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Gold falls as the dollar strengthens on Fed rate caution
Gold prices fell on Friday as the dollar strengthened on the uncertainty about further Federal Reserve rate reductions, but the bullion is still on track for its third consecutive month gain. As of 0700 GMT, spot gold was down 0.3%, at $4,011.60 an ounce. Bullion is up 4% this month. U.S. Gold Futures for December Delivery rose by 0.1%, to $4.021.20 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that the Fed Chairman's hawkish stance this week did not do gold any favors. The prospect of a December rate cut is now much less certain than previously believed, which has helped boost the dollar and made things more difficult for gold in terms of yield. Dollar index nears its highest level for three months against rival currencies, making gold more expensive to other currency holders. The Fed cut rates on Wednesday by 25 basis points, for the second consecutive time in this year. This brings the overnight benchmark rate down to a range of 3.75% - 4.00%. After Jerome Powell’s comments, traders reduced their bets on another rate reduction at the next policy meeting scheduled for December. According to CME Group’s FedWatch tool, markets now price in a probability of 74.8% for a 25-bp reduction compared with 91.1% a week earlier. Donald Trump, the U.S. president, announced on Thursday that he has agreed to reduce tariffs against China in exchange for Beijing crackingdown on illicit fentanyl, resumed U.S. soya bean purchases, and kept rare earths exports flowing. Gold was discounted in India this week for the first seven-week period, and a drop in prices boosted activity in other Asian hubs. Silver spot was up 0.4% to $49.1, platinum 0.6% to 1,621.60, and palladium 1.2% to $1462.43. (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu, Mrigank Dhaniwala, Harikrishnan nair)
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Swiss National Bank profits shine with gold price surge
The Swiss National Bank announced a profit of 27,93 billion Swiss Francs ($35.22billion) for the third quarter, the central bank reported on Friday. This was boosted by the rising value of the gold reserves. Between June and September the central bank reported a gain in gold valuation of 14.33 billion Swiss francs, compared to the gain of 4.41 billion francs last year. According to UBS calculations, the SNB's average quarterly profit from gold over the past 10 years was less than two billion francs. GOLD GAINS FROM SAFEHAVEN DEMAND Gold prices have increased by 53% in the past year, as investors sought to hedge against political and geopolitical uncertainty. Gold has become more appealing due to the weakening of the U.S. Dollar. Rate cuts by the U.S. Federal Reserve also reduced the yield on other assets that are less risky, such as U.S. Treasuries. The SNB reported that it had also made a profit of 13,63 billion francs during the third quarter from the foreign currency positions it held, as well as the bonds and shares it purchased with the foreign currencies it bought. The central bank increased its profit for the third quarter to 27,93 billion francs from 5,67 million francs a year ago. Florian Germanier, economist at UBS, said: "It is very unusual that the SNB makes so much profit on gold but it reflects the huge price increases gold has seen this year." The profit is simply a side effect from holding an asset that is considered to be the ultimate safe-haven, and which the SNB must hold in order to diversify their holdings and carry out monetary policies.
