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The dollar strengthens as gold falls; focus on Fed minutes and US jobs data
The dollar's strength pushed gold down on Wednesday, as investors awaited the minutes of the Federal Reserve's most recent policy meeting. They also awaited the U.S. employment report which could shed light on the Federal Reserve interest rate trajectory. As of 0201 GMT, spot gold was down by 0.2%, at $4,059 an ounce. U.S. Gold Futures for December Delivery edged down 0.1% to $4,061.60 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that the strong USD and uncertainty about the timing of the next Fed rate reduction has slowed gold's momentum. Gold has been a safe play for investors due to a recent bout of risk aversion, which has helped limit the decline. The dollar rose 0.1% against its competitors. Gold becomes more expensive when the dollar is stronger. The global equity markets have been in a downward spiral this week. The S&P 500 is on a 4-day losing streak due to concerns over the valuation of AI stocks. Investors are now awaiting the minutes of the Fed's most recent meeting which is due to be released in the afternoon, as well as the September non-farm employment report that will be released Thursday, after having been delayed by the recent U.S. shutdown. The economists polled expect that the report will show employers adding 50,000 jobs in the month. The number of Americans who received unemployment benefits reached a two-month-high in mid-October, according to data released on Tuesday. The U.S. Fed cut interest rates last month by 25 basis points. However, Chair Jerome Powell expressed caution about another rate reduction this year due in part to the lack data. CME Group’s FedWatch tool shows that traders now expect a rate reduction at the Fed’s meeting on December 9-10. Gold that does not yield tends to perform well in low interest rate environments and times of economic uncertainty. Other than that, silver spot was unchanged at $50.70 an ounce. Platinum fell 0.5% to 1,527.63 and palladium dropped 0.3% to 1,396.68.
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Asia markets sway as Nvidia earnings test approaches
Investors were held back by a wave of nervousness over AI valuations ahead of a quarterly earnings report from Nvidia. The Nasdaq, a tech-heavy stock, fell by 1.2% over night. It was the second consecutive day that it lost money. It is now more than 6% lower than its record high reached in late October due to valuation fears. S&P 500 and Nasdaq futures were flat during the morning Asian session. Japan's Nikkei index made a shaky 0.4% increase, while South Korea's Kospi dropped 0.8%. Nvidia is the company that sells graphics processing units, the GPUs, that are the foundation of artificial intelligence. This rally has taken stock markets all over the world to new highs, and has lifted stocks with even the slightest AI connection. It will report after the close of U.S. markets and, according to LSEG data, is expected to see a 56% increase in revenue for its August-October fiscal quarter to $54.92 Billion. Wong Kok Hoi is the founder and CEO of APS Asset Management, a Singapore-based asset management firm. JAPAN BONDS SLIDER Investors worry about the impact of President Donald Trump’s declining approval rating on fiscal spending, which could lead to inflation. This has prevented safe haven U.S. Treasuries to gain even though the mood of the market has soured. The yields fell overnight, but they were only marginally lower than the previous day. The benchmark 10-year rate was also unchanged at 4.11%. The markets are now pricing in a 42% probability of a Federal Reserve rate reduction of 25 basis points in December. This was a near certainty just a month earlier. "If, and this is a big if, the growth slows down, can we expect the same fiscal support that was provided during the pandemic, or the global financial crises, given the fact that governments' fiscal position has deteriorated significantly since then?" Rob Subbaraman, Nomura's chief economist, said: Concern over the government's spending plans have sent Japanese long-end bonds tumbling and yields reaching record highs. The 20-year auction will be closely monitored on Wednesday. Benchmark 10-year yields have reached a 17-year high of 1.765%. Bitcoin Bounces Back From Below $90,000. The mood-barometer Bitcoin has slightly recovered from its trip to a low of seven months on Tuesday, trading at $92,000. This is still 27% below the record high of October. "BTC is erasing this year's gains, and then some. Anyone who has acquired in the last 10 months will be underwater," said Justin d'Anethan. He's head of research for Arctic Digital, a crypto advisory and investment firm. "But I do not think that this is the start of a bear-market, but just a response to equity prices falling, disappointing expectations for rate cuts, and leverage being cleared out." The foreign exchange market was largely on hold as buyers gravitated towards dollars. The yen is at 155.45 dollars per yen and has reached a level where the authorities have warned about intervention. In the morning, the euro remained at $1.1582, while Australian and New Zealand dollar were slightly lower. Gold, which reached record highs along with stocks in October has also declined and suffered losses of $4,066 Wednesday. Brent crude futures dipped 35 cents to $64.51 per barrel. After China bought large quantities of U.S. soybeans, soyabeans reached a high not seen in 17 months. (Reporting from Tom Westbrook, Singapore; Editing done by Sonali Paul.)
