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Gold gains on dollar decline and Fed rate cuts
Gold prices rose Thursday on the back of dollar weakness and the Federal Reserve's rate cut. Investors, however, remained cautious regarding the outcome of an agreement between the U.S. president and the Chinese president. As of 0642 GMT, spot gold was up 0.9% at $3,964.09 an ounce. U.S. Gold Futures for December Delivery fell 0.6% to $3977.10 an ounce. Dollar index dropped 0.2% on Thursday after reaching a two-week peak against its rivals. This makes gold more affordable to holders of other currencies. "There is no catalyst other than a little technical bounce. This week, gold has been under pressure. The U.S. China trade deal is a negative for geopolitics and trade, according to Capital.com analyst Kyle Rodda. Gold is also negatively affected by the Federal Reserve's hawkish stance and the decline in odds of another rate reduction in December. This dynamic could cause gold to continue its decline. "Gold is on the rise in the long term." The U.S. Central Bank cut rates on Wednesday by a quarter-point for the second consecutive time in this year. This brings the benchmark overnight rate down to a range of target of 3.75% - 4.00%. Fed Chair Jerome Powell stated that officials are still struggling to come to a consensus on what the future holds for monetary policies and warned markets not to assume another rate reduction in December. Gold that does not yield is a good investment in low interest rate environments and economic uncertainty. Trump also said that he had reached a deal with China to lower tariffs in exchange for Beijing continuing U.S. purchases of soybeans, maintaining rare earth exports and crackingdown on illegal fentanyl traffic. Trump's remarks came after a face-to-face meeting with Xi, in the South Korean town of Busan. During his whirlwind Asia tour, he had also praised trade agreements with South Korea and Japan, as well as Southeast Asian countries. Spot silver increased 0.2%, to $47.65 an ounce. Platinum rose 0.6%, to $1.595.14, and palladium gained 1.3%, to $1.418.65. (Reporting and editing by Sumana Nady and Subhranshu Sahu in Bengaluru.
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US granted a reprieve on rare earths from China but no rollback
As part of a deal between Donald Trump and Xi Jinping Presidents, China agreed to postpone the implementation of its latest round rare earth export controls. However, earlier restrictions on these critical minerals which have disrupted global trade still remain. Export restrictions imposed this year, which allowed Beijing to cut foreign customers who depended on Chinese supplies, have transformed rare earths from an obscure element into China's strongest negotiating tool. Trump and Xi held a two-hour meeting in South Korea on Thursday. After the summit, the U.S. President said that China had agreed to continue rare earth exports and the matter was "settled". According to a press release by the Ministry of Commerce, China announced shortly after that it would suspend for a year its export controls introduced on September 9, when Beijing expanded their rare earth export regime in order to include new rules and materials. The pause in action appears to have left in place the restrictions that were introduced in April, which controlled the exports of rare earths, and in particular, rare earth magnets, which are vital to automakers and chipmakers. Jamieson Greer said that China will not implement its proposed controls on rare earths. He was speaking also on Air Force One Thursday. He didn't mention the controls that were introduced in April. The April controls caused shortages in the automotive supply chain within a few weeks. This forced automakers to stop production at certain plants. Tim Zhang, the founder of Edge Research in Singapore, said that China's statement - which included a promise to study and refine its plans - provides Beijing with enough flexibility and ambiguity to fulfill a rare earth agreement with the U.S. He said: "Overall, I would describe this as a moment of tactical stabilisation." (Reporting and editing by Lincoln Feast, Emelia Sithole Matarise, and Lewis Jackson in Beijing)
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Goldman Sachs: Copper's breakout above $11,000 will be brief.
