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Gold gains as the dollar weakens, but Fed expectations and trade optimism limit gains
Gold prices rose on Monday, as the dollar remained just below the three-month highs reached last week. However, reduced expectations of further Federal Reserve rate reductions in December and eased U.S. China trade tensions limited gains. As of 0627 GMT, spot gold rose 0.3% to $4,014.59 an ounce. U.S. Gold Futures for December Delivery rose 0.7% to $4.025.10 an ounce. The U.S. Dollar Index was down by 0.1% compared to its rivals. This makes greenback priced bullion more affordable for holders of other currencies. Kelvin Wong, senior market analyst at OANDA, said that the gold price has increased because of the dollar's strength, which has stabilized in today's Asia trading session. The U.S. Fed reduced interest rates on October 29, for the second time in this year, by 25 basis points. However, Chair Jerome Powell’s hawkish remarks cast doubt on whether there will be further rate reductions in 2025. CME's FedWatch Tool shows that traders now give a probability of 71% for a rate reduction in December. This is down from 90% before Powell's remarks. Gold that does not yield is a good investment in low interest rate environments and economic uncertainty. Investors are watching other economic indicators, such as the ADP U.S. Employment Data and ISM PMIs, this week to see if they can change the Fed's hawkish position. The safe-haven strategy has decreased at this time due to the de-escalation in U.S.-China tensions. Wong suggested that it could be the rotation to a more risky play in equities, which is why gold hasn't seen a major upward trend. Last week, U.S. president Donald Trump agreed with China to reduce tariffs in exchange for Beijing's concessions on the illicit fentanyl market, U.S. soya purchases, and rare-earths imports. Other metals rose as well. Spot silver increased by 0.6%, to $49.92 per ounce. Platinum climbed by 2.3%, to $1604.21, and palladium gained almost 1%, to $1447.08.
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China's iron ore prices fall due to declining steel production and rising inventories
Iron ore prices weakened on Monday due to a decline in steel production in China and rising port inventories. There was also concern about a weakening of downstream demand. The January contract for iron ore on China's Dalian Commodity Exchange(DCE) dropped 1.82%, to 782.5 Yuan ($109.86) per metric ton. As of 0700 GMT, the benchmark December iron ore traded on Singapore Exchange was 1.59 % lower at $104.45 per ton. According to Mysteel, the capacity utilisation rate at Chinese blast-furnace steel producers fell by 1.3 percentage point to 88.6% on average, for the fifth consecutive week between October 24-30. Mysteel's data shows that the daily hot metal production, which is a measure of iron ore consumption, fell 1.5% from one week to another, reaching 2.36 million tonnes. Everbright Futures, a Chinese broker, predicted that overseas supply would continue to improve in November. Shipments and arrivals are expected to increase. Analysts from Galaxy Futures stated that while domestic steel production may improve in the fourth quarter of this year, the main issue is the rapidly declining end-user demand for iron ore. As part of China's government pledge to reduce the overcapacity, China's steel association, which is backed by the state, announced that its steel production would drop below 1 billion tonnes in 2025. SteelHome data shows that the total iron ore stocks across Chinese ports increased by 1.53% in a week to 135.6 million tonnes as of October 31. Coking coal and coke, which are both steelmaking ingredients, have also lost ground. They fell by 0.85% and 1.17 percent, respectively. All steel benchmarks at the Shanghai Futures Exchange declined. The price of rebar fell by 0.96%. Hot-rolled coil dropped 0.6%. Stainless steel declined 0.36%. Wirerod was flat. ($1 = 7.1230 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
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Peacock: ROI-Spain teaches Europe about modern economics
