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Gold reaches two-week highs on increased US rate cuts bets
Gold reached a two-week high Wednesday after U.S. data reinforced expectations of a Federal Reserve interest rate reduction in December, and weighed down on the dollar. As of 0615 GMT spot gold was up 0.7% at $4,156.89 an ounce. This is its highest level since November 14. U.S. Gold Futures for December Delivery were up 0.4% to $4,154.10 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that expectations are shifting towards a rate cut in December. "A chorus of dovish comments from Fed officials has strengthened the case," he added. Data released Tuesday showed that U.S. Retail Sales increased less than anticipated in September. In the 12-month period ending in September, the Producer Price Index rose 2.7%, after increasing by the same margin last August. Recent dovish remarks by Fed policymakers preceded the release of these data. Dollar hits one-week-low as investors bet that Kevin Hassett may lead policy in a more dovish way, making greenback priced bullion cheaper for other currency holders. The benchmark 10-year Treasury rates held close to the one-month lows reached in the previous session. Scott Bessent, U.S. Treasury secretary, said that the Fed's interest rate management system is in trouble and must be simplified. According to CME FedWatch data, the markets are pricing an 85% probability of a Fed rate reduction in December compared to only 50% last week. In low-interest rate environments, gold, which is a non-yielding investment, performs well. The U.S. Weekly Jobless Claims Report is due to be released later on Wednesday. In October, net gold imports from Hong Kong to China, the top consumer, fell by 64% compared to September. (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich and Mrigank Dhaniwala) (Reporting and editing by Rashmi Dhaniwala and Mrigank Aich in Bengaluru)
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MORNING BID EUROPE-Reeves takes centre stage
Gregor Stuart Hunter gives us a look at what the markets will be like in Europe and around the world. It is make-or-break for Britain's Finance Minister Rachel Reeves, who will unveil her budget later today. The budget could contain tens or hundreds of millions of pounds worth of new taxes. In Asian trading, the pound is up 0.2% to $1.3193, a rise of a fifth day in a row ahead of her speech at 1230 GMT. Sources say that after the meeting between the new Japanese Prime Minister Sanae Takayichi and BOJ governor Kazuo Ueda last week, the Bank of Japan has begun preparing the markets for an interest rate increase as early as next month. This shifts the central bank to a more hawkish stance. The Yomiuri reported that the high approval ratings of Takaichi are leading Japanese opposition parties towards preparing for snap elections. The New Zealand dollar jumped 1.2% as the Reserve Bank of New Zealand reduced interest rates by 25 basis points, to 2.25%. However, it removed its dovish advice, signaling an end to central bank's ease cycle. The Australian dollar also jumped by 0.5%, after an inflation report that was hotter than expected reinforced the belief that the Reserve Bank of Australia has stopped cutting rates for the time being. After Ukrainian President Volodymyr Zelenskiy indicated he was willing to advance a U.S. peace plan, opening the door for an easing of sanctions against Russian energy, and additional supplies on Tuesday, oil prices tumbled to a 5-week low. Brent crude futures rose 0.4% to $62.72 as U.S. president Donald Trump backtracked on a deadline of Thursday for Ukraine to reach an agreement. Trump also dismissed a Bloomberg News story that U.S. negotiator Steve Witkoff had instructed the Russians how to approach him about the topic. The equity markets were not affected by the confusion and volatility on Wall Street, as they enjoyed a wide rebound after the S&P 500 climbed for a third day in a row. The Nikkei rose 2% Wednesday on the back of optimism over corporate earnings. Hong Kong and China, however, lagged behind. The Hang Seng Index rose 0.5%, despite earnings from AI leader Alibaba beating estimates. However, shares fell 1.1%, as the ecommerce company disappointed investors with its Q4 outlook and announced it would reduce spending on its instant-commerce business. This led to a 6% increase for Meituan, a rival. The following are key developments that may influence the markets on Wednesday. UK: Autumn budget Debt auctions: Germany: 10-year government debt
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Gold reaches near 2-week highs on US rate-cut bets
Gold reached a two-week high Wednesday after U.S. data reinforced expectations for a Federal Reserve rate cut in December, and the dollar was weighed down. As of 0437 GMT spot gold was up 0.7% at $4,160.12 an ounce. This is its highest level since November 14. U.S. Gold Futures for December Delivery were up 0.4% to $4,158.00 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that expectations are shifting towards a rate cut in December. "A chorus of dovish comments from Fed officials has strengthened the case," he added. Data released Tuesday showed that U.S. Retail Sales increased less than anticipated in September. In the 12-month period ending in September, the Producer Price Index rose 2.7%, after increasing by the same margin last August. Recent dovish remarks by Fed policymakers preceded the release of these data. Dollar hits one-week-low as investors bet that Kevin Hassett may lead policy in a dovish direction. This would make