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Prices of oil fall due to rising US inventories
The price of oil fell on Wednesday, as a report from the industry showed that crude and fuel stocks in the U.S. - the world's largest crude consumer - rose in the previous week. This reinforced the growing concern about the oversupply in the market. Brent crude futures fell 28 cents or 0.43% to $64.61 per barrel at 0200 GMT after rising 1.1% the previous session. U.S. West Texas Intermediate Crude Futures fell 24 cents or 0.4% to $60.5 per barrel after rising by 1.4% on Tuesday. Market sources reported late Tuesday that U.S. crude oil and fuel stockpiles rose during the past week. They cited American Petroleum Institute data. API, citing sources, reported that crude stocks increased by 4.45 millions barrels during the week ending November 14. Gasoline inventories rose by 1.55million barrels while distillate inventories grew by 577,000. In a report published on Wednesday by the Chinese brokerage Haitong Futures, API data showing increases in crude and fuel stocks "pointed out a weakening of demand and lowered outlook for oil price." The official U.S. Government inventory data will be released on Wednesday. Eight analysts polled ahead of the data release estimated that crude inventories would likely have fallen by approximately 600,000 barrels during the week ending November 14. The price of oil rose on Tuesday, as investors weighed the impact of U.S. sanction on Russian oil exports. Also, Ukrainian attacks on Russian export terminals and refineries have raised concerns about fuel and crude shortages. Analysts have forecast that the oil production is above current demand. This has pushed prices up. Profit margins in Europe for diesel fuel production have soared following Ukrainian attacks on Russian energy infrastructure and port infrastructure. They reached their highest level since September 2023 Tuesday. The increase in global refinery margins is causing this to happen. The Haitong Report noted that the "strong diesel market has supported oil prices, but the persistent crude supply is keeping investors cautious to chase further gains in crude." A senior White House official stated on Monday that U.S. president Donald Trump was willing to sign legislation moving through Congress adding new Russian sanctions as long as it retained his final authority to implement the law. The oil price should be supported by further secondary sanctions against Russian crude buyers. (Reporting and editing by Christian Schmollinger; Sam Li in Beijing, Lewis Jackson)
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Vulcan Elements, a rare earth magnet company, will build a $1 billion North Carolina facility
Vulcan Elements is a rare earth magnet manufacturer based in North Carolina. It announced on Tuesday that it would build a $1 Billion manufacturing facility to supply U.S. electronic and military customers. The facility is to be located in Benson, about 30 miles (48km) south of Raleigh. This would increase U.S. accessibility to magnets which convert power into motion in electric vehicles, mobile phones, fighter planes, and thousands of products. These magnets are the focus of a global trade dispute as China is using them to leverage negotiations with the Trump Administration. John Maslin, CEO of the company, stated that North Carolina was chosen over other states because it has a workforce devoted to engineering and offers economic incentives. The plant is located in North Carolina's "Research Triangle" near universities, military bases and laboratories. The workforce is the most important thing to us. Maslin stated that the most important thing was to find PhDs, engineers and technicians from complementary industries. The United States was once the largest magnet manufacturer in the world, but it lost that expertise during the 20th century. Maslin stated that Vulcan's technology for magnets was developed by one of its co-founders and that the company doesn't anticipate any patent issues. North Carolina estimates that the facility will boost North Carolina's economy by $2.6 Billion. Vulcan would be eligible to receive $17,6 million from the state if that were to happen. Vulcan signed an agreement with ReElement Technologies in August to supply rare earth oxides. Vulcan would have to convert the oxide into a metal first before turning it into magnets. Maslin stated that the metallization will take place in the Benson facility. He declined to state if Vulcan, or another party, would be responsible for this step. Vulcan wants to produce 10,000 tons of magnets per year, and a "significant amount" of this production will be online by 2027. This is about the same amount of magnets that MP Materials plans to produce at its Texas magnet plant. (Reporting and editing by Lincoln Feast; Ernest Scheyder)
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Vulcan Elements, a rare earth magnet company, will build a $1 billion North Carolina facility
Vulcan Elements of North Carolina, a rare earth magnet manufacturer, announced on Tuesday that it would build a $1 Billion manufacturing facility in the state to supply U.S. electronic and military customers. The facility is slated to be built in Benson, about 30 miles (48km) south of Raleigh. It is partially funded by grants from Pentagon. This would increase U.S. accessibility to magnets which convert power into motion in electric vehicles, mobile phones, fighter planes, and thousands of products. These magnets are the focus of a global trade dispute as China is using them to leverage negotiations with the Trump Administration. John Maslin, CEO of the company, stated that North Carolina was chosen over other states because it has a workforce that is focused on engineering and offers economic incentives. The plant is located in North Carolina's "Research Triangle" near universities, military bases