Spain continues to be the fastest-growing economy in the Eurozone, and has outperformed its peers again in the third quarterly. The Iberian nation's successful mix of policies offers lessons that are at odds with global political trends. Spain's economy has grown by 0.6% in the last three months, a rate slightly lower than the previous quarter but still well above the 0.2% for the Eurozone as a group. This continues a trend of positive growth over the past few years. The International Monetary Fund has recently ranked Spain the fastest-growing advanced country, increasing its growth forecast for 2025 to 2.9% after a 3.5% increase in 2024. This is well above the 1.2% 2025 forecast of the entire bloc. The healthy growth in Spain has contributed to a reduction of the debt/GDP, which dropped from 119% to 102% in 2018. The IMF predicts this ratio to fall into double digits in 2030. Many of Spain's EU counterparts are watching this trend with envy. It's a far cry compared to the early 2010s, when the country suffered a housing bust and an existential banking crises. What is the reason for this dramatic change? Tourism boom, effective use of recovery funds from the pandemic era, and an emphasis on high-value service have all played a key role. Spain's high level of targeted immigration is another key growth driver. This comes at a time when many EU nations want to reduce migration. SMART IMMIGRATION Spain is unique in Europe for promoting immigration as a positive. According to the Elcano Royal Institute, net international migration was responsible for the majority of Spain's 8.2 million population increase between 2000 and 2024. The institute stated that without net international migration, Spain's population would have grown by only a few thousand people. In an interview with The Guardian, Prime Minister Pedro Sanchez proclaimed this fact, stating that immigration accounted for 25% of Spain's GDP per capita and 10% of social security revenue, but only 1% of the public expenditures. Fitch, a credit rating agency, says that immigration has helped increase Spain's potential growth (the rate at which the economy can expand without causing inflation) to 2.0%. Banco de Espana (the country's central banking institution) says that Spain's recent migration has had a positive impact on the economy because it was geared toward skilled workers in sectors with bottlenecks. Spain has been able tap into a large pool of Spanish-speaking Latin American workers. Spain is a good example of how low productivity can be a burden on the major European economies. Green Boss Spain's sun-drenched weather is a key asset in its search for growth. It lends itself well to renewable energy. Spain is aiming to be carbon neutral by 2050. According to the International Energy Agency (IEA), its massive investments in solar, wind, and renewable hydrogen should boost employment, research and development, and growth in the next years. Spain has already reaped some benefits from its green drive, with some of the lowest wholesale prices for electricity in Europe. Spain, Europe's second largest car producer, has attracted major investments, including from Germany and China, Chery and CATL, after announcing in 2020 a 5-billion euro plan to attract the electric vehicle and battery manufacture. It is reported that BYD may also be interested. There have, however, been some bumps in the road. In April, Spain experienced the biggest blackout Europe has seen in over two decades. Although there's no evidence that the increased use of renewable energy was to blame, it is likely the result of the country failing to adapt its power infrastructure in order to keep pace with the rapid energy shift. STUMBLING BLOCK Madrid's policy mix may change in the next few years. Spain is not immune to the global trend of dissatisfaction towards the government. This is for a number of good reasons. Many Spaniards have been shut out of the housing markets due to high property prices. Even though unemployment is at levels not seen since 2008 almost 2,5 million people remain unemployed. The government is also facing corruption allegations which it denies. Recent opinion polls show that the next elections are due in 2027. Sanchez's ruling PSOE is lagging behind centre-right PP, but by a very small margin. Spain's decade-long history shows, despite all the rhetoric to contrary, that it is possible for Europe to increase productivity and to slow down negative demographic trends. It remains to be seen if other European countries will heed this message. The views expressed are those of Mike Peacock. He is a former director of communications for the Bank of England, and former senior editor of. This column is a great read! Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X.
