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Gold surpasses $3,900/oz in first ever bids for safe-haven bids
Gold prices soared above $3,900 an ounce for the first-time on Monday. This was due to safe-haven demand after a drop in the yen, a U.S. shutdown and growing expectations about further Federal Reserve rate reductions. Gold spot was up 0.9% to $3,922.28 an ounce at 0208 GMT after reaching a session high of $3.924.39 earlier. U.S. Gold Futures for December Delivery gained 1%, to $3947.30. Tim Waterer, Chief Market Analyst at KCM Trade, said that the yen's weakness following the Japanese LDP election has made gold a more attractive safe-haven for investors. The enduring U.S. shutdown has left a cloud over the U.S. economic outlook and its potential impact on GDP. Waterer says that gold is the best asset to invest in under these conditions, especially with the Fed expected this month to further cut rates. After fiscal dove Sanae Takaichi won the election to lead the ruling coalition and become the new prime minister, the yen plunged the most against the dollar in five months. A senior White House official stated on Sunday that the Trump administration would begin mass layoffs if U.S. president Donald Trump determines that negotiations with Congress Democrats to end the partial government shutdown "absolutely are going nowhere". Fed Governor Stephen Miran again pressed for a rate-cutting trajectory aggressive on Friday. He cited the impact of Trump's economic policy. The gold price has increased by 49% this year, after rising 27% in 2024. This is due to strong central bank purchases, an increase in demand for exchange-traded fund (ETF) backed with gold, a lower dollar, and increasing interest from retail investors looking to hedge against trade and geopolitical tensions. Last month, the rally received a new boost after the Fed reduced rates by a quarter-point and announced that it would continue to lower borrowing costs throughout the remainder of the year. Investors are estimating that there will be additional 25 basis-point cuts both in October and December. The probabilities for these cuts are 95% and 83% respectively. Gold that does not yield is a good investment in low-interest rate environments and economic uncertainty. Spot gold first broke through the $3,000 per ounce level in March, and then $3700 by mid-September. Many brokerages are bullish about the rally. The price of palladium rose 0.8%, while the price of platinum increased 1.1%, to $1621.90. (Reporting and editing by Sumana Nandy, Subhranshu Saghu and Brijesh Mukherjee from Bengaluru).
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Markets are jolted by politics as Japan stock prices soar 4% and bitcoin reaches a record high.
Sanae Takaichi, the fiscal and monetary dove who was recently elected leader of the ruling Party, has now become Japan's first woman prime minister. Gold reached a new record high above $3,900 on Sunday. The leading cryptocurrency, bitcoin, also rose to a lifetime-high. Investors are increasingly looking to alternative assets to store value, as the U.S. shutdown has frayed their nerves. In the first 15 trading minutes, Japan's Nikkei rose as high as 4.3%, to an all-time high of 47,734.04, after Takaichi defeated the more moderate Shinjiro in the Liberal Democratic Party leadership vote, on Saturday. This stoked expectations for fiscal stimulus. The yen fell 1.6%, to just above 150 dollars per yen. Short-term Japanese government bond yields also dropped to a new two-week low. Traders reduced their bets about when the Bank of Japan would resume raising interest rates. The implied odds that the BOJ will raise interest rates by the end of this year have fallen to 41%, down from 68% last Friday. Takaichi criticised the BOJ for raising rates a year ago as "stupid". Her recent remarks have been more restrained. She has only said that central bank policies should align with government. In a recent research report, Morgan Stanley MUFG Securities economists stated that "we believe that concerns among investors that the new administration may pursue extreme fiscal expansion" or exert political pressure against the BOJ have been overblown." They noted that Takaichi’s stance appears "closely aligned" to BOJ Governor KazuoUeda’s "cautious" approach to policy normalization. The majority of other major stock markets in the region, such as mainland China, South Korea, and Taiwan, were closed on holidays. Hong Kong's Hang Seng fell 0.3% ahead of Tuesday's holiday. Australia's benchmark index fell 0.1% despite the fact that trading was thinned out by holidays across several states, including New South Wales. U.S. S&P futures were 0.2% higher after the cash index reached a new record high on Saturday. The U.S. Dollar gained ground against European currencies. It used its momentum against yen as a way to recover from last week's 0.5% drop against a basket major counterparts. The euro fell 0.25% at $1.1714 and the pound sterling dropped 0.23% at $1.34385. The last time gold changed hands was around $3904 after the price had risen as much as 0.9% to a record-breaking $3,919.59. Bitcoin was trading at around $123,590 after its recent jump from $125,653.32 to Sunday. Geoffrey Kendrick is the head of Standard Chartered Bank's digital assets research. This year, bitcoin traded with "U.S. "This year, bitcoin has traded with 'U.S. Kendrick said, "I think bitcoin will continue to rise during the shutdown" and that it will reach $135,000 soon. The oil prices increased after OPEC+ announced that it would increase its production by 137,000 barrels a day (bpd), the same modest increase from October. This announcement came amid persistent fears of a looming glut in supply. Sources said that Russia wanted to increase output by 137,000 bpd in order to avoid price pressure, but Saudi Arabia preferred to double, triple, or even quadruple this figure to gain market share faster. Brent crude futures increased 1.3% to $65.39 a barrel, while U.S. West Texas intermediate crude rose by 1.4% to $61.71.