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China's steel production will fall below 1 billion tonnes in 2025, but the industry imbalance persists
China's steel production will drop below 1 billion tons by 2025. This is on track to meet government pledges to reduce production. However, a mismatch between supply and demand still exists. The world's biggest producer of crude steel has seen its output fall since 2020. However, it was still over 1 billion tons by 2024. Beijing promised in March that it would continue to cut steel production this year, to restructure a sector plagued by excessive capacity. A prolonged downturn on the steel-intensive real estate market has led to a shortage of steel. The steel consumption in 2025 fell by 5.7%, while the crude steel production declined by 2.9%. At a briefing for reporters, Jiang Wei (Vice Chairman of China Iron and Steel Association) said that consumption this year will fall by a fifth consecutive year. China's steel sector will have its best year since the 2022, with many listed companies reporting significant increases in their third-quarter net profits. Steel prices have been halted by a surge in exports, which has partially offset a faltering domestic demand. However, the influx of cheap Chinese steel threatens to trigger broader protectionist reactions worldwide. Steel billet, or lower-value blocks of semi-finished steel, has been exported three times more than in the same period of 2024. This trend, the steel association warned earlier this year, could deter the industry from upgrading and is already increasing the price of steelmaking materials, especially iron ore. Beijing has committed to carbon neutrality in 2060. To achieve this target, the steel industry will need to invest approximately 20 trillion yuan. (Reporting and editing by Christian Schmollinger, Kate Mayberry and Amy Lv)
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Adani Power is the lowest bidder in India's Assam State for a 3.2 GW coal auction
Adani Power, an Indian company, has been selected as the lowest-bidder in a tender for the supply of coal power to the northeastern Assam state. The announcement was made during the post-earnings conference call. Adani Power said that the bid had been approved by the state's electricity commission and it expects to receive formal notification of the award soon. The tender is a part of an overall pipeline of more than 22 GW in thermal power bids from states such as Rajasthan, Uttar Pradesh Gujarat and West Bengal. They are seeking to secure long-term capacity due to rising demand and intermittent renewable production. Adani Power announced in August that it would invest $5 billion into two coal-powered power plants. The company plans to increase capacity from 18 GW to 42 GW by 2032. 8.5 GW of that is already locked in under long-term contracts. Adani Power has said that it will invest approximately 2 trillion rupees over a long period of time in the expansion plan, with the 12 GW expected to be commissioned before the fiscal year 2030. A company executive revealed that the power firm had pre-ordered the boilers, generators, and turbines needed for the expansion. Deliveries will be staggered over the next 38 to 75 months. Separately Adani Power reported that its power dues to Bangladesh had narrowed down to 15 days' supply. This compares to $900 million last May and almost $2 billion at the beginning of this year. Sethuraman N.R., Sonia Cheema (Reporting)
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Japan's Kansai Electric shares rise 5% after forecasting higher profit, dividend
Kansai electric power Co shares rose 5% on Friday in Tokyo, outperforming other markets, after the company's largest nuclear power utility raised its profit forecasts and promised generous returns to shareholders. Kansai, in which U.S. activist investor Elliott became a large minority shareholder last month, lifted its annual profit forecast by 22% to 360 billion yen ($2.4 billion) on Thursday, on higher electricity demand and stronger-than-expected earnings at its fuel trading unit. It also raised its full-year forecast dividend to 75 yen from 60 yen, and promised that the payout ratio would be 25-35% starting in the next fiscal. Kansai shares rose 5.2% to 0512 GMT. This was higher than the Nikkei Index, which had risen 1.9%. Elliott announced its ownership of the stock on September 10. The share price has increased by around 7%. Elliott has been a shareholder in Tokyo Gas since November 19, last year. Shares are 42% higher today. Elliott wants both companies to maximize shareholder value through the sale of non-core assets. This includes their massive real estate portfolios. Sources familiar with the situation said that Elliott had earlier asked Kansai for a 100-yen dividend increase. Tokyo Gas has raised its full-year profit estimate to 194 billion Japanese yen from 131 billion, due to the fact that it expects to earn 30.7 billion yen from property sales. Kansai sees real estate as an essential business that it wants to expand, according to a Kansai executive.
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Japan's Seven & i is looking for M&A and partnership deals to fuel growth
Yoshimichi M. Maruyama, chief financial officer of Japan's Seven & i, said that the company is working on a number of initiatives including potential M&A and partnership deals aimed at achieving substantial growth. 7-Eleven, the Japanese retailer that owns convenience stores in Japan, wants to show investors how it can grow after Canada's Couche-Tard pulled out of a $46 billion bid offer last July. Seven & i said that it would pursue a listing for its North American convenience-store subsidiary in the second half 2026 and buy back shares worth about 2 trillion yen (13 billion dollars) through fiscal year 2020. Maruyama told investors at a recent investor briefing that "we are not planning to sell a large number of shares". He said that the company would still buy back shares even if there was no offering. Seven & i shares have fallen by about a fifth in the last year. TAG EUROPEAN EXPANSION The retailer said that it also aims to make Europe a "fourth main pillar of growth", alongside Japan, North America, and Asia-Pacific. Currently, it has 365 shops in Scandinavia. Ken Wakabayashi is the CEO of 7-Eleven International. He said that Europe, outside Scandinavia, was a blank space for 7-Eleven. The retailer also plans to enter markets with high growth potential in Africa, the Middle East and Latin America.
