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Gold drops below $4,000 an ounce due to US-China trade progress, which has cooled demand for safe-haven assets
On Monday, gold prices dropped below $4,000 an ounce as signs of a thawing in U.S.-China trade tensions reduced the safe-haven appeal of bullion. Market participants were awaiting this week's Federal Reserve interest rate decision. At 10:13 am, spot gold was down by 2.6% to $4,005.11 an ounce. After briefly dropping below $4,000 an ounce earlier in the day, gold prices fell to $4,005.11 per ounce at 10:13 a.m. ET (1413 GMT). U.S. Gold futures for delivery in December were down 2.9% to $4,019.00. Jeffrey Christian, managing partner of CPM Group, said that in addition to technical sales, gold prices are "continuing to decline due to a easing of trade tensions" which had driven the price of gold from $3,800 up to $4,400 during the first three week of October. Gold, the traditional safe-haven, reached a record of $4,381.21/oz in October 20. However, it fell 3.2% after hints that trade tensions would be eased between the two world's largest economies. On Sunday, U.S.-China negotiators outlined the basic framework of a deal that would halt the steeper American tariffs as well as Chinese controls on rare earths exports. On Thursday, Donald Trump of the United States and Xi Jinping of China are expected to continue their discussions on a possible trade agreement. The market expects that the Fed will reduce the rate by a quarter of a basis point at its meeting on Wednesday. As gold is a non-yielding investment, it typically performs very well in an environment of low interest rates. Analysts and investors expect the yellow metal to reach new heights, possibly even $5,000/oz, but some remain sceptical of the long-term sustainability of this recent massive rise. Capital Economics analysts lowered their gold forecast on Monday to $3,500/oz by the end of 2026. Silver spot fell by 3.8%, to 46.65 cents per ounce. Platinum fell 1.1%, to 1,588.86 dollars, and palladium dropped 1.3%, to 1,409.47 dollars. (Reporting from Anjana Anil in Bengaluru and Pablo Sinha). Mark Potter edited the article.
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The Russian rouble gains against the dollar before tax payment day
On Monday, the Russian rouble gained against the U.S. Dollar and the Chinese yuan ahead of corporate tax payments on the day before exporters convert their forex earnings into Russian roubles. By 1315 GMT the rouble had risen 0.6% to 79.24 dollars in the over-the counter market, and 0.5% to 11.09 yuan at the Moscow Stock Exchange where the Chinese currency is the most actively traded. The rouble also received support after the central bank decided to increase its key interest rate last week by a symbolic amount of 50 basis points, to 16.5%. This was high enough to keep rouble-denominated investments attractive. Maxim Timoshenko, Russian Standard Bank, said that the peak tax payments as well as the increased demand from exporters for rouble liquidity are traditionally in favor of the rouble. He added that "in the short-term, the rouble could be supported by the Russian regulator's decision regarding the key rate of interest, which, even after a 0.5% decrease, is still high. This, coupled with a pretty strict signal from regulator," would support the rouble. Some traders who refused to identify themselves said that the repatriation by Russian oil companies Rosneft, and Lukoil of their foreign currency in advance of the new U.S. sanction against them, which takes effect on November 21 also helped support the rouble. (Reporting and editing by Alexander Smith; Gleb Bryanski)
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Automakers join forces with EV manufacturers to avoid EU emission fines
Automakers formed alliances with electric vehicle companies to avoid heavy fines from the European Union for carbon emissions. Several legacy automakers could face fines, as the transition from ICEs to EVs has been slower than expected. As of Monday, here are the details on the regulations and alliances that will be in place for 2025. Initial EU fines were based on carbon emissions levels in 2025. The European Commission, under pressure from the automakers, allowed compliance in March based on average emissions between 2025 and 2027. All alliance agreements currently in existence, as identified by their pool managers, will expire this year. It is expected that they will be renewed in the coming years. In October, Japan's Mazda and Changan Mazda Automobile - its 50/50 joint enterprise with Chinese automaker Changan - teamed up. Mazda was also a part of another pool that was set up by Tesla at the start of this year. NISSAN Nissan, the Japanese EV manufacturer, teamed up with BYD in October. KG MOBILITY A second pool was created at the end September by South Korea’s KG Mobility, and Chinese EV manufacturer Xpeng. In January, Tesla, Stellantis and Toyota formed a pool along with Ford, Mazda, Subaru, Leapmotor, a Chinese EV manufacturer, Mazda, and Ford. In March, Japan's Honda & Suzuki joined the pool. MERCEDES In January, this pool included Mercedes, Volvo Car, Polestar, Smart Automobile, and EV manufacturer Polestar. Volvo Car and Polestar both have the backing of China's Geely. Geely Chairman Li Shufu owns a 9.69% share in Mercedes. He is the second largest shareholder of the group after China's BAIC Group. Smart Automobile was formed as a joint venture by Mercedes and Geely. Forecasts of EV According to AlixPartners consultant, EVs accounted for 12% of the total European light vehicles sold last year and will reach 15% in 2019. AlixPartners predicts that their market share will increase to 24% by 2027, and 40% at the end of this decade.
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US-China truce halts tariffs and export restrictions
The shares of U.S. listed rare earth mining companies fell before the bell Monday, after Washington and Beijing agreed on a framework of a trade agreement that could pause the planned U.S. duties and Chinese export controls for critical minerals. This would ease fears of supply disruptions which had boosted this sector in the past year. The rare earths ceasefire marks a pause on one of the most important fronts in U.S.-China tensions over trade. Investors have unwound bets on the U.S. mining industry benefiting from a prolonged trade dispute. Ramaco Resources, NioCorp Developments, and Critical Metals all saw their shares fall by 10%. MP Materials, Trilogy Metals, and USA Rare Earth all fell between 4.7% to 8.3%. China processes over 90% of rare earths in the world. It has recently increased export restrictions, adding new elements to their control list as well as tightening oversight of foreign producers who rely on Chinese material. The U.S. has only one rare earth mine, whereas the U.K. is racing to obtain minerals essential for electric vehicles and advanced manufacturing. Washington's efforts in building a domestic supply chain are far behind China's dominance. The U.S. may have signed equity deals and agreements to secure the supply chain with companies such as Lithium Americas, Lithium Americas, and USA Rare Earth. However, it will take many years before the country can develop a refining and processing capacity that is comparable with Beijing's. Equity deals have nearly quadrupled the shares of MP Materials this year. USA Rare Earth stock has doubled. This reflects investor optimism regarding U.S. attempts to reduce Chinese dependency on a vital material. Donald Trump, the U.S. president, proposed tariffs of 100% on Chinese imports after the latest restrictions. These were to come into effect on November 1. Trump and Chinese president Xi Jinping are expected to review the preliminary agreement later this week, at the Asia-Pacific Economic Cooperation summit (APEC), in Gyeongju.
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