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Gold rises on dollar decline; Trump-Xi Meeting in Focus
Gold prices rose on Thursday as a result of a slight drop in the dollar. Investors were waiting to see if U.S. president Donald Trump and Chinese counterpart Xi Jinping could reach a deal. As of 0235 GMT, spot gold was up by 0.2% to $3,937.88 an ounce. U.S. Gold Futures for December Delivery fell 1.2% to $3950.70 an ounce. The dollar index dropped 0.2%, after reaching a two-week peak against its rivals during the previous session. This made gold cheaper for holders of other currencies. "There is no catalyst other than a little technical bounce. This week, gold has been under pressure. The U.S. China trade deal is a negative for geopolitics and trade, according to Capital.com analyst Kyle Rodda. Gold is also negatively affected by the Federal Reserve's hawkish stance and the decline in odds of another rate reduction in December. This dynamic could cause gold to continue its decline. "Gold is on the rise in the long term." The U.S. Central Bank cut interest rates for the second consecutive time by a quarter percentage point, bringing benchmark overnight rates to a range of target 3.75%-4.00%. Fed Chair Jerome Powell stated that officials are still struggling to come to a consensus on what the future holds for monetary policies and that the financial markets shouldn't assume another rate reduction will occur at the end the year. Gold that does not yield is a good investment in low-interest rate environments and economic uncertainty. The market is now focused on Trump's meeting in South Korea with Xi. U.S. negotiators are signaling that they want to return to the fragile truce in the trade war, but tensions still remain high. Long-term economic irritations will continue between geopolitical competitors. Trump and South Korean president Lee Jae Myung finalised the details of their fraught deal at a South Korean summit, and the U.S. President also sounded optimistic about the summit with China’s Xi. Spot silver was unchanged at $47.51 an ounce. Platinum rose 0.3% to 1,590.21 while palladium increased 1.2% to $1417.80. (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu)
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Asia stocks rise as Fed cuts and Trump-Xi Meeting in focus
Asian stocks rose in the morning trade on Thursday, after the Federal Reserve lowered interest rates. U.S. leaders and Chinese leaders also met to negotiate a deal. The Bank of Japan is due to announce its interest rate decision shortly. MSCI's broadest Asia-Pacific index outside Japan rose 0.5% last, while U.S. S&P500 e-minis futures advanced 0.4% after Wall Street stocks posted a small loss to end a four-day streak of gains. As the Trump Administration imposes tariffs on imports from abroad, global markets are undergoing a series of central bank decisions. These will provide clues as to the future path of interest rates. Kyle Rodda is a senior analyst at Capital.com, in Melbourne. He said, "There are a lot of things to digest and the Bank of Japan's decision should not be forgotten, as it could have a major impact on the region if they were to say or act hawkishly today." The U.S. China trade deal may reignite animal spirit, although I suspect, with the rally on Wall Street this week and the boost given to the Asian region, that a lot of good news has already been priced in. Donald Trump, the president of the United States, is meeting with Chinese leader Xi Jinping at this time in South Korea. U.S. negotiators are signaling that they want to return to the fragile truce in the trade war, but tensions between geopolitical opponents remain high. Sally Auld is the chief economist of the National Australia Bank, Sydney, in a podcast. She said that after a lot of activity in the first two days of the week, the central banking story will probably end with a whimper over the next 24 to 48 hours. The Nikkei fluctuated between gains, losses, and was lastly 0.1% higher before a Bank of Japan decision on Thursday. It is widely expected that the central bank will keep interest rates unchanged. The U.S. Dollar was last down 0.2% against the yen at 152.455 yen. This is after comments by U.S. Treasury Sec. Scott Bessent, who called for faster rate increases to avoid a currency devaluation. Analysts said that this may have an impact on the BOJ communication about the pace of future rate hikes. Fed Chair Jerome Powell said that policymakers will likely become more cautious in the absence of additional job and inflation data. The traders have reduced their predictions of a rate cut by 25 basis points next month. This was a prediction that had been considered a near certainty earlier. Fed funds futures indicate a 67.8% chance that the Fed will maintain rates at its December 10 meeting, compared to a 9.1% probability on Wednesday. The yield of the 10-year Treasury Bond in the United States was trading at a high of 4,068% last week, an increase of 1 basis point from a previous closing of 4,058%. The dollar index (which measures the strength of the greenback against a basket six currencies) has slipped from its two-week high and is now down by 0.1% to 99.032. The last increase in gold was 0.2% to $3,937.19 an ounce. The euro last firmed up 0.1% at $1.1617, ahead of the policy decision made by the European Central Bank in the afternoon. It is expected that the bank will leave interest rates unchanged for the third time in a line. The KOSPI index rose by 1.1% in South Korea after Trump and President Lee Jae Myung reached a final agreement on their trade deal. Samsung Electronics shares soared by 4.3% on Friday after the company reported a 32% increase in its third-quarter operating profits. Investors are becoming more anxious about the AI buildout as corporate earnings season approaches. This is despite the fact that the U.S. economic outlook appears to be in good health. The pressure is being put on the tech megacap stocks, which account for the largest weighting of the S&P 500 Index. Meta forecast on Wednesday "significantly larger" capital expenditures next year, as its revenues exceeded market expectations. Microsoft's spending for artificial intelligence infrastructure reached a record high of almost $35 billion during the third quarter. Both companies' shares fell. Alphabet, the parent company of Google, a rival tech giant, bucked this trend. Its shares rose in after-hours trade after exceeding revenue expectations. Brent crude oil was down 0.5% last week, at $64.62 a barrel.