greenback-priced gold less expensive for holders of other currencies. The benchmark 10-year Treasury rates held close to the one-month lows reached in the previous session. Scott Bessent, U.S. Treasury secretary, said that the Fed's interest rate management system is in trouble and must be simplified. According to CME FedWatch data, the markets are pricing an 85% probability of a Fed rate reduction in December, up from 50% last week. In low-interest rate environments, gold, which is a non-yielding investment, performs well. The U.S. Weekly Jobless Claims Report is due to be released later on Wednesday. In October, net gold imports from Hong Kong to China, the top consumer, fell by 64% compared to September. (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich and Mrigank Dhaniwala) (Reporting and editing by Rashmi aich and Mrigank dhaniwala in Bengaluru)
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Copper prices rise as Fed cuts are fueled by soft US data
Copper prices rose on Wednesday, as soft U.S. economic data raised expectations for a Federal Reserve rate cut in December. Meanwhile, a Chinese senior industry official warned of the halting of smelting and cautioned against ultra-low fees. As of 0258 GMT, the most traded copper contract at the Shanghai Futures Exchange had risen 0.16% to 86,560 Yuan ($12,218.22). The benchmark three-month copper price on the London Metal Exchange rose 0.38% to $10,859.5 per ton. The market received a boost as the September economic data, which was released on Tuesday but delayed because of a government shut down, showed a cooling in retail sales and inflation. This supported a rate cut for December by the Fed. Commerce Department data shows that U.S. retail sale rose by 0.2% in September, but missed the forecast of 0.4%. In a speech delivered on Wednesday at the World Copper Conference Asia 2025 by Vice President Chen Xuesen, the China Nonferrous Metals Industry warned against the negative and zero treatment of copper concentrate. The association was against the free and negative processing. He noted that China had also halted construction of 2 million tons new smelting capacities. Nickel rose by 1.39% and tin increased by 0.15% among other SHFE metals. Aluminium was up by 0.30%. Zinc gained 0.28%. Lead rose 0.25%. Nickel grew 0.12%. Tin increased 0.43%. Wednesday, November 26, DATA/EVENTS 0500 Japan Chain Stores Sales YY Oct. 0500 Japan Leading Indictor Revised Sep. 1330 US Durable Goods Sept. 1330 US Initial Unemployment Clm 22.11.2018 w/e. ($1 = 7.0845 Chinese Yuan Renminbi). (Reporting and Editing by Dylan Duan, Lewis Jackson, Rashmi aich.
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China's demand for iron ore is not changing much as supply increases.
The prices of iron ore futures were not much changed on Wednesday. A modest increase in China demand was offset by a decline in steel production and a rise in global supply. As of 0249 GMT, the most-traded contract for January iron ore on China's Dalian Commodity Exchange was trading 0.06% lower at 796 Yuan ($112.36) per metric ton. The benchmark December Iron Ore at the Singapore Exchange rose 0.28% to $106.1 per ton. The global iron ore production is projected to reach a new record in 2026 of 2,68 billion tons, thanks to the continued expansions in mines in Australia and Brazil. Also, the recently commissioned Simandou Project in West Africa will be able to meet demand, according to a report by consultancy Mysteel. The World Steel Association has reported a lower global steel production for October. It was down 5.9% on an annual basis to 143.3 millions tons. Meanwhile, crude steel output in China, the top producer, fell 12.1%. China's steel production will fall below 1 billion tonnes this year, for the first six-year period. This is in line with government promises to reduce production and balance supply and demand in an industry that has been struggling with overcapacity. Mysteel reported that the prices of Chinese iron ore concentrates produced locally remained unchanged across most production areas last week, despite a decline in demand from domestic steelmakers. Mysteel stated that the strong performance of iron-ore derivatives, and the resilience of the imported ore price supported the market. Galaxy Futures, a Chinese broker, says that the domestic end-use demand for steel has improved in the fourth quarter. Infrastructure demand is driving up apparent steel demand. Coking coal and coke, which are used in the steelmaking process, have both fallen by 3.42% and 3.17 percent, respectively. The benchmarks for steel on the Shanghai Futures Exchange are mixed. The price of rebar and hot-rolled steel fell 0.19%, respectively. However, wire rod and stainless steel rose 0.39% and 0.57%. ($1 = 7.0846 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
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Gold reaches near 2-week highs on US rate-cut bets