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MUFG's climate loan fund has raised an initial $600 Million
Executives revealed that a climate finance platform, co-founded by MUFG (Japan's largest financial group), has raised $600 million in order to assist countries in developing markets to adapt to climate change impacts and reduce emissions. Bill Gates, a billionaire investor and business leader in Brazil, made the announcement as business leaders gathered ahead of COP30 climate talks. The GAIA Climate Loan Fund will support projects that build resilience in countries as extreme weather events like floods and droughts become more intense. Ariane Pvide, Director of Climate and Blended Finance, MUFG, stated in an emailed comment that "Adaptation Finance has become a hot topic at recent COPs." "We hope the closure of GAIA strengthens the argument for private capital focused on adaption as a blueprint for market." FinDev Canada (Canada's development finance agency) and the Green Climate Fund (the world's largest dedicated climate fund) also invested, with the goal of growing the fund to $1.5 billion. Amit Mohan is the Head of Private Credit at Climate Fund Managers. The fund's manager. In a press release, the fund's founders explained that it works by providing long term loans to state-owned, sovereign, sub- or quasi-sovereign entities in 19 countries. The money spent on adaptation, such as water management and sustainable agriculture, will be at least 70%, while the remainder is allocated to mitigation, such as renewable energies. It is expected to create 11,000 new jobs and benefit 19 million people, while avoiding 30 millions tons of greenhouse gas emissions per year. (Reporting and editing by Toby Chopra; Simon Jessop)
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Australia shares rise as Westpac shines, but gold stocks limit gains
Australian shares made modest gains on Monday as Westpac's record closing after a profit beating offset weakness in gold stock. Investors largely stayed the course ahead of this week's central bank policy decision. The benchmark S&P/ASX 200 index closed 0.2% higher, at 8,894.8. The benchmark index gained only 0.4% in October. Westpac's gain of 2.8% lifted heavyweight financials by 1.3%. Australia's third largest lender in terms of market value reported a modestly better-than-expected annual profit, sending its share price to a new record high. Investors look at the results to see if the trend and the net interest margins have improved. Lochlan Halloway is an equity market analyst with Morningstar. The benchmark index was also boosted by 2.3% at the top lender Commonwealth Bank of Australia. Gold stocks, however, saw a 1.4% drop, as the bullion price eased due to a stronger dollar, and a rising optimism in global trade. The two major gold producers, Northern Star Resources (Northern Star Resources) and Evolution Mining (Evolution Mining), lost 2.5% and 2.5% respectively. A 90% increase in the sub-index of gold this year is a result of an unprecedented rise in gold prices. This puts it on course for its best performance since its launch in about 20 years ago. Gold miners have fixed costs they must cover. Halloway explained that once they surpass the cash costs, they have more leverage over the gold price. The Reserve Bank of Australia is expected to meet on Tuesday, and will likely hold its key rate at 3,6%. Hotter than expected core inflation data from last week upset rate-cut bets. The benchmark S&P/NZX 50 closed 0.1% higher in New Zealand at 13,556.30. Reporting by Nichiket SUNIL in Bengaluru, editing by Eileen Soreng
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MORNING BID EUROPE - Private jobs on the spotlight amid data blackout
Ankur Banerjee gives us a look at what the future holds for European and global markets The markets are still recovering after a week of action packed events that have left the risk momentum intact. This week, the focus has shifted on a few private economic data that could shed light on the state of the U.S. labor market. The U.S. government shutdown is expected to continue, and there will no longer be any economic data from the government. So, no nonfarm payrolls, no JOLTS job openings. Investors will instead analyze private employment data provided by ADP in order to gauge the direction U.S. monetary policies. ADP's data will be released later this week. Investors are searching for answers due to a divided Federal Reserve. Fed Chair Jerome Powell shocked markets last week by expressing a hawkish attitude, suggesting that the recent rate reduction could be the final one of the year. Christopher Waller, the influential Fed governor, made a case for further policy easing on Friday to support a weakening labor market. CME FedWatch showed that traders are now pricing in only a 69% probability of a December rate cut, down from 90% one week ago. As Chinese stocks continue to fall, the afterglow from the much-anticipated trade truce has waned. This is the classic case of buying the rumour and selling the truth. Data released on Monday showed that China's factory output and new orders both declined amid the tariff fears. Meanwhile, big manufacturing hubs in other parts of the world also struggled to get going in October. Later in the session, markets will also be looking at similar reports from Europe. European futures indicate a higher opening, while the euro is hovering at a 3-month low. Powell's hawkish tones have helped boost the dollar, although analysts do not expect it to remain strong for very long. They suggest that data will soon reveal cracks in the largest economy of the world. Market developments on Monday that may have a significant impact Manufacturing data for October