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Profit-taking dampens gains as iron ore prices rise on hopes of a US-China trade agreement
Iron ore futures rose a fourth consecutive session on Thursday. This was boosted by hopes for a trade agreement between the two world's largest economies. However, gains were limited by profit-taking due to fears of price reversal. Donald Trump, the U.S. president, and Xi Jinping, China's leader were scheduled to meet in South Korea Thursday morning to discuss a possible return to a fragile truce in the trade war between these two superpowers. As of 2100 GMT, the most-traded contract for January iron ore on China's Dalian Commodity Exchange was up 0.81% to 806 yuan (113.15 dollars) per metric ton. It had earlier reached a session high of 808 Yuan, which is a record by two weeks. The benchmark December Iron Ore at the Singapore Exchange was unchanged at $107.2 per ton, after reaching its highest level since October 14, at $107.5. Steven Yu, senior analyst at Mysteel, stated that the expectation of an increased pickup in portside inventory also puts pressure on prices. Yu stated that "the price rally has already exceeded expectations and the thinning of spot trading did not inject the same-scale momentum into spot prices." Investors were cautious about signs of seasonal weakness in the steel market, despite cheering macroeconomic gains. China's factory output likely fell for the seventh consecutive month in October as producers tried to export their price wars at home. Some investors booked profits due to concerns about a possible price reversal after a rally that was repeated, said a Zhejiang trader under condition of anonymity because he wasn't authorized to speak to the media. On the back of expectations that supply will be constrained, coke and other steelmaking materials, such as coking coal, have risen by 2.29% and 1.07 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange have advanced. The benchmarks for steel on the Shanghai Futures Exchange advanced.
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Government says that the revised Australian Environment Law will benefit business and nature.
The Australian government introduced a bill on Thursday that would simplify approvals for construction and resource projects, while also better conserving nature. The government stated that the legislation would give a boost to the economy, making it easier for people to build mines, gas facilities, renewable energy projects, and homes. The typical approval time for environmental projects has more than doubled over the past two decades, to two years. Australia exports liquefied gas, metals, and coal. It also works with its allies. Include the United States To break China's dominance in the mining industry, we must increase production of key minerals. A housing shortage is also a problem in the country, and it's trying to quickly switch to solar and wind power. Murray Watt, the Environment Minister, said that years of debate over new legislation must come to an end. Watt stated, "We have seen projects like housing, renewables, and others strangled by red tape in a time when we urgently need them to be delivered." Watt stated that he would like to have the bill passed through both chambers of parliament before the end of this year. This will require votes from the Senate either by the Greens or the Coalition of the Centre-Right. Watt said that he is in negotiations with both. The Coalition is looking for a more business-friendly bill, while the Greens are seeking stricter environmental protection. Business Council of Australia welcomed the move, calling it an opportunity to fix the broken system. However, Bran Black, CEO of the Business Council of Australia warned that "further reforms are needed to ensure the economy and environment benefit." The lobby group proposed nine changes. These included greater clarity regarding greenhouse gas reporting and maintaining existing processes in order to avoid further delays with project approvals. Watt's Office said that the bill was intended to provide clear and concise definitions of what constitutes "unacceptable impact" as well as higher penalties in case of violations. Clean Energy Council CEO Jackie Trad described it as a step in a positive direction. In recent years, the approval time for renewable energy projects has exploded. This is a concern to investors and clean energy developers. Trad stated that "we cannot afford to wait five more years" to achieve this. Reporting by Peter Hobson, Canberra; and Helen Clark, Sydney. Editing by Stephen Coates & Kim Coghill.
