget, presented on February 17, is the first under President Anura Kumara Dissanayake and outlines the administration’s fiscal and economic reform agenda. Fitch noted that the budget aligns with its expectations from December 2024, when Sri Lanka’s credit rating was upgraded to ‘CCC+’ from ‘RD’ (Restricted Default).

Sri Lanka’s goal of raising revenue to 15.1% of GDP in 2025, up from 11.4% in 2023, surpasses Fitch’s earlier projection that this level would be reached by 2026. Key revenue increases are expected from taxes on external trade (36.5%) and income taxes (13.1%). However, Fitch highlighted that the success of these targets depends on the smooth liberalization of import restrictions, particularly for vehicles.

While the government aims for a primary budget surplus of 2.3% of GDP in 2025, interest payments are projected at 8.9% of GDP—higher than anticipated under Sri Lanka’s $3 billion Extended Fund Facility (EFF) with the IMF.

Fitch does not expect deviations from the EFF projections to lead to a suspension of IMF disbursements. However, it cautioned that slower fiscal consolidation, combined with optimistic growth projections of 5%, could limit debt reduction progress and leave Sri Lanka vulnerable to economic shocks.