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Morning Bid Europe- No tricks, but some treats for the markets
Ankur Banerjee gives us a look at what the future holds for European and global markets Investors are unsure about the direction of global monetary policy in the near future, but a trade truce reached between the top two economies in the world has calmed nerves. Meanwhile, a mixed bag mega-cap earnings have kept the market in check. As the week began, there were signs that tensions between China and the U.S. had cooled. The Federal Reserve also delivered an expected rate reduction, but Chairman Jerome Powell warned that this could be the last cut in 2025. This helped to firm up the dollar. It is currently on track for a gain of nearly 2% for the month. The yen was hovering at its lowest level since Feburary, just below 154 dollars, which prompted some verbal scolding from Tokyo officials. As expected, the Bank of Japan kept rates unchanged on Thursday. However, markets interpreted Governor Kazuo ueda's comments as dovish despite his hints that an interest rate increase is still on the table. The Nikkei has benefited from the fall in the yen. It is down almost 4% for October. This was a huge boost to the Nikkei. It has surpassed another record and is now on track for a 16% gain for the month. That would be its best monthly performance since Jan 1994. The "Takaichi" trade in all its glory. The South Korean stock market, Kospi, has been the best performing in the world so far this year. It is expected to rise 20% in October. This will be the largest increase since January 2001. Artificial intelligence has been the focus of much excitement in the stock markets this year. Investors are still trying to get a better picture of the earnings season, which has so far been a mixed one. Amazon shares surged after cloud revenue rose to its highest level in almost three years. This lifted Nasdaq Futures and set up a successful Halloween for tech stocks. As businesses continue to invest in AI software, the online retailer has benefited. Apple is also expected to boost the market after it announced that its holiday quarter forecasts exceeded Wall Street's expectations. The following are key developments that may influence the markets on Friday. Economic events: October inflation figures for the eurozone and France, September retail sales in Germany
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Gold falls as Fed rate caution increases dollar, but is set to rise for 3rd month.
Gold prices fell Friday as the dollar strengthened on fears of further Federal Reserve rate reductions, but bullion is still on course for its third consecutive monthly gain. As of 0459 GMT, spot gold was down 0.4%, at $4,005.54 an ounce. Bullion is up 3.9% this month. U.S. Gold Futures for December Delivery remained at $4,018.10 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that the Fed Chairman's hawkish stance this week did not do gold any favors. The prospect of a December rate cut is now much less certain than previously believed, which has helped boost the dollar and made things more difficult for gold in terms of yield. Dollar index nears its highest level for three months, making gold more expensive to other currency holders. The U.S. Central Bank cut interest rates on Wednesday by a quarter percentage 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%. After comments from Chairman Powell, traders have reduced their bets on the Fed cutting rates at its next policy gathering in December. According to CME Group's FedWatch, the markets now price in a probability of 74.8% for a 25 basis-point reduction from the Fed by December compared to a chance of 91.1% a week earlier. Donald Trump, the U.S. president, said that he and Chinese President Xi Jinping had agreed to reduce tariffs against China in exchange for Beijing crackingdown on illicit fentanyl trafficking. He also stated that the U.S. would resume its soybean purchases as well as continue exports of rare earths. Gold was discounted in India this week for the first seven-week period, and a drop in prices boosted activity in other Asian hubs. Silver spot was unchanged at $48.89 an ounce. Platinum was stable at $1,610.75, and palladium rose 1.5% to $1466.42. (Reporting and editing by Subhranshu sahu, Mrigank dhaniwala in Bengaluru)
EXPLAINER-COP29: What are the essential concerns at the UN environment summit in Baku?
This month's U.N. environment summit COP29 in Baku, Azerbaijan has been called the environment finance COP for its central goal: to agree on how much money ought to go each year to assisting developing nations handle climaterelated expenses.
That discussion could be hard following Tuesday's. re-election of previous U.S. President
Donald Trump
, a climate denier whose campaign
pledged to remove
the leading historical greenhouse gas emitter and leading oil and. gas producer from the landmark 2015 Paris Contract to fight. climate modification for a 2nd time.