Gold reached a two-week high Wednesday after the Federal Reserve cut interest rates in December, bolstering expectations. The dollar also fell. As of 0241 GMT the spot gold price rose by 0.8%, to $4,161.10 an ounce. This is its highest level since November 14. U.S. Gold Futures for December Delivery fell 0.5%, to $4.159.00 per ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said: "Expectations have shifted more in favor of a rate cut for December...the case has been strengthened by the chorus of dovish comments from Fed officials as well as benign economic data that is driving gold up from a yield standpoint." Data released Tuesday showed that U.S. Retail Sales increased less than anticipated in September. In the 12-month period ending in September, the Producer Price Index rose 2.7%, after increasing by the same margin last August. Recent dovish remarks by Fed policymakers preceded the release of these data. Investors bet that the top candidate for the Fed chair could guide policy in a dovish manner, making greenback priced bullion cheaper for other currency holders. The benchmark 10-year Treasury rates held close to the one-month lows reached in the previous session. Scott Bessent, U.S. Treasury secretary, said that the Fed's interest rate management system is in trouble and must be simplified. According to CME FedWatch data, the markets are pricing in a 84% chance that the Fed will cut rates in December. This is up from 50% last week. In low-interest rate environments, gold, which is a non-yielding investment, performs well. The U.S. Weekly Jobless Claims Report is due to be released later on Wednesday. In October, net gold imports from Hong Kong to China, the top consumer, fell by 64% compared to September. (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich) (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich)
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ASIA COPPER WOMAN-China suspends some new copper smelters and warns about negative processing fees
The vice president of China's nonferrous Metals Association said that the country has suspended plans to construct some new copper smelters. He also took steps to reverse the processing fees which have fallen below zero. Due to the rapid expansion of China's metal smelting industry, and the tight supply of copper ore globally, processing fees have fallen to negative levels. This means that smelters pay miners to mine ore rather than miners paying smelters fees to convert ore into metallic form. Capacity gluts have forced some countries to protest and cut production. China's Nonferrous Metals Industry Association Vice President Chen Xuesen announced at the World Copper Conference Asia 2025 that China had stopped working on 2 million metric tonnes of planned smelter capacities. He said that the growth of fixed asset investments in the industry has fallen to 0.4% compared to 23% at the beginning of the year. He said that the overheated investments in the industry are under control. In the future, China's new copper smelting capacities will be strictly limited. China's copper refinement and copper processing won't be pursuing the goal of volume." Chen warned that processing fees for the next year's supply contract should not be zero as negotiations between Chinese smelters, Antofagasta and copper mining giant Antofagasta begin. These talks established a benchmark for Chinese treatment and refinement charges (TC/RCs), also known as processing fees. These are traditional payments made by miners to the smelters. Chen stated that the China Nonferrous Metals Industry Association is against any negative or free processing of copper concentrate. We call on the global industry of copper to confront this unsustainable structural contradiction. The demand for COPPER substitutes is growing. Chen stated that the copper prices in China reached a record high of $11,200 a metric ton last October. While they have since dipped slightly, this elevated level is driving re-use of aluminium throughout the industry. He said that there was a lot of uncertainty about whether the market share and intensity of copper's use will grow over time. He said that copper consumption in electric cars has fallen from 60 to 80 kilograms per car in 2020 to between 50 and 70 kilograms (110-154 pounds) today. Copper in air conditioners has fallen by 67% from 2020 to 4 kg per unit. Reporting by Amy Lv and Lewis Jackson; editing by Himani Sarkar, Sonali Paul
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South Korea's HD Hyundai and Lotte Chemical present plan to restructure their petrochemical business
In separate regulatory filings, HD Hyundai and Lotte Chemical of South Korea have both submitted to the Industry Ministry a plan on restructuring their petrochemical business. The companies stated that the plan will allow Lotte to spin off their business in Daesan, South Korea and merge it into HD Hyundai Chemical in order to reduce the overcapacity in nathpha cracking centres. The plan is part of an industry-wide initiative to alleviate a glut in South Korea’s petrochemicals sector. In August, President Lee Jae Myung administration Push The sector is in a "crisis", and firms are being forced to reduce capacity by up to 25%. They claim that they need to increase efficiency and margins. The goal was set by ten petrochemical companies at the time. They were then asked to develop their own plans. Lotte stated that the merger would increase the efficiency and stability of their operations at the naphtha cracking centres. They did not elaborate. Both companies have said that they will adjust their business portfolios in order to concentrate on core businesses. Lotte's facilities for cracking naphtha in Daesan can produce 1.1 million tonnes, while HD Hyundai has a capacity of 850,000. HD Hyundai Chemical was created in 2014 as a joint venture between HD Hyundai Oilbank, Lotte Chemical and HD Hyundai Oilbank. (Reporting and editing by Ed Davies. Heejin KIM)
Asia stocks surge as Fed rate-cut betting boosts weak US data
The Asian stock market rose on Wednesday as it followed Wall Street's gains, with weaker than expected economic data fueling expectations that the Federal Reserve would cut interest rates during its next policy meeting.
