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Gold prices rise on hopes of a US rate cut and government shutdown problems
Gold prices rose on Friday, as the Federal Reserve's expectations of further rate cuts and concerns about the U.S. economy amid the prolonged shutdown of the government boosted demand. As of 0925 GMT, spot gold rose 0.8% to $4,010.72 an ounce. U.S. Gold Futures for December Delivery gained 0.7% per ounce to $4,019.50. Independent analyst Ross Norman said, "The bull market is still going on." The central banks' gold purchases and rate cuts are still on the table. Data showed that the U.S. economy lost jobs in October, mainly due to losses in the retail and government sectors. Cost-cutting and artificial intelligence adoption by companies also led to an increase in announced layoffs. Rate cuts are more likely to occur when the job market is weak. The market participants are now predicting a 67% probability of a Fed rate reduction in December. This is up from 60% just before the report. Last week, the Fed cut rates and Chairman Jerome Powell said it could be the last time the borrowing costs are reduced for the year. Soni Kumari is a commodity analyst with ANZ. She said that the focus now is on macroeconomic numbers, and when the U.S. government shutdown will end. This is helping to boost safe-haven gold demand. The longest government shutdown in U.S. history has been caused by a congressional impasse. Investors and the Fed, who rely heavily on data, have had to rely instead on indicators from the private sector. Silver spot climbed by 1.7% to $48,80 an ounce. Palladium rose 1.5% and platinum 0.9%, respectively, to $1,554.66. Both metals will still suffer a loss for the week. (Reporting from Brijesh Arora and Ishaan Patel in Bengaluru, Editing by Ronojoy Mazumdar).
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Blog finds that climate risk rarely causes ECB collateral to be downgraded
In a Friday blog post, the ECB stated that the European Central Bank already factors climate-related risks into the assessment for collateral used when borrowing money from the bank. However, this rarely results in credit rating changes. In its 2021 climate action plans, the ECB made the integration and assessment of climate risks a priority. The bank also expects that climate risk will be factored in to the credit ratings of assets provided by banks when borrowing from the central banking. The blog post, which is not necessarily the ECB, argued that "while climate risks are widely acknowledged, they rarely result in rating changes." "Several persistent obstacles still limit the full integration of climate risk into credit rating." Both the ECB's own internal credit assessment systems as well as external rating agencies are used to assess climate risk, but neither has had a significant impact on collateral value. The blog stated that when using its own system, the percentage of credit ratings that are affected by climate risk is less than 4%, and most adjustments only affect one rating grade. The blog post stated that in the case of external agencies environmental, social and governance factors account for approximately 13% to 20% of all rating decisions across the major agencies. However, climate change-specific ratings are only 2% to 7 percent of the total. The blog stated that while actual risk might be higher, it is difficult to assess because banks may mask the vulnerability of certain debtors. Risk mitigation strategies can also reduce their perceived risk. Rating horizons tend to be short and medium term, but climate risks are usually long-term. It argued that "Furthermore reliable, granular data on climate change remain scarce," especially for smaller issuers. Reporting by Balazs Coranyi Editing Tomasz Janovowski
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Commissioner: EU must protect the car industry against Chinese competitors
In an interview published Friday, the European Union's chief of industry said that it must defend its auto industry against Chinese competition. This includes reassessing its zero-emissions target for new cars, vans and trucks by 2035. Stephane Sejourne stated that the EU also needs to diversify its exports, and create new rules for protecting production in Europe. "We need to be less naive and bring ourselves up to the level of the major economies around the world." The former French Foreign Minister told Italian newspaper La Stampa that we are the only continent lacking strategic thinking in industrial policy. He warned "if we don't intervene, the number of cars sold and produced in Europe in ten (millions) years will drop from 13 to 9 million". He said, "We must be flexible in our goal to eliminate all internal combustion vehicles by 2035." In response to automakers who claimed that a complete switch to electric vehicles is no longer possible, the EU will review the target before the end of this year. Sejourne stated that European automakers should look to new markets and reduce bureaucracy. He said earlier this week that the European Commission intended to announce a new category affordable small electric vehicles to counter Chinese competition, and to revive the internal markets, as part a broader strategic plan to be announced on December 10. The Industry Commissioner also hinted that measures would be taken against Chinese production facilities in Europe. In Spain and Hungary, there are now manufacturers who assemble Chinese vehicles in Europe using Chinese components and Chinese staff. Sejourne stated that this was unacceptable. Sejourne, when asked whether Europe should adopt protective measures, said that "it is important to introduce conditions for foreign investment in Europe", and added that tariffs would however create trade tensions as well as hurt production. He said that to reduce the dependence on China, Europe must look at new suppliers, such as Brazil, Canada, and African countries. It should also introduce restrictions on the use of rare earth minerals and increase recycling.
