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Gold drops over 1% after U.S. data on inflation boosts Fed rate hike bets
Gold prices dropped by over 1% after?robust U.S. data on inflation and rising oil costs increased bets that the Federal Reserve will raise rates next week. Spot gold fell by 1.2%, to $4349.32 an ounce, at 9:24 am EDT (1324 GMT), whereas U.S. Gold Futures dropped 1.6%, to $4391.30. The data from the producer price index "sort of tells [us] that there has been an increase in inflation underlying in?the?U.S. The rising cost of energy is a major factor in the economy. U.S. Producer Prices increased in August in line with expectations, despite a rise in the cost of energy. According to CME FedWatch Tool, traders now price a 70% chance of a rate increase next week. This is up from 62% prior to the data. The majority of economists surveyed by the Fed expect that the Fed will hold the interest rates at their September 15-16 meeting, and throughout the remainder of the year. Gold prices were further pressured by the U.S. dollar's rise, which made greenback-priced gold more expensive in other currencies. Rodda said that bonds must reflect the higher inflationary pressures caused by higher oil prices, which are causing gold prices to drop. Gold is typically pressured by rising bond yields, which increase the opportunity costs of holding the nonyielding asset. The benchmark Brent crude oil price jumped by 4% to $105 per barrel on Thursday, following the largest spike in attacks?on shipping since U.S. - Iran war began. This prompted supply disruption fears. The European Central Bank raised interest rates for the second time this year on Thursday, in an effort to curb a rise in inflation caused by war-related energy costs. Silver spot fell by 4.2%, to $64.47 an ounce. Platinum dropped by 4.9%, to $1802.48. Palladium was down 4.3%, to $1295.23.
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Chad, a country in drought, bans certain crop exports to prevent a food crisis
Chad has lifted import duties on some grains and banned the export of other agricultural products in order to prevent food shortages following intense heat and drought that damaged harvests throughout the country. In a report released this week, the United Nations' Food and Agriculture Organization stated that Central Africa experienced multiple dry spells from July to mid-August. This raised concerns over crop yields and development. Finance Minister Tahir?Nguilin announced in a late-Wednesday decree that wheat, corn and millet, along with livestock feed and agricultural machinery, will be exempted from import duties and taxes. Separately, on Wednesday, Commerce Minister Mathieu Guilo Fanga signed a decree that banned the export of millet and other grains, including corn, rice and wheat, as well as sorghum and cotton seeds. Keda?Ballah is Chad's Minister of Agriculture Production and Industrialization. He said that the central, eastern, and northern regions were the worst affected by the drought. Ballah stated that the government was taking steps to help farmers grow crops in irrigated fields during off-season. He said, "This is the best way to stop famines in certain areas. We are well aware of this." World Food Programme stated earlier this year that over 3 million people will face acute food security during the lean period from June to August. No Farmer Left Behind Mahamat Moussa, a farmer from the west-central province Chari-Baguirmi told us that a drought had destroyed 12 hectares (acres) of his corn crops. He claimed that the government had failed to alert farmers to the heatwave and left them unprepared for extreme weather. He said, "The?food shortage on the markets is a major concern for authorities. We are going to starve, because no farmer in our area has been spared." Djibrilla abba bello, a nomad?herder from the Mayo-Kebbi Ouest area, reported that streams and ponds, which normally?supply livestock with water at this time of year, had dried up. "Our animals are losing a lot of weight, they're producing less milk, and have trouble walking long distances... "Our animals are losing weight, producing less milk and having trouble?walking long distances...
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The share of Chinese copper in LME stock rose to 44% by August
Data from the London Metal Exchange showed that, in August, 44% of all copper stocks were Chinese origin, up from 42% one month earlier. Overall inventories also increased. Total copper stocks in LME warehouses 0#MCUSTX-LOC> rose to 111.17 metric tons by the end August, up from 101.425 tons in July. Investors rushed to cover their bearish positions, pushing prompt copper prices sharply backwards, which attracted some inflows. The amount of 'Chinese Copper' available has increased from 49,400 to 66,350?tons. In August, 95% of the LME's aluminium was made up by aluminium from Russia, which is unchanged from last month, despite a small decline. The amount of Russian metal available fell by 2,750 tonnes to 230,050. The only other origin available, Indian, remained unchanged at 12,450 tons. Many traders shun Russian aluminum - even though metal produced prior to mid-April, 2024 is still eligible for trading. To comply with Western sanctions, aluminium produced in?Russia before that date will be?banned from the LME warehouse system. At the end of December, the share of?nickel of Chinese origin remained stable at 70%.