MSCI's broadest Asia-Pacific share index outside Japan rose by 1.1% after U.S. shares ended the previous session mildly up. Japan's Nikkei index gained 1.9% while U.S. futures rose 0.3%. U.S. stock prices recovered lost ground following a recent sell-off. The S&P 500, Nasdaq Composite and Dow Jones all rose for the third day in a row on Tuesday as data revealed that retail sales were lower than expected and consumer sentiment was weaker. These prints boosted expectations that the Fed would ease its policy in the near future and led to speculation that other emerging market Asian central bankers could follow.
Sat Duhra is a portfolio manager with Janus Henderson Investors. He said that once we see more cuts in the U.S. this will be positive for our area. "These markets are waiting for that to happen before we get more aggressive with rate cuts."
FedWatch, a tool of the CME Group, shows that Fed funds futures have an implied probability of 80.7% for a 25 basis-point cut during the next U.S. central banks meeting on December 10. This is compared to odds even a week earlier. The yield on the benchmark 10-year Treasury note rose to 4.0113%, compared with the U.S. closing of 4.002%. This is after briefly falling below the 4% barrier on Tuesday. The last time the sterling was traded, it was 0.2% higher at $1.3188. This extended its advance to a fifth consecutive day before the UK budget is due on Wednesday.
In an effort to maintain confidence in the financial markets, Finance Minister Rachel Reeves is likely to announce new tax hikes. This will be done against an expected decline in Britain's economic outlook. Early European trades saw pan-regional futures up 0.7%. German DAX Futures also rose 0.7%. FTSE Futures increased 0.3%.
Brent crude futures rose 0.4% to $62.72 after U.S. president Donald Trump
Back away
From a deadline of Thursday for Ukraine to accept a U.S. backed peace plan.
Trump also dismissed a Bloomberg News article that claimed U.S. negotiator Steve Witkoff had instructed the Russians how to approach him about the subject.
The price of crude oil had fallen earlier after President Volodymyr Zelenskiy declared that Ukraine was in danger.
Ready to Advance
The U.S.-backed proposal could pave the way for a relaxation of Western sanctions against Moscow's energy industry and an increase in supply on the market.
The push had been a bit too much
Oil Futures
The price of European energy fell to its lowest level in over a year and a half on Tuesday. Three OPEC+ source said that OPEC+ will meet on Sunday, and it is likely to keep output levels the same.
The euro rose 0.1% on the day to $1.1586. The dollar was stable against the yen, at 156.045. However, the Japanese currency fluctuated between gains and losses. Sources said that the Bank of Japan has been preparing the markets for an interest rate hike, possibly as early as next month. This is after the Bank of Japan met with new Prime Minister Sanae Takaichi, and BOJ Governor KazuoUeda last week.
The Japanese opposition parties are ramping up their campaign against Takaichi because of its high approval ratings
The Yomiuri reported Wednesday that preparations were being made for snap elections. Japanese government bonds continued to lose value, with the short-term yields hitting their highest level since June 2008 during the height of the global financial crises.
The dollar index (which tracks the greenback versus a basket currency of other major trading partners) fell 0.2% to 99.686. New Zealand's dollar soared by 1.3%, to $0.5691, after the Reserve Bank of New Zealand reduced benchmark interest rates to 2.25% from 25 basis points and retracted its previous dovish guidance. Australian shares rose 0.8%, and the Australian Dollar strengthened by 0.6% as consumer prices increased faster than expected in October. This reinforced bets on the end of the central bank’s easing cycle.
Bitcoin rose 0.4%, to $87340.98, and spot gold traded up 0.8%, at $4163.58 an ounce. (Reporting and editing by Jacqueline Wong, Lincoln Feast and Gregor Stuart Hunter.
(source: Reuters)