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China registers platinum and palladium Futures
China has approved the registration of palladium and platinum futures and options. This is a major step towards the start of derivatives trading for the metals that are used by automakers. China Securities Regulatory Commission announced on Friday it will supervise the Guangzhou Futures Exchange in order to ensure a smooth and successful launch of palladium and platinum futures and options. The regulator has not disclosed a launch date. The Guangzhou bourse announced its plans in July of last year. It was founded in 2021, and it focuses mainly on green energy products. Industry insiders claim that the exchange has been in communication with futures companies and producers on the design of proposed contracts. The tight supply of palladium and platinum has pushed up prices this year. Analysts have increased their price forecasts for palladium and platinum in 2026. They cite tight mine supplies, tariff uncertainty, and a shift from gold investment. Reporting by Amy Lv and Xiuhao chen, Editing by David Goodman
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Stocks are impacted by fears of an AI rally and China's trade woes
Investors worried about the sustainability of an artificial intelligence rally led to a fall on Friday in tech-heavy markets. The fact that China's trade data was weaker than expected also shows how much President Donald Trump has been hit by his tariffs. STOXX, a benchmark index of 600 large European companies, fell 0.17% early Friday morning. Meanwhile U.S. stocks were set to open brighter with S&P futures and Nasdaq futures both up 0.3% after a Nasdaq drop of 1.9% on Thursday. The world's largest tech index has fallen 2.8% this week, and if that trend continues, it will be the biggest drop in a single week since April when tariffs were first announced. Since then, the Nasdaq index has increased by more than 50%. China's exports fell by 1.1% in October. This is the lowest performance since February. It has chilling effects on Asian markets, as it reminds them of China's dependence on American consumers. Both the Shanghai Composite Index and China's blue chip CSI300 Index finished Friday 0.3% lower. Japan's Nikkei dropped 1.2%, resulting in a loss of 4.1% per week, the biggest since April. In Seoul, the KOSPI declined 1.8%, resulting in a weekly drop of 3.7%, the biggest since February. Softbank Group Corp, a tech investor, fell nearly 20% in the past week. Chip and cable manufacturers were also amongst the worst performers. Bitcoin, which is often a bellwether of tech sentiment, has fallen 8% this week to $101,525. Fears over bubbles in AI stocks The pullback of AI-related shares has not been triggered by any obvious event, but the reaction of the market to recent results indicates that some fears are beginning to surface about the possibility of a bubble and profitability questions. Meta's stock plunged late last month after it revealed large capital expenditures as the company builds data centres to support its AI push. Palantir Technologies, a data and AI company, has also seen its shares fall despite exceeding earnings expectations. Herald van der Linde is the head of equity strategies for Asia Pacific, HSBC. "And another one says it. Then a third. A fourth person says that these three are all selling. It's possible that I am selling, too. It's just a change in market sentiment. This could be happening now." BONDS AND GOLD SHINE as SAFETY is Sought Bond markets rose on the back of a demand for safety, and as second-tier U.S. data indicated a wave layoffs which could support future rate cuts in the U.S. The benchmark 10-year U.S. Treasury rates fell 6.4 basis point to 4.09% Thursday, after Challenger, Gray & Christmas, a firm that specializes in outplacement, said that there was a spike in the number of announced job cuts for October. On Friday, the yields remained unchanged. These private surveys gained market attention during the prolonged U.S. shutdown, which has stopped official U.S. statistics publication. The dollar index (which measures a currency's strength in comparison to a basket of six other currencies) rose 0.2%, reaching 99.845, whereas the euro remained largely unchanged at $1.1535. The safe-haven Japanese yen is expected to rise modestly by 0.3% per week, last trading at 153.46 yen for every dollar. Gold was trading above $4,000 per ounce, as the government shutdown boosted demand for safe-haven assets. However, the precious metal is still some distance from its record high of $4381.21 set on October 20, Brent crude futures rose 69 cents or 1.09% to $64.05 per barrel after three days of declines. This was due to concerns about an excess supply in the U.S. and a slowing demand. The price of soybeans is expected to drop by a week, but there are no signs yet that China will be buying 12 million tons before the year's end. (Editing by Lincoln Feast Jacqueline Wong Sharon Singleton
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India's Hindalco exceeds its quarterly profit forecasts on the back of higher commodity prices
Hindalco Industries, India's largest industrial company, beat its quarterly profit expectations on Friday after higher commodity prices offset the pressure from tariffs at its U.S. subsidiary Novelis. Aditya Birla Group, which owns one of India's largest aluminium and cobalt producers, reported a 21.3% increase in its consolidated net income to 47.41 billion rupies ($539.4 millions) for the quarter ended September 30. LSEG data shows that analysts estimated a 45.65 billion-rupee amount. In the quarter reported, benchmark three-month copper and aluminium prices rose by 8.2% and 5.6%, respectively, year-on-year amid uncertainty about U.S. tariff policies. The increase in aluminium prices led to a 15.1% rise in revenue from Novelis, Hindalco’s aluminium recycling division that is slated to be listed and contributes about 60% of its top line. The margins were still under pressure due to the high scrap costs and U.S. Tariff-related headwinds. However, demand was strong, with strong aerospace and automotive orders. A fire at a factory during the quarter also resulted in a charge of $21 million. The domestic demand was boosted by a strong manufacturing sector. Hindalco India's copper segment has seen a 11% increase in revenue, while the aluminium downstream and upstream businesses have grown by 10% and 20% respectively. Total expenses increased 13%, while revenue from operations rose 13.5%. The company has also approved a 102.25 billion-rupee investment to increase capacity at its aluminum plant in Odisha, a state located in eastern India.