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BHP is facing a class action lawsuit funded by an Australian union after labour disputes escalate
A mining union in Australia is funding a BHP class action that could affect up to 7,000 employees. This is the latest labour dispute involving the world's largest listed miner, which also faces its first major strike for a quarter-century. The Mining and Energy Union, (MEU), has announced a class action to compensate mineworkers who were illegally forced to work during the Christmas and Boxing Day holidays in 2019 at the Daunia Mine in central Queensland. In a press release, the union stated that if the suit is successful it could result in "millions of dollars in compensation". The case will be heard on November 9, 2026. BHP Operations Services had been found to have violated the National Employment Standard in its rostering workers during that period by a federal court. A court in November 2025 ordered the mining giant, to compensate 85 Queensland workers who were employed by its labour-hire division after finding that they had been illegally forced to work Christmas Day and Boxing Day 2019 without having a reasonable right of refusal. MEU General President Grahame Kelly stated that the union could pursue "further collective actions" on behalf of groups of mineworkers whose work was unlawfully forced to be done on public holidays. The miner has also been engaged in "protracted wage negotiations" with unions in Port Hedland where 150 workers walked off the job in what was 'the first major industrial action in over two decades. The talks are still unresolved. Hersh Oberoi is the global research director of Balfour Capital. He said that "the particular case is not what's most important. It's the pattern." A series of labour disputes is increasing pressure on BHP’s employment model, and strengthening unions’ bargaining positions. "In terms of compliance, the solution?is administrative and not expensive." The cumulative impact of labour disputes on BHP and its relationship with unions is the greater challenge. BHP didn't immediately respond to an inquiry for comment.
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Health ministry: Indonesian wildfires double respiratory infections in a single week
Data from Indonesia's Health Ministry showed that respiratory infections due to hazardous?wildfire air pollution have doubled in a little over a week. The Indonesian archipelago has been hit by fires that have ravaged vast stretches of peatland and forest. This has caused hazardous emissions, especially in the provinces of Sumatra, and Borneo. The wildfire season this year is the worst in 11 years, as "super El Nino" weather conditions cause temperatures to rise and droughts to be punishing. The country is responsible for one-third of global fire emissions. According to statistics presented at a press briefing by Widyawati, spokesperson for the health ministry, 113,336 people were suffering from respiratory diseases related to wildfires as of September 9. This is up from 50.891 in September 1. Widyawati (who goes by one name) said that more than 12 million people were exposed to the haze from fires in seven provinces. She said that nearly a million masks, hundreds of oxygen concentrator units, and thousands medical workers were deployed in the affected areas to help residents deal with pollution. The process of adding medical personnel and supplying various supplies continues. We will continue monitoring which areas need more healthcare workers, and dispatch them to those areas. Singapore and Malaysia also have unhealthy air quality due to?transboundary haze. Berton 'Panjaitan is the spokesperson for Indonesia’s disaster mitigation agency. He said that Japan sent three CH-47 Chinooks to help Indonesia fight fires. They began trial flights on Friday. He said that the helicopters will help with Indonesian military water bombing operations in West Kalimantan, Borneo. These operations are expected to begin either on Friday or on Saturday. Malaysia, which shares land borders with Indonesia on Borneo?has offered to help Indonesia with its aerial firefighting capability, according to a letter sent by the country's Environment Minister to his Indonesian counterpart. Panjaitan stated that Jakarta is conducting inter-agency consultation to discuss Malaysia's offer. According to government statistics, between January and July of this year, around 202,000 hectares or almost 500,000 acres were burned. Environmental group YKAN estimates that 600,000 hectares of land were also damaged by fires in August.