Goldman Sachs stated on Thursday that current copper market fundamentals warrant a price consolidate towards the upper end of their forecast range between $10,000 and $11,000 per metric tonne, but added that any break higher will not be sustained. Copper Smashed On Wednesday, the price of gold surpassed its previous record of $11,104.50 to reach $11,200. This was due to concerns about supply and hope for a U.S. China trade agreement. Analysts questioned, however, how far the rally could go without a sustained increase in demand. The copper price fell on Thursday as the stronger dollar put pressure on this greenback priced asset. Goldman Sachs stated that it does not expect the fundamental tightness in the copper markets to emerge within the next six-months. It said that the market would be in a modest surplus by 2026, even if you account for a significant decline in global refined product. The investment bank stated that this is in line with its forecast of $10,500 per tonne copper for 2026. It said that if the tightening market thesis does not materialize, investors will start to exit their long positions in copper in early 2026. Goldman stated that although LME copper investor positions are stretched, COMEX interest is still low in comparison to the peak of 2024's second quarter, suggesting that further investor inflows could temporarily lift LME copper prices. (Reporting by Ishaan Arora and Swati Verma in Bengaluru; Editing by Harikrishnan Nair)
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After Trump-Xi's meeting, iron ore prices fall on the back of profit-taking
Iron ore futures fell on Thursday as profit-taking impacted the market after the leaders of the two largest economies met. U.S. president Donald Trump announced on Thursday that he and Chinese President Xi Jinping had agreed to reduce tariffs against China in exchange for Beijing crackingdown on the illicit fentanyl market, resuming U.S. soya bean purchases, as well as keeping rare earths imports flowing. After hitting a session high of more than 810.5 Yuan, the most-traded contract for January iron ore on China's Dalian Commodity Exchange closed daytime trading 0.38% higher. As of 0700 GMT the benchmark December iron ore traded on the Singapore Exchange had fallen 0.48% to $106.65 per ton after reaching its highest level since October 14, at $107.6. The recent price rally had already exceeded expectations. However, spot trading was unable to provide the same level of momentum. Therefore, it is not surprising that futures prices have corrected down since hitting their recent peak, said Steven Yu. Yu said that the prices are also under pressure due to expectations of an acceleration in portside inventory. Investors were cautious about signs of seasonal weakness in the steel market, despite cheering macroeconomic growth. China's factory output likely fell for the seventh consecutive month in October as producers tried to export their price wars at home. Some investors took profits because they were worried about a possible price drop, which led to a softening of the price," said an anonymous Zhejiang trader who was not authorized to speak with media. On the back of expectations that supply will be constrained, coking coal and other steelmaking components, such as coke, have gained further momentum, with gains of 1.62% and 0.59 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange have fallen. Rebar fell 0.38%; hot-rolled coils dropped 0.33%; stainless steel declined 0.39%, while wire rod rose 0.42%. $1 = 7.1230 Chinese Yuan (Reporting and editing by Subhranshu Sahu, Rashmia Aich and Lewis Jackson)
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Covestro cuts full-year guidance and says ADNOC is on track to close the deal in Q4
Covestro, a German chemicals company, lowered its core profit forecast for the full year on Thursday because of soft demand. However, it said that its financial stability will be assured as ADNOC's $17 billion acquisition by Abu Dhabi is expected to close during the fourth quarter. Covestro's earnings before interest taxes, depreciation, and amortization are now expected to range between 800 and 700 million euros. This is a drop from the two previous cuts it made this year. The previous estimate was that the EBITDA would range between 700 million and 1.1 billion euro. The company's products, including foam chemicals used in mattress, car seats, and building insulation, were a major oversupply on the U.S. market, especially from Asia-Pacific, causing a significant drop in price. Covestro said Thursday that an incident at a Dormagen external substation, Germany, would result in negative financial impact of low-three-digit millions for the entire year. The company's consensus stated that its third-quarter EBITDA dropped 15.7%, to 242 millions euros. This was better than the average analyst estimate of 183million euros. The company stated that the closing of ADNOC's takeover is expected to occur in the fourth quarter. The EU regulator was worried that ADNOC may have used state subsidies in order to purchase the chemicals company, which is its largest acquisition and one of the biggest foreign takeovers by a Gulf State of an EU-based company.
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Climate change threatens to erode the cradle of civilisation in Iraq
Iraqi officials have raised the alarm about the danger of losing thousands of years of history as Iraq's ancient cities in the south face erosion due to climate change. The harsh, dry weather increases the salinity of the soil, damaging historical monuments such as Ur, where Abraham the Biblical patriarch was born, and Babylon, which once held the capital of an empire. Sand dunes have caused the deterioration on the northern side the Ziggurat, an ancient stepped pyramid temple dedicated to Nanna, the moon goddess, more than 4,000-years ago. The combination of wind and dunes causes the northern parts of the structure to be eroded, said Abdullah Nasrallah an archaeologist in the Dhi Qar Province - which is where the city Ur is located. ANCIENT MUD BRICKS ARE NOW SALT-FREE The shrine is a UNESCO World Heritage Site and remains one of best preserved examples of ancient Mesopotamian architectural styles. It offers an insight into the religious practices and sacred ceremonies of the Sumerian Empire, where one the first civilisations in the world flourished. Nasrallah stated that the erosion of the second layer has begun. "While the third (of the Ziggurat's) layer had already degraded due to climate change and weathering, the erosion now affects the second layer," he said. Salt deposits are eroding the mud bricks of Ur's Royal Cemetery, which was discovered in the 1920s by British archaeologist Leonard Woolley. The Royal Cemetery is now at danger of collapse. Dr. Kazem hassoun, an antiquities inspector in Dhi Qar, said that the salt deposits were caused by global warming and climate changes. This led to the destruction important parts of this cemetery. Hassoun stated that "ultimately, the deposits would cause the total collapse of the mud-bricks which make up this graveyard." Iraq has been battling high temperatures and droughts, which have led to an increase in salinity in the south of the country where the Tigris River and Euphrates River converge on their way to the Gulf. The archaeological sites of ancient Babylon, further up the Euphrates are also in danger. The sites need urgent attention and restoration but lack of funds is a problem, said Dr. Montaser Al-Hasnawi of the Iraqi Ministry of Culture and Tourism. The country has endured decades worth of wars that have threatened its historic structures. From the 1980s conflict with Iran, to the Gulf War in the early 1990s and the 2003 U.S. invasion, followed by insurgent violence, and the rise and collapse of the Islamic State. Climate change is the latest threat to its future, threatening not only its agricultural industry, but also its historic footprint. High salinity levels in Babylon are threatening the ancient clay-based structures on which Sumerian drawings can still be seen. Materials were directly sourced from land that was lower in salinity. Hasnawi explained that this could have made the structures less susceptible to climate change. However, improper restoration practices during previous decades had made them more vulnerable. The need for a new restoration is made more urgent by the rising salinity. The salinity of surface and underground water is increasing. Hasnawi stated that this will result in the destruction of many underground cities.