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Rescue efforts continue to reach at least three victims of South Korea's power plant collapse
An official of the South Korean Fire Department said that on Friday, at least three people had died following the collapse of an enormous structure at a South Korean power station that was being prepared to be demolished. Kim Jung-shik told reporters that two other workers were found under the rubble, and it was presumed they had died. Two others are still missing. On Thursday afternoon, workers were removing parts of a massive steel structure that was a decommissioned heating system when it collapsed. The footage from the scene shows the structure toppled and mangled, surrounded by other structures. Rescuers used heat sensors, remote scopes, and search dogs to help locate other trapped workers. However, their efforts were hampered by a risk of further collapse, Kim explained. The South Korean president, Lee Jae Myung has made improving workplace safety a top priority and has ordered a massive effort to rescue the trapped workers. (Reporting and editing by Jack Kim, Joyce Lee)
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ASIA GOLD - India discounts increase as demand drops post-festivals. China activity also cools
The physical gold demand in India was subdued in this week's trading as the volatile price levels discouraged buyers and led dealers to offer steep discounts in order to attract them. In China, demand also cooled due to new tax regulations. Indian dealers are offering a discount The discount is now up to $14 per kilogram over the official domestic price, including 6% import duties and 3% sales taxes, compared to last week's up to $12. A New Delhi jeweller said that investment demand was the main driver of the market last month. But now, even investors are waiting for a clear trend in prices. The global spot gold price is on track to gain a little each week, but it has fallen about 9% from its record high of $4381.21 set on October 20. In India, domestic gold prices are trading at around 121,000 rupees (1,376.64) for 10 grams after reaching a record of 132 294 rupees per gram last month. India celebrated Dhanteras (Diwali) and Diwali last month. These festivals are when gold is considered auspicious, and they're also the most popular gold-buying holidays in the country. Jewellers are rushing to replenish their stock after a good festival season. However, many are delaying the purchase of new items. Bullion traded in top consumer China at a discount of up to $5 per ounce above the global benchmark spot rate. . Last week, the price of bullion was equal to $4 per ounce. According to the Ministry of Finance, China has ended its long-standing policy of tax exemption for certain gold retailers. The new policies have reduced it to 6% as of November 1. The lower tax exemption will last through December 31, 2027. Barnard Sin is the regional director for Greater China of MKS PAMP. He said that "China's gold market has cooled, due to regulatory challenges and new VAT rules (value added tax). Exchange-traded investments have remained largely unaffected." Expect a short-term decline, especially in jewellery consumption due to the higher costs for retailers (in China). In Singapore Gold in Hong Kong traded at a premium of $1.7-$3.5. Hong Kong Gold Gold was priced between $1.50 to $2.50. In Japan, gold The spot price was equal to the sale price due to a weak demand. ($1 = 87.8950 Indian rupees) (Reporting by Ishaan Arora and Brijesh Patel in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Subhranshu Sahu)
Buffett states Berkshire in excellent hands, admires Apple in spite of decreasing stake
Warren Buffett assured Berkshire Hathaway investors on Saturday that the executives expected to prosper him were ready for the task, and he heaped appreciation on Apple although Berkshire trimmed its position in the iPhone maker.