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Investors reduce rate-cut betting as gold prices rise on stronger dollar
Gold prices held steady Monday as investors backed off their bets on further Federal Reserve rate reductions in the near future. Meanwhile, easing U.S. China trade tensions also dampened bullion demand. As of 0504 GMT, spot gold was unchanged at $4,000.65 an ounce. U.S. Gold Futures for December Delivery rose 0.4% to $4.010 per ounce. The dollar has risen to near a three-month high, and prices have fallen about 9% since the record high of $4381.21 set on October 20. Kelvin Wong, senior market analyst at OANDA, said: "There is a lack in upside momentum for gold due to technical factors. The dollar also remains resilient. This has a negative effect on gold." The Fed cut rates by 25 basis point on October 29, the second time in this year. However, Jerome Powell’s hawkish remarks following that cut cast doubt on further rate easing for 2025. CME's FedWatch Tool shows that traders now expect a rate reduction in December of 71%, down from 90% prior to Powell's comments. Gold that does not yield is a good investment in low interest rate environments and economic uncertainty. Investors are watching other economic indicators, such as the ADP U.S. Employment Data and ISM PMIs, this week to see if they can change the Fed's hawkish position. The safe-haven strategy has decreased at this time due to the de-escalation in U.S. China trade tensions. Wong added that it could be a shift towards a more risky play on the equity markets. Last week, U.S. president Donald Trump announced that he had agreed to reduce tariffs against China in exchange of concessions from Beijing on the illicit fentanyl market, U.S. soya purchases and rare earths imports. The price of palladium fell 0.1%, while platinum rose 1.5%, to $1,590.86. (Reporting by Ishaan Arora in Bengaluru; Editing by Subhranshu Sahu, Ronojoy Mazumdar and Harikrishnan Nair)
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Investors reduce rate-cut betting as gold prices rise on stronger dollar
Gold prices held steady Monday as the dollar strengthened. Investors were reducing their bets on further Federal Reserve rate reductions following Jerome Powell's recent hawkish comments. Meanwhile, demand for gold was also dampened by the easing of U.S. China trade tensions. As of 0250 GMT, spot gold fell 0.1% to $3.997.94 an ounce. U.S. Gold Futures for December Delivery rose 0.3% to $4.008.60 an ounce. The gold price has fallen about 10% since the record high of $4381.21 set on October 20, while the dollar is climbing to a three-month high. Kelvin Wong, senior market analyst at OANDA, said: "There is a lack in upside momentum for gold due to technical factors. The dollar also remains fairly resilient. This has a negative effect on gold." On October 29, the Fed cut interest rates for the second consecutive time by 25 basis points. CME's FedWatch Tool shows that traders now expect the Fed to cut rates in December by 71%, down from 90% before Powell made his remarks. Gold that does not yield is a good investment in low interest rate environments and economic uncertainty. Investors are watching other economic indicators, such as the ADP employment data or ISM PMIs, this week to see if they can change the Fed's hawkish position. Wong said that the safe-haven effect has diminished at this time due to the de-escalation in U.S. China trade tensions. It could also be a rotation to a play with much more risk in the equity market." Last week, U.S. president Donald Trump announced that he and Chinese President Xi Jinping had agreed to reduce tariffs against China in exchange of concessions from Beijing on the illicit fentanyl market, U.S. soya bean purchases, and rare earths imports. Silver spot rose 0.3% per ounce to $48,77, platinum was up 1% at $1,583,28, and palladium climbed 0.4% to $1439.21. (Reporting by Ishaan Arora in Bengaluru; Editing by Subhranshu Sahu)
Investors demand creation of International Minerals Agency
On Monday, a group of mining investors called for the creation of a new independent agency to oversee the sector. This would be modeled after the International Energy Agency.
A statement from the group of investors said that they manage or advise assets worth $18 trillion. The new International Minerals Agency will be able monitor global mineral demand and supply as well as illegal flow.
It added that the agency would also provide information about how companies are progressing towards global performance standards in sustainability.
The Global Investor Commission on Mining 2030 includes PIMCO as well as ING, L&G and Allianz Investment Management. Church of England Pension Fund, Royal London Asset Management and Allianz Investment Management are also members.
After meeting with the President of Brazil, Luiz inacio Lula da S Silva, it released a report aimed at providing a 10-year roadmap for a responsible mine sector. This was ahead of United Nations Climate Negotiations.
Peter Kindt is the global head of transition accelerators at ING.
This will require collaboration between multiple stakeholders and new initiatives, such as an International Minerals Agency. Reporting by Eric Onstad, London Editing by Matthew Lewis
(source: Reuters)