and laboratories. The workforce is the most important thing to us. Maslin explained that the key was to find PhDs, engineers and technicians from complementary industries. There is no large magnetics workforce in the United States, because it has been hollowed-out. We need to rebuild this muscle. North Carolina estimates that the facility will boost North Carolina's economy by $2.6 Billion. Vulcan would be eligible to receive $17,6 million from the state if that were to happen. Vulcan signed an agreement with ReElement Technologies in August to supply rare earth oxides. Vulcan would have to convert the oxide into a metal first before turning it into magnets. Maslin stated that the metallization will take place in the Benson facility. He declined to state if Vulcan, or another party would be responsible for this step. Vulcan's target is to produce 10,000 tons of magnets per year, and a "significant amount" of this production will be online by 2027. This is about the same amount of magnets that MP Materials plans to produce at its Texas magnet plant. (Reporting and editing by Lincoln Feast; Ernest Scheyder).
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After protests, Peru lawmakers extend mining permits
The Peruvian Congress approved on Tuesday a bill that would extend temporary permits to informal miners through the year 2027. This was done as over a thousand protesters gathered outside the legislative building against the impending expiration of the permits. The bill is now going to be discussed in full plenary sessions of Congress before it can be approved. The REINFO program, which provides a temporary legal status and has been extended multiple times, is set to expire on December. The day before, miners protested again because they felt that the government's efforts to force them into formalizing their claims were too complicated and expensive. Most of these gold miners want an additional five years to leave the temporary system. Mining companies and professionals in the industry have expressed concern that another extension would increase illegal activity. The REINFO scheme, they say, has allowed illegal miners to profit, sometimes working alongside criminal gangs. This debate is just five months away from general elections, in which many lawmakers are running for re-election. Maximo Franco bequer, a union leader, said that he had met with Jose Jeri on Friday. Jeri took office in the month of January. Bequer reported that the president had "promised" to assess the situation with informal miners before he took a position regarding any possible decision made by Congress. Peru is one of the world's leading mining countries, and it exported gold worth $15.5 billion in 2024. According to data from the sector and the country's financial regulator, an estimated 40% of this gold is illegally sourced. (Reporting and Additional Reporting by Anthony Marina, Writing by Natalia Siniawski, Editing by Brendan O'Boyle & Lincoln Feast.
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US lends Constellation $1 Billion for Three Mile Island Reactor Reboot
The Trump Administration announced on Tuesday that it had loaned Constellation Energy Corp. $1 billion in order to restart the nuclear reactor of a Pennsylvania facility formerly known by the name Three Mile Island. Constellation and Microsoft signed a contract in 2024 to restart an 835 megawatt reactor that shut down in 2019. This would offset Microsoft’s data center energy use. The plant's other unit, now called the Crane Clean Energy Center after a 1979 accident that froze the nuclear industry, was shut down in 1979. The U.S. is experiencing its first increase in power demand since the 1990s, thanks to technologies such as artificial intelligence. The use of nuclear energy, which emits virtually no carbon, is now an option for companies that have a constant need for power and are committed to climate change. The critics point out that America has not found a permanent solution for radioactive waste. Greg Beard, the head of Energy Department's Loan Programs Office (LPO), said that the restart will support the PJM Regional Grid. Beard, who spoke to reporters, said that this type of energy was important because it is a large, stable and affordable base-load power. Constellation says the loan will lower its cost of financing, and help leverage private investment in order to restore electricity to the grid. Beard stated that the LPO had more than $250 billion of capital. "We expect a large part of this to be used to reinvigorate large-scale reactor development," he said. Chris Wright, Energy Secretary, said in a statement this month that most of the LPO funds would be used for nuclear projects. Constellation had accelerated the restart of the reactor in June by about a decade to 2027, after PJM accelerated its review process for connecting the project to grid. Constellation has ordered major equipment and hired hundreds of employees. It also completed inspections of the infrastructure. The reactor will require a new cooling tower, a new main power transformer, among other items, as well as refueling before electricity can be produced. Beard stated that this was the first instance the LPO had declared a company to have met all the conditions for a lending and then closed the loan at the same moment. He said Constellation was guaranteeing the loan and this loan structure would protect the taxpayers in the event the project did not succeed. Beard stated that Constellation was an established "investment grade" nuclear operator who could have obtained a bank loan even without government assistance. "But we are showing our support for reliable, affordable, stable and secure energy in the U.S. as directed by (Donald Trump)." Constellation announced this year that the plant needs to be approved by both the U.S. Nuclear Regulatory Commission as well as water related permits.