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Gold drops as dollar yields increase ahead of inflation data
Gold lost ground on Thursday as it erased earlier gains. This was a result of a stronger dollar and higher bond yields. Investors were also awaiting key U.S. data on inflation to get clues about the Federal Reserve’s interest rate path. Gold futures in the U.S. fell 0.7%, to $4,427.80 per ounce, while spot gold dropped 0.4%, to $4385.40 an ounce, by 1125 GMT. I think that part of the decline in metals prices is due to the U.S. Dollar coming back ahead of inflation data. Fawad Rasaqzada is a Forex.com market analyst. He said that the bond yields are expected to rise even further in the U.S. The U.S. Dollar Index rose, making greenback priced bullion costlier for overseas buyers. The markets are waiting for the U.S. producer prices?index due at 1230 GMT. Consumer price inflation will be released on Friday. The latest energy-induced inflation pressure has pushed global bond yields up. Benchmark 10-year Treasury yields have reached their highest level since 2023, as the U.S. Treasury's buyback program of longer-dated securities also disappointed. "Concerns are growing about the bond markets in the U.S. as long-dated yields continue to rise, despite the Treasury Buyback Program .... which is a mere 'drop in the ocean.'" Razaqzada said. Gold is typically under pressure from rising bond yields, as they increase the cost of holding a non-yielding investment. Most?economists surveyed by the Fed expect interest rates to remain unchanged at the September 15-16 meeting and for the remainder of the year. CME FedWatch Tool shows that traders still price in a 62% probability of a rate increase next week. On the geopolitical scene,?U.S. Donald Trump has said that he expects the war against Iran to end following the midterm elections in November. He also?threatened to attack again a site associated with Iran's nuclear program. Brent crude prices hovered around $100 per barrel. Silver spot fell by 2.2%, to $65.75 an ounce. Platinum dropped 3%, to $1.838.21. Palladium was down 2.3%, to $1.322.00.
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Reports of White House hesitation over tariff plans cause copper to fall
The White House is still deciding on refined copper tariffs, and officials are assessing the concerns that higher prices could increase manufacturing costs. The price of three-month copper at the London Metal Exchange dropped 3.1% by 1039 GMT to $14,312 per metric ton after reaching a session high of $14.875 earlier. COMEX copper futures for October fell 4.2%, to $6.5355 a lb or $14,408 per ton. This reduced the premium over LME prices. Before the mid-term election in November, President Donald Trump's administration is under pressure to show that its policies are reducing costs for American businesses and consumers. Ole Hansen is the head of commodity strategy for Saxo Bank. He said that "that update sent the cat amongst pigeons." The price of copper, which is widely used in construction and power, increased by 16% in the United States this year, as more metal was imported into U.S. stores ahead of possible tariffs on refined imports. This has sparked concerns about availability in regions that traditionally consume copper. After months of inflows, the COMEX copper stocks have reached a new record of 696 259 tons. Hansen said that the price levels at present could be determined by whether inventories become stranded or if they return to global markets if tariffs are not introduced. The premium for the LME Cash Contract over the benchmark?three-month contract was higher after the report was published Thursday For the first time since late July, sank below a discount. Last year, the discount was $13.5 per ton. This indicates that concerns over a "shortage" of supplies in the near future have decreased. Other?LME Metals: Aluminium fell 1.5% to $3,308 per ton. Zinc fell 2.2% to $3.962.50. Lead eased by 0.4% to $1.907. Tin lost 0.2% at $54,845. Nickel was down 0.9% to $16,740.
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Singapore's oil product inventory reaches two-month highs
Singapore, Asia's main fuel trading hub, has seen its oil product stockpiles rise to a two-month high, according to government data released Thursday. The increase in stocks of light and middle distillates was also noted. Enterprise Singapore reported that the combined onshore oil products inventories stood at 40.47 millions barrels for the week ending September 9. This compares to 39.04million barrels one week earlier. Multiple?trade sources this week said that September exports to Asia are expected to remain robust for diesel and jet-fuel, but may slow down for gasoline because of margin concerns. Diesel was the major concern in some Western regions. STOCKS GO UP IN MIDDLE AND LIGHT DISTILLATES Middle distillates inventories rose to 8 million barrels again, following a drop in net exports of jet fuel and Kerosene. Net exports of jet fuel and kerosene fell by 11% compared to a week earlier, while imports from China continued for the second consecutive week. The net exports of diesel and gasoil rose more than 30 times compared to a week ago, while imports dropped by nearly 80%. Exports mainly go to Malaysia and China. The stocks of light distillates, which includes naphtha, gasoline and other products, reached a new high for a month at 11,87 million barrels. The period saw a total of 185,000 metric tonnes (approximately 1,6 million barrels) in gasoline imports, while the exports were around 390,000 metric tons. Malaysia led the way with a volume of about 100,000 tons. Indonesia was close behind at 71,000 tons. South Korea led the way with nearly 99,000 tonnes of gasoline inflows, followed by China with?about 52,000 tonnes. About 206,000 tons of naphtha were imported (roughly 1.8 millions barrels). The largest contributor was Russia, with nearly 89,000 tonnes. India came in second at 36,000 tons. Singapore exported approximately 34,000 tons (all shipments were to China) of naphtha. RESIDUAL FUELS STOCKS AT A TWO WEEK LOW The residual fuel oil inventories fell to a 2-week low. Imports were more than halved. The data shows that stockpiles are down 0.5% from the previous week, at 20,36 million barrels (3.21 millions tons). Imports of fuel oils dropped by over 50%, to 451,000?tons. India was the largest supplier for the week. Refiners have been exporting supplies via tenders. Brazil and Mexico were also important suppliers as traders shifted arbitrage cargoes. Exports of fuel oil rose 4.5% in the same period, to 155,000 tonnes. Bangladesh and China were major outlets.