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Shares of Australia's Ampol drop due to weaker retail volume; margins at Lytton increase
Ampol, Australia's largest fuel retailer, recorded a lower third-quarter sales volume due to softer performance in its domestic convenience retailing business as a result of challenging weather conditions during August. The company's shares fell by as much as 3,1% Thursday, their lowest intraday performance since June. Stocks fell to their lowest level since October 23, 2009. The Australian convenience retail segment performed poorly compared to the previous year when it had enjoyed favorable market conditions due to the decline in fuel input costs. In August, New South Wales, Queensland, and other states experienced prolonged bad weather, which negatively affected sales. However, conditions began to improve in September. The company reported a total third-quarter volume of 6,028 millions litres. This is a 7.6% drop compared to the previous year. Ampol attributes the decline in volumes to the "timing of the opportunities and the availability during the period". Ampol has reported an increase of 22.2% in the refining margins on its Lytton refinery. This was due to improved performance and higher margins from fuel production in Asia. The company reported that its Lytton Refinery margin increased from $8.71 per barrel to $10.64 in the third quarter. The increase in the refining margins was attributed to the strengthening of Singapore refine cracks compared to first half of fiscal year. The company said that global refining margins had risen since late September, due to a tightening of supply, mainly driven by refinery interruptions and low inventories. Newly announced EU restrictions on Russian Crude and U.S. Sanctions on Russian Oil Firms have also added pressure. Ampol said that the replacement cost earnings for the quarter had been higher than the average quarterly result of the first half due to the stronger margins in the fuel and infrastructure businesses, excluding Lytton. The refinery also contributed to the improvement.
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Sources: China lifts partial iron ore ban on purchases from Australia's Hancock
Three sources with direct knowledge said that China's state buyer allowed its steel mills the opportunity to buy a certain type of iron ore again from Australia's Hancock Prospecting, after preventing such sales for more than a year during a dispute over negotiations. China Mineral Resources Group told steelmakers in October that they can again purchase MB fines from Hancock. This lifted a previously unreported ban. Two sources, who spoke on the condition of anonymity due to the sensitive nature of the subject, said that Chinese steel mills have been prohibited from purchasing MB fines since early 2024. This is because negotiations regarding CMRG being the exclusive seller of Roy Hill in China, which is now part of Hancock's portfolio, stalled. CMRG and Hancock have not responded to requests for comments. CMRG, established in 2022, was created to consolidate China’s steel mills under a single buyer. It also aims to win better prices for the few iron ore mining companies. CMRG and its larger rival BHP have also been involved in difficult negotiations. Sources have confirmed that Chinese steel mills are not allowed to buy certain BHP cargoes. However, other grades of BHP are still being traded. No one of the sources could confirm that CMRG had settled their dispute with Hancock. The third source, however, said that CMRG was now the sole authorized seller of miner's ores in China. Multiple industry sources have confirmed that the West Australia-based company sold regular cargoes in China to clients such as two large traders and a number of steelmakers. Hancock Iron Ore was formed by the merger between Roy Hill and Atlas Iron in July. It has a combined annual production capability of 74,000,000 metric tons. (Reporting and editing by Kim Coghill; Staff Reporting)
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Oil prices remain unchanged as markets focus on US-China trade negotiations
Early trading on Thursday saw oil prices hold on to the majority of gains made in the previous session as investors waited for the U.S. China trade talks scheduled later that day. They were hoping for any signs that the tensions clouding economic growth prospects would ease. Brent crude futures dropped 3 cents or 0.05% to $64.89 per barrel at 0032 GMT. U.S. West Texas Intermediate Crude futures declined 11 cents or 0.18% to $60.37. On the sidelines the Asia-Pacific Economic Cooperation summit (APEC), U.S. president Donald Trump and Chinese president Xi Jinping are scheduled to meet in Busan, South Korea on Thursday. The markets hope that they will reach an agreement to reduce trade tensions, which have hurt global growth prospects and fuel demand. Trump said that he expected to reduce U.S. Tariffs on Chinese Goods in exchange for Beijing’s commitment to curtail the flow of precursor chemical to make the drug Fentanyl. In line with expectations on the market, the U.S. Federal Reserve also lowered interest rates Wednesday. The Fed did, however, indicate that this might be the final cut for the year due to the government shutdown. Claudio Galimberti, Rystad's chief economist, said that the Fed's move reflects a wider shift in its policy cycle. It favours reflation over restraint and supports commodities that are sensitive to economic activity. Brent and WTI both rose by 52 cents each in the previous session, on the back of optimism over the trade negotiations and a bigger than expected decline in U.S. fuel and crude inventories. The EIA reported that crude inventories fell by 6.86m barrels, to 416m barrels for the week ending October 24. This was a far cry from the 211,000 barrels analysts had predicted in a survey. (Reporting Colleen Waye; Editing Kim Coghill).