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Ukraine to sue Russia for $44 billion in wartime emissions
A government minister said that Ukraine will seek $44 billion in damages from Russia to compensate for damage caused by the war's increased emissions of greenhouse gases. This is the first time that a country has sought damages from Russia for an increase in climate-warming emissions from a war. The increased emissions include those from fossil fuels, steel, cement, and other materials used to fight the conflict, as well as the fires caused by the burning of trees. Pavlo Karashov, deputy minister of economy, environment and agriculture, said that "a lot of damage had been done to the water, land, and forests." Kartashov said in an interview at the sidelines of COP30 Climate Summit in Brazil that "we have enormous amounts of CO2 emissions and other greenhouse gases." A member of Russia's delegation at COP30 refused to comment. Lennard de Klerk, a Dutch expert in carbon accounting, estimated that the war generated 237 millions tons of CO2-equivalent additional emissions since Russia invaded Ukraine in February 2022. This is nearly the same as the annual emissions of Ireland, Belgium, and Austria combined. De Klerk said he helped Ukraine calculate the damages figure, based on an article in Nature from 2022 that estimated the social cost of CO2, or the estimate of damages caused to society by CO2, to be about $185 per ton. He said that Ukraine was preparing a claim under a new compensation procedure being established by the Council of Europe, which has already received around 70,000 claims from Ukrainians for damages caused by war. A claims commission will decide on all claims, even those filed by legal entities like companies. Uncertainty remains about the source of compensation. De Klerk said that billions in frozen Russian assets might be used to cover the claims. Reporting by Simon Jessop, Sebastian Rocandio and Nia William; Editing by Katy Daigle & Nia Williams
Albanese: Australia will not veto Turkey’s COP31 Summit bid
Anthony Albanese, the Prime Minister of Australia, said that Australia would not oppose a successful Turkish bid for next year's COP31 Climate Summit. He warned, however, that a prolonged dispute over hosting rights might undermine the unity needed to assist Pacific Island nations.
Australia and Turkey both submitted bids to host COP31 in 2022 and neither have withdrawn their bids. Albanese ruled out joint hosting earlier this week, stating that UN rules prohibit co-hosting for the annual summit.
On Tuesday, he stated that there is "considerable concern", from many countries, Pacific nations included, about the possibility of a lack of consensus jeopardizing efforts to create a united diplomatic front on climate change.
We would not try to block the selection of Turkey, or Australia, in that case. Albanese, a reporter at the time, said that they would try to make sure that Pacific countries benefited.
"We're continuing our engagement... with Turkey and other countries to ensure that the Pacific interests are taken care of."
A spokesperson for the Australian government said that Australia has not abandoned its bid, and they expect Turkey not to block Australia in case it wins.
We would not block the bid of Turkey if it were selected. Turkey has not been selected. "Australia has overwhelming support from our peers", the spokesperson said.
Australia, backed up by 18 members of the Pacific Islands Forum, has been campaigning to host COP31 along with Pacific island nations. Many Pacific States are at the forefront of rising sea levels, and have called for greater global efforts to reduce emissions and finance climate change.
According to U.N. regulations, the 28 member "Western Europe and Others Group", which includes Australia and Turkey and is hosting COP31, must make a unanimous decision. COP30 in Belem Brazil is currently taking place and will end on Friday.
If neither Australia or Turkey backs off, the conference will default to Bonn, Germany. Germany has stated that it does not wish to host the conference.
(source: Reuters)