Speaking at Berkshire's annual conference, the legendary financier commemorated his late service partner Charlie Munger and said he expected the corporation's cash pile, now a. record $189 billion, to keep growing.
The conference was the 60th for Buffett, who since 1965. changed Berkshire from a stopping working fabric company into an. $ 862 billion colossus owning the BNSF railway, Geico car. insurance coverage, Dairy Queen and dozens of other organizations.
Buffett, 93, told shareholders that Vice Chairmen Greg Abel. and Ajit Jain have actually proven themselves the right people to lead. Berkshire after he leaves.
Abel, who was designated Buffett's successor as chief. executive in 2021, and Jain have straight supervised Berkshire's. operating subsidiaries considering that 2018.
When you have actually got someone like Greg and Ajit, why choose. me? Buffett said. It has exercised incredibly well.
I don't know rather how (Abel) does it, but we've got the. right person, I can tell you that, he included.
Buffett said he would want Abel, 61, upon ending up being chief. executive, to have last word on capital allowance decisions. concerning Berkshire's portfolio of public stocks.
Financiers had actually long considered Todd Combs and Ted Weschler,. who manage part of Berkshire's $335.9 billion equity portfolio,. leading candidates to handle more or all of it.
The meeting, part of a weekend Buffett calls Woodstock for. Capitalists, was the very first because Munger passed away in November at age. 99. Buffett described Munger, his long time his friend and foil,. as the architect these days's Berkshire.
Buffett offered no sign he prepares to step aside, telling. shareholders, I feel fine, while joking he shouldn't take on. four-year employment contracts.
DECREASING APPLE STAKE, GROWING MONEY
Before the conference, Berkshire revealed first-quarter. outcomes, consisting of a 39% dive in operating revenue to a record. $ 11.2 billion.
In a surprise, Berkshire reported it had actually sold about 13% of. its Apple shares, lowering the worth of its stake to $135.4. billion from $174.3 billion. Apple's stock rate fell 11% in the. quarter.
The sale was the primary reason Berkshire's money stockpile soared. Buffett said money may grow to $200 billion this quarter,. reflecting the threats he sees from high stock market assessments. and geopolitical conflicts.
In spite of decreasing the Apple stake, Buffett applauded the. business, stating it was an even better service than two of. Berkshire's earliest and largest investments, American Express. and Coca-Cola.
The iPhone was among the best items, and it may be. the greatest product, of perpetuity, Buffett said with Apple. Chief Executive Tim Cook in the audience.
Berkshire invested in Apple in 2016, and the typically. tech-phobic Buffett concerned see it as a durable goods business. with strong rates power and devoted clients.
While some investors have actually revealed concern that Apple. consisted of excessive of Berkshire's equity portfolio, Buffett stated. Apple would stay his business's most significant stock investment,. barring unexpected occasions.
Abel, on the other hand, promised to combat lawsuits seeking 10s of. billions of dollars from Berkshire's PacifiCorp energy system. over Oregon wildfires in 2020. He explained it as a substantial. obstacle, and said numerous claims were unproven.
Investors reelected all 14 Berkshire directors, and. turned down 6 shareholder propositions, all of which Buffett. opposed.
At the start of the meeting, investors viewed a video. homage to Munger, consisting of scenes of Omaha from 1924 when he. was born and clips of Buffett and Munger through the years.
Munger had actually been a fixture on stage with Buffett at the. meetings, understood for laconic and acerbic resurgences to Buffett's. musings about Berkshire, the economy, Wall Street and life.
Berkshire's stock is up 23% over the last year. While that. lags the Standard & & Poor's 500's 25% gain, Berkshire has. increased 218% over the last decade versus the S&P's 172% gain.
LINES FORMED HOURS BEFORE SATISFYING
Before the conference, thousands lined up in raw, rainy weather. to enter the arena, sometimes a number of hours in advance. When the. doors opened at 7 a.m., lots of ran for the best seats.
The weekend likewise featured an exhibit hall for investors. to purchase goodies such as Berkshire Tee shirts and Squishmallows toys. at displays by Berkshire-owned companies.
Serena Lam, 32, an investment supervisor who traveled with 40. others from Hong Kong, stated she got to 2:30 a.m.
I wish to see Warren Buffett, she stated. I want to get his. viewpoint about Japanese stocks. I flew over 25 hours for. this.
As usual, Buffett interspersed talk about Berkshire's. portfolio with musings about wealth and life, including his own.
I take pleasure in managing cash for the people who trust me. I like. the feeling of being relied on, he said. If I'm lucky, I can go. on for six or 7 years, or it might end tomorrow..
(source: Reuters)