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VHM, Australia's rare earths company, receives US interest up to 200 million dollars for its project
VHM Australia said Monday that it had received a letter from the U.S. Export-Import Bank for funding of up to $200,000,000 to support its Goschen rare-earths and mineral sands development project. Shares of the rare-earths miner had risen 6.1% earlier in the day to A$0.26, the highest level since September 25. EXIM's letter of interest, the official export credit agency for the U.S., proposes a maximum 12-year repayment period, as Western economies seek to diversify their rare earths supply chains away from the top producer China. U.S. officials have discussed taking an interest in Critical Metals Corp. This would give Washington a vested interest in the Greenland's largest rare earths projects, according to a report on Saturday. The source was people familiar with the issue. VHM reported that EXIM had identified the Goschen Project as a candidate for its Supply Chain Resiliency Initiative. The SCRI aims to support project which strengthens secure and diverse supply chains in U.S. industry. Andrew King, CEO of VHM, said that the company is "well positioned" to progress the Goschen project and to become a global solution to current critical issues in the minerals supply chain. The Goschen Project in Victoria, Australia, is classified as Tier 1 integrated rare-earth and mineral sands projects. (Reporting and editing by Sumana Aich and Rashmi Nandy in Bengaluru)
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Oil prices rise 1% following lower-than expected OPEC+ production increase
Early Monday, oil prices were up about 1% after OPEC+ reported a modester monthly production increase than expected. This helped to calm some fears about the addition of supply. Brent crude futures were up 63 cents or 1% to $65.16 per barrel at 2310 GMT. U.S. West Texas intermediate crude was $61.46 a barrel, an increase of 58 cents or 1%. The price increase is primarily due to OPEC+’s decision to raise production less than expected next month, as the group aimed at cushioning the recent slump on oil markets," said Tina Teng, an independent analyst. She added, "However the crude prices are likely to remain low due to a gloomy economic outlook around the world." The Organization of Petroleum Exporting Countries, Russia, and some smaller producers announced on Sunday that they would increase production by 137,000 barrels a day (bpd) from November, the same modest increase monthly as in October. This is despite persistent concerns about a looming glut of supply. Sources said that Russia wanted to increase output by 137,000 bpd in order to avoid price pressure, but Saudi Arabia preferred to double, triple, or even quadruple this figure to gain market share faster. ANZ analysts wrote in a Monday note that "OPEC+’s decision to raise production by another 137,000 bpd could be manageable given the rising disruptions in supply due to the tightening of sanctions by Europe and America against Russia." Analysts added that "Ukraine continued to intensify their attacks on Russian energy installations, targeting the Kirishi Refinery, one the largest Russian refineries with a processing capacity of over 20 million tonnes per year." Last week, the Group of Seven nations finance ministers announced that they would increase pressure on Russia to stop Moscow from generating revenue due to its invasion of Ukraine. They said this by targeting those countries who continue to purchase Russian oil or facilitate circumvention of sanctions. (Reporting and editing by Richard Chang, Jamie Freed, and Emily Chow)
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Sabesp, a Brazilian company, announces the acquisition of EMAE by Sabesp for $212 Million
Sabesp, a Brazilian water utility, announced on Sunday that it had agreed to purchase a 70.1% share in Empresa Metropolitana de Agua e Energia EMAE across multiple classes of shares for 1.13 billion reais (212 million dollars). EMAE is a Brazilian company that owns and operates a hydro-electric power generation system. This system is located in Sao Paulo, the Baixada Santista coast area, and the MedioTiete region. The acquisition of Sabesp, which combines water security and energy generation, strengthens synergies between the company's businesses, and creates a more robust platform to tackle climate challenges and the rising demand for services essential, according to a filing with the Securities and Exchange Commission. Two separate agreements will be used to acquire a controlling stake. The first agreement, with Vortx representing the bondholders of Phoenix Agua e Energia S.A. involves the purchase by EMAE of 74.9% its common shares. Sabesp will acquire 66.8% EMAE preferred shares, held by the power company Eletrobras, in a second transaction that is conditional upon the first. Sabesp stated in its filing that the transactions were separately negotiated and subject to regulatory and antitrust approval. ($1 = 5.3348 reais) (Reporting by Lisandra Paraguassu; writing by Marcela Ayres; Editing by Cynthia Osterman)