COP29 delegates will likewise be looking to advance other offers. made at previous summits.
Here are a few of the leading program products for the Nov. 11-22. summit.
ENVIRONMENT FINANCING
The acronym dominating this year's summit is NCQG - which. represent the New Collective Measured Objective.
That describes the new yearly environment financing target,. which is indicated to start when the current $100 billion promise. expires at the end of this year.
Wealthy countries have just in some cases fulfilled that yearly objective. considering that 2020, resulting in growing mistrust among the world's. climate-vulnerable countries. As COP29 aims to set a much greater target for the years ahead,. wealthy nations firmly insist the money can not come completely from their. budgets. Rather, they are talking about a much more intricate effort that. would include reforming the worldwide multilateral loaning complex. in ways that de-escalate climate-linked monetary dangers and. motivate more private capital. It is unclear how much of the total yearly target would be. used by rich nations. Likewise unresolved is whether. fast-developing nations like China or the Middle East Gulf oil. states must likewise contribute, a position promoted by the. United States and European Union.
By reforming the international banking system, countries hope to. drive up the annual environment financing sum. U.N. firms estimate. that trillions of dollars are needed annual, but authorities with. the COP29 host Azerbaijan stated that a number in the numerous. billions has a more practical chance of being approved by. consensus.
FOSSIL FUEL SHIFT. Last year's COP28 summit in Dubai ended with countries agreeing. for the very first time to shift far from nonrenewable fuel sources in. energy systems.. Since then, nevertheless, both fossil fuel use and export sales have. continued to increase globally, while brand-new locations have actually been authorized. for oil and gas production in nations like Azerbaijan, the. United States, Namibia, and Guyana.
With nations and companies uncertain in their willpower to. quit coal, oil and gas, arbitrators stated COP29 was not likely to. provide timelines or stronger language on nonrenewable fuel sources, however. some countries may promote a stop in new coal plant. allowing.
Countries will also be going over development in their pledge. to triple renewable resource capacity and double energy. effectiveness, as a way of alleviating demand for nonrenewable fuel sources.
GUIDELINES FOR CARBON MARKET. Governments are eager to deal with rules for trading carbon. credits earned through the preservation of forests and other. natural carbon sinks. While these credits are implied to be issued to nations as. optional offsets to their nations' emissions, they can also be. traded on open markets. Business leaders are searching for COP29. to set rules for guaranteeing openness and ecological. stability in jobs logged with the Paris Agreement Crediting. System (PACM).
Still to decide are key problems consisting of how the PACM. supervisory body will set standards, if credits ought to be. assessed before being traded, and whether and when credits can. be withdrawed.
IMPROVING TRANSPARENCY. Azerbaijan hopes countries will send their very first environment. action progress reports throughout the top ahead of a Dec. 31. deadline, however it is unclear if countries will do so. These so-called Biennial Openness Reports (BTRs) are meant. to describe a nation's progress in reaching its climate objectives -. and just how much further they require to enter setting fresh goals by. February. As it stands, nationwide pledges to cut emissions still. fall far short of what is required, the U.N. said last week.
The BTRs will likewise offer insight into just how much finance is. presently required in developing countries, both for transitioning. their economies away from fossil fuels and for adjusting to the. conditions of a warmer world.
ADJUSTMENT IN FOCUS. Countries last year dedicated to a framework of standards for. national strategies to help people adapt to environment disruptions such. as warmer days, increasing water level or dry farmlands.
But the structure for adaptation lacks details, such as. measurable targets for measuring development or methods for. linking jobs with environment finance.
Countries want to set more particular adaptation objectives throughout. COP29.
MONEY FOR LOSS AND DAMAGE. Two years considering that Egypt's COP27 top accepted assist poor. nations with the costs of climate-driven catastrophes like. extreme floods, storms or drought, about $660 million has been. set in motion through the freshly developed Fund For Reacting to Loss. and Damage, that will be headquartered in the Philippines. Climate-vulnerable countries will get in touch with wealthy countries to. deal more for the fund.
(source: Reuters)