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Trump announces that the US will reduce fentanyl's tariff to 10% following talks with China’s Xi
After his meeting with Chinese President Xi Jinping, Donald Trump announced on Thursday that the United States would reduce its tariffs on Chinese products from 20% to 10%. Trump said that Xi would work "very hard" to stop the flow of fentanyl and that the tariffs were reduced "because they really are taking strong actions." Trump described his meeting with Xi Jinping as "an incredible meeting" and said that many decisions were taken. Trump announced that China would purchase "tremendous quantities" of U.S. soya beans and other farm products, "starting immediately". A one-year agreement regarding rare earths was also reached and will be extended at the end of a year. He said, "They won't impose rare earth controls." Trump said earlier that he expected to lower U.S. Tariffs on Chinese Goods in exchange for Beijing’s commitment to curtail the flow of precursor chemical to make fentanyl. Fentanyl is a deadly synthetic drug and the leading cause of American Overdose Deaths. Beijing wants to lift the 20% tariffs on fentanyl and other products. Trump spoke to reporters aboard Air Force One as it left South Korea for the final leg of his Asia tour. Trevor Hunnicutt, Jack Kim and Joyce Lee reported from Seoul. Clarence Fernandez edited the story.
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Saudi Arabia's third-quarter economy grew by 5%, according to government estimates
Saudi Arabia's third-quarter economy grew by 5% from the previous year, according to government estimates released Thursday. The growth is largely driven by oil, as production increases. Preliminary data from the Statistics Authority showed that oil activities grew by 8.2% on an annual basis, followed closely by non-oil activities, which grew 4.5%, and government activity, which grew 1.8%. The third quarter's seasonally adjusted real GDP grew by 1.4% compared to the second quarter due to a 3.1% increase in oil activity. The growth in non-oil activities was 0.6% quarterly. Saudi Arabia's economy is expected to grow this year as a result of the gradual unwinding by the OPEC+ nations, of which Saudi Arabia is a major member. After several years of reducing production to support the oil markets, the group that includes Russia began to ease these curbs in April. The Ministry of Finance has predicted a real GDP growth rate of 4.4% by 2025. This is up from the 2% growth last year. This growth will be driven by non-oil related activities. This month, the International Monetary Fund increased its forecast of real GDP growth for 2025 from 2% to 4% due to an increase in oil production. The world's largest oil exporter, Saudi Arabia, is undergoing a massive transformation led by Crown Prince Mohammed bin Salman. Vision 2030 is designed to increase revenue and growth from non-oil sources and reduce dependence on hydrocarbons. The Economy Minister said Wednesday that the country is on a long-term restructuring journey to economic diversification.
China purchases less Russian coal in 2024 regardless of record imports
China, the world's leading coal importer, bought less Russian coal in 2024 while increasing purchases from other key providers, led by Australia, throughout a. record year for coal imports, customs data revealed on Monday.
Purchases by China in 2015 reached an all-time high of. 547.2 million tons, or a record 41% of internationally traded coal,. according to LSEG research, providing China increased rates power. in international markets.
Chinese need is helping assistance rates at levels that,. according to the International Energy Firm (IEA), are 50%. higher than the average during the 2017-19 period.
In 2015, imports from leading supplier Indonesia ticked up 8%. to 236.99 million loads, although that lagged the 14.4% growth. in general in coal imports.
While Russia remained China's number-two coal supplier it. was the only secret producer whose deliveries to China fell in 2024. Chinese imports from Russia slipped 7% from 2023 levels to 93.86. million, weighed down by sanctions, renewed import tariffs by. China, and export responsibilities that Russia imposed throughout the year.
Australian exporters by contrast were the biggest. beneficiary of the record imports. Imports from Australia leapt. 59% on the year to 83.24 million loads, exceeding the level in. 2020, the last full year before China put an informal ban on. imports of Australian coal.
China had imported 77.51 million lots of Australia coal in. 2020, then purchased practically none in 2021 and 2022. It raised the. constraints on coal in January 2023 in the middle of a warming of. Beijing-Canberra relations that also caused the resumption of. barley and red wine trade.
Mongolian coal imports by China also increased 19% to 82.82. million tons due to the fact that of improved cross-border facilities,. but it was narrowly overtaken by Australia and was up to 4th. location.
(source: Reuters)