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Heavy rains in Nepal kill 47 people and block roads
Officials said that heavy rains in Nepal have caused landslides, flash floods, and washed away bridges, killing 47 people. Kalidas Dhauboji is a spokesperson of the Armed Police Force. He said that 35 people died in landslides separate in the Ilam District in the eastern bordering India. He added that nine people are missing, having been washed out by floods. Three others have died in lightning strikes in other parts of Nepal. Shanti Mahat is a spokesperson for Nepal's National Disaster Risk Reduction and Management Authority. She said that rescue efforts are ongoing to find missing people. Local media reported that landslides caused by heavy rains in Darjeeling, a hill region in eastern India, killed at least seven people. "Seven bodies have been recovered already from the debris." Two more people are known to us. We are working to recover the bodies of these two people as well," Abhishek, a Darjeeling District Police official, said in a Sunday post on social media platform X by Indian news agency ANI. Authorities reported that several highways were blocked by landslides or washed out by floods. This left hundreds of passengers stranded. Rinji Sherpa is a spokesperson at Kathmandu Airport, Nepal's largest international gateway. "Domestic flight are mostly disrupted, but international flights operate normally," he said. A district official reported that the Koshi River in southeastern Nepal was flowing at a level above danger. The river, which is responsible for deadly floods almost every year in eastern Indian state Bihar, flows over the danger threshold. Dharmendra Kumar Mihsra, district Governor of Sunsari District, said that all 56 sluice gate of the Koshi Barrage were opened to drain water, compared to about 10-12 during a normal condition. He added that the authorities had prohibited vehicular traffic on this bridge. Kathmandu's hilly terrain has seen several rivers flood roads and many homes, separating the temple-studded city from the rest the country. Every year, hundreds of people are killed in Nepal's mostly mountainous areas by landslides or flash floods. These events occur during the monsoon period which starts around mid-June. Officials said that rains would likely continue to fall on the Himalayan nation through Monday. Authorities said they are taking "all precautions and care" to assist those affected by the tragedy. (Reporting from Gopal Sharma, Kathmandu. Additional reporting by Jayshree Upadhyay, Mumbai. Editing by Lincoln Feast & Jamie Freed).
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Heavy rains in Nepal kill 22 people, cause road blockages
Officials said that heavy rains in Nepal caused landslides, flash floods, and bridges to be washed away. At least 22 people died in the past 36 hours. Binod Ghimire, the police spokesperson, said that 18 people died in separate landslides on the border of India in the Ilam District. He said that three people died from lightning strikes in southern Nepal and another person was killed by floods in Udayapur District, which is in eastern Nepal. Authorities reported that 11 people have been missing and washed out by floods since Saturday. Shanti Mahat is a spokesperson for the National Disaster Risk Reduction and Management Authority. Authorities reported that several highways were blocked by landslides, and washed out by floods. This left hundreds of passengers stranded. Rinji Sherpa is a spokesperson at Kathmandu Airport. He said that domestic flights were largely affected, but international flights continued to operate normally. A district official reported that the Koshi River in southeastern Nepal was flowing at a level above danger. The river, which is responsible for deadly floods almost every year in eastern Indian state Bihar, flows over the danger threshold. Dharmendra Mishra said that water flow in the Koshi River was more than twice normal. Mishra stated that all 56 sluice gate of the Koshi Barrage were opened to drain water, compared to about 10 to 12. During a normal situation. He added that authorities "are preparing to ban heavy vehicle from its bridge." Kathmandu's hilly terrain has seen several rivers flood roads and many homes, cutting off the capital from the rest the country. Every year, hundreds of people are killed in Nepal's mostly mountainous areas by landslides or flash floods. These events occur during the monsoon period which starts normally in mid-June. Officials from the weather service say that rains will likely lash the Himalayan country until Monday. Authorities say they're taking "maximum precautions and care" to assist those affected by this disaster. (Reporting and editing by Lincoln Feast; Gopal Sharma).
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PMI: Saudi Arabia's private non-oil sector has grown the most in six months.