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Asia stock markets fall as Fed cuts, BOJ meeting and Trump-Xi in view
Asian stocks were up and down early on Thursday, as investors watched to see if U.S. leaders and Chinese leaders would reach a deal. MSCI's broadest Asia-Pacific index outside Japan traded flat last, while U.S. S&P500 e-minis futures edged up 0.1% after Wall Street stocks posted a small loss to end a four-day streak of gains. As the Trump administration in the United States imposes tariffs on imports from abroad, global markets are undergoing a series of central bank decisions. These will provide clues as to the future path of interest rates. Trump will meet with Chinese leader Xi Jinping later today in South Korea. U.S. negotiators are signaling that they want to return to the fragile truce in the trade war, but tensions still remain high. Long-term economic irritations will continue between geopolitical competitors. Sally Auld is the chief economist of the National Australia Bank, Sydney, in a podcast. She said that after a lot of activity in the first two days of the week, the central banking story will probably end with a whimper over the next 24 to 48 hours. The Nikkei opened down 0.1%, in anticipation of the Bank of Japan's decision later today. It is widely expected that the central bank will keep interest rates unchanged. The U.S. Dollar was unchanged against the yen at 152.70 yen last after comments by U.S. Treasury Sec. Scott Bessent, who called for faster rate increases to avoid a currency that is too weak. Analysts said this may have an impact on the BOJ communication about the pace of future rate hikes. Fed Chair Jerome Powell said that policymakers will likely become more cautious in the absence of additional job and inflation data. The traders have reduced their predictions of a rate cut of 25 basis points next month. This was viewed earlier as near certainty. Fed funds futures imply that the Fed is likely to hold rates during its next meeting, on December 10. This compares with the 9.1% chance it had yesterday. The yield on a 10-year Treasury bond in the United States was trading at a high of 4.0757% last week, an increase of 1.77 basis points from the previous close of 4,058%. The dollar index (which measures the strength of the greenback against a basket six currencies) reached a new two-week high at 99.131. Gold rose 0.4% to $3,944.25 an ounce. The euro last remained unchanged at $1.16035, ahead of the policy decision made by the European Central Bank in the afternoon. It is expected that the bank will leave rates at the same level for the third time in a line. Investors are also becoming more anxious about the costs of AI development, despite the fact that the U.S. appears to be in good health. This is putting pressure on the tech megacap stocks, which account for the largest weighting in S&P 500 Index. Meta forecast on Wednesday "significantly larger" capital expenditures next year, as its revenues exceeded market expectations. Microsoft's spending for artificial intelligence infrastructure reached a record high of almost $35 billion during the third quarter. Both companies' shares fell. Alphabet, the parent company of Google, a rival tech giant, bucked this trend. Its shares rose in after-hours trade after exceeding revenue expectations. Brent crude oil was unchanged on the energy markets at $64.92 a barrel.
Oil prices rise as fears of oversupply ease after OPEC+ restricts production increase
Investors brushed aside fears of oversupply on Wednesday, after digesting a decision by OPEC+ earlier to limit production increases in the coming month.
Brent crude futures were up 48 cents or 0.7% to $65.93 per barrel at 0400 GMT. U.S. West Texas Intermediate Crude climbed 51 cents or 0.8% to $62.24.
The benchmarks settled broadly flat in the previous session as investors weighed signs of a supply glut against a smaller-than-expected increase to November output from the Organization of the Petroleum Exporting Countries and affiliates.
The market is stuck in limbo. One side believes there will be a glut of supply, while the other believes that the ramp-up won't happen as quickly as expected," said Emril jamil, a senior researcher at LSEG Oil Research.
Jamil said that traders have been betting on the price of crude oil to rise and are currently holding long positions or bets. This is due to continued efforts by Russia's government to reduce its crude exports.
OPEC+ chose to increase production by 137,000 barrels a week, the lowest of the options discussed over the weekend.
Investors are likely to discount production increases until the physical market softens via increasing inventories. This was the conclusion of ANZ analysts on Wednesday.
The analysts at ANZ said that the price gains were capped by the easing of fears about Russian supply disruption. Crude oil shipments have been close to a 16 month high in the last four weeks.
Investors will also be waiting for the Energy Information Administration to release U.S. inventories later on Wednesday.
According to American Petroleum Institute sources, U.S. crude stockpiles rose by 2.78 millions barrels during the week ending October 3, according to figures released on Tuesday.
The API data showed that gasoline and distillate stocks fell.
The EIA reported on Tuesday that the U.S. is expected to surpass its previous expectations in terms of oil production this year. (Reporting and editing by Christopher Cushing, Christian Schmollinger, and Jeslyn Lerh)
(source: Reuters)