Stocks rally in relief after Trump suspends tariffs
On Thursday, global stocks rose, the dollar recovered its footing and the manic bond saleoff stabilized after U.S. president Donald Trump announced he would temporarily reduce the heavy duties he just imposed on several countries.
After a market crash that wiped trillions from global stocks, and sent U.S. Treasury Bonds and the dollar tumbling, Trump announced on Wednesday a 90-day suspension of many of his new duties in an unexpected reversal.
Overnight, Wall Street's "Magnificent 7" stocks soared again. Their market value grew by more than $1.5 trillion. S&P 500 Index and Nasdaq Composite Index posted their largest daily percentage gains for more than a decade.
The U.S. Futures market turned lower Thursday with Nasdaq futures dropping 0.7% and S&P500 futures down by 0.3%.
In the previous session, the dollar recorded its biggest one-day gain against the yen and the Swiss franc since five years. The dollar lost some of its gains on Thursday in Asia, reflecting market uncertainty about the longer-term outlook as well as the Sino/U.S. Trade War showing no signs of abating.
Khoon Goh is the head of Asia Research at ANZ. He said: "I believe the initial move was simply massive short covering, and this gave the world a little breathing space. Except for China. Because markets started to price the worst-case scenarios."
The markets are likely to figure out what to do next now that the dust is settled.
Investors in Asia were still elated by the temporary tariff relief. Japan's Nikkei soared by 8% while European futures jumped.
The DAX and EUROSTOXX50 futures each rose by about 8%. FTSE futures jumped 5.5%.
Trump's decision to reverse the tariffs on specific countries is not final. The White House announced that a 10% blanket duty will continue to be applied to almost all U.S. imported goods. This announcement does not seem to affect existing duties on steel, aluminium and autos.
He said he would also increase the tariffs on Chinese imports from 104% to 125%, which came into effect Wednesday.
China raised the additional duties on American goods to 84% on Wednesday and imposed restrictions against 18 U.S. firms, mostly in defense-related industries.
The Chinese equity market opened strong on Thursday with the CSI300 blue chip index up 1.6%. Hong Kong's Hang Seng Index rose 3.3%.
Wong Kok Hoong is the head of Maybank's equity sales trading.
The China + 1 route is still intact. "As the tariffs on the rest of world are 10% for 90 days and companies/businesses will have the time/alternatives necessary to adjust their supply chain routes."
The yuan's move painted a very different picture. It fell to its lowest level since December 2007, at 7,3518 per dollar.
The People's Bank of China set the midpoint, or the rate at which the yuan can trade within a 2% range, prior to the market opening. This is the lowest since September 11, 2023.
SELL BONDS
The steep drop in bond prices this week showed signs of slowing down on Thursday.
The benchmark 10-year Treasury rate dropped to 4.2889% after reaching a high of 4.515% in the previous session. It also rose by 13 basis points.
Fears of fragility on the world's largest bond market were reignited by a violent U.S. Treasury sale in previous sessions. The "sprint for cash" in COVID era was reminiscent.
Lawrence Gillum is the chief fixed income analyst at LPL Financial. He said that Treasury yields are continuing to rise because of "sticky inflation, a patient Federal Reserve, potential foreign buyer boycotts and hedge fund deleveraging."
The minutes of the Fed's March meeting were released on Wednesday. They showed that policymakers are not going to rush to cut interest rates because they believe higher tariffs will boost inflation. However, they also worry about Trump's trade policies affecting economic growth.
The markets are now pricing just 80 basis points in rate reductions by December. This is down from over 100 basis points earlier in the week.
Investors worried about the rising Sino-U.S. tensions caused oil prices to fall elsewhere.
Spot gold continued to climb, and it was up by 0.5% last at $3.097.52 per ounce.
(source: Reuters)