A survey revealed that the non-oil sector of Saudi Arabia expanded at its fastest rate in six months during September. This was due to a surge in orders and an increase in output. The Riyad Bank Saudi Arabia Purchasing Managers' Index climbed from 56.4 to 57.8 (seasonally adjusted) in September, the highest improvement in operating conditions seen since March. Firms saw an increase in new orders, as they benefited from a strong market, new customers, and competitive pricing. For the second month in a row, new orders from overseas clients increased. The new order subindex jumped to 63.3 from 60.1 in August due to a robust domestic and international demand. The output growth rate has increased at the fastest pace since February. Naif Al Ghaith is the chief economist at Riyad Bank. He said, "Overall, the September survey shows a resilient, private sector which is navigating through cost pressures and benefiting from a firm demand, as well as steady hiring." According to a statement released before the budget, Saudi Arabia's government forecasts a real GDP growth rate of 4.4% by 2025. The non-oil sectors are expected to grow at 5%. This growth is supported by an increase in domestic demand and better employment rates. The employment growth in September was driven by a higher demand, and the need to efficiently manage workloads. The hiring rate was steady, but the subindex for this measure showed a slight decline from the previous month. Input price inflation has dropped to its lowest level in six months, mainly due to higher wages and costs of suppliers. The optimism for the future improved as firms became more confident in increased demand and large-scale infrastructure project. (Reporting and Editing by Hugh Lawson).
Russell: China's response to Trump tariffs is likely to change coking coal prices and flows.
The impact of China's retaliatory duties on U.S. energy exports will be felt most strongly in the seaborne coal market.
Beijing imposed an import tariff of 15% on U.S. coal, liquefied gas (LNG), and crude oil on 4 February after U.S. president Donald Trump imposed an additional 10% tax on all imports.
Tariffs could kill energy trade between China and the United States. The United States is the biggest exporter of LNG, but ranks fourth for coal and crude oil.
The U.S. shares of China's crude oil and LNG imports are small at around 2% each, so the global markets should be able adjust quickly and easily.
The story is different for metallurgical coking coal, which is also called coking coal. It's the primary fuel used to produce steel.
According to Kpler commodity analysts, China's total seaborne coking coal imports in 2024 were 43.02 millions metric tons, with the United States providing 5.02 million, or an 11.7% share.
The United States is the fourth largest supplier of seaborne coal to China. This was behind Australia, with 15.91 millions tons, Russia, with 11.68 millions, and Canada, with 7.79.
The steelmakers in China will need to find alternatives if the new tariffs make U.S. coal uncompetitive.
The U.S. exporters of coking coal could, of course, choose to reduce the price to remain in the China market. However, they would be more inclined to try to sell their cargoes to other buyers, including India, Japan, and South Korea, who are the top importers.
What is the most likely place that China will be able source coking coal in order to replace U.S. supply, assuming its demand for 2025 stays constant from 2024?
The coal could be delivered to the wrong places by overland trucks and trains, as seaborne coal is largely used for coastal steel plants.
It is also doubtful if Russia can increase its production and rail capacity enough to replace U.S. coal.
The only other options are Australia and Canada, both of which have the capacity to meet China's demands.
This may cost more, however, because Chinese steel producers may be forced to offer higher prices to Australian and Canadian miner to divert their supply from other countries.
AUSTRALIA PRECEEDENT
China's informal ban on Australian coal mid-2020 resulted almost in a complete cessation of imports, but prices for seaborne grades rose.
China was forced to pay an additional premium for coal from countries such as Indonesia, the United States and Canada.
China will have to compete with Indian buyers if it wants to replace U.S. coal with Australian and Canadian cargoes.
According to Kpler, India will be the largest coking coal importer in the world in 2024. It is expected to take in 67,6 million tons.
Australia was India's largest supplier, with 34,88 million tons, just over half of the total. Russia came in second with 14,74 million, and the United States was third with 8,4 million.
It is logical that China would want to stop buying coking coal from the United States by increasing its purchases from Australia. India, on the other hand, should buy less from Australia and take more from America.
It is possible, but it will come with a premium price, at least at first.
The price of seaborne coking coal has been falling for the past 16 months. Australian benchmark contracts traded in Singapore went from $363 per ton at mid-October to $188 by February 14, which is a 48.2% drop.
Argus, a commodity reporting agency, assessed U.S. low volatile coking coal in east coast ports at $187.50 per ton on 13 February. This was the same as the Australian benchmark.
It's possible that Australian coking coal prices will be higher than their U.S. counterparts if Chinese buyers switch to buying more Australian or Canadian coking. This is especially true if U.S. producers are scrambling to find alternative buyers for cargoes destined for China.
These are the views of the columnist, an author for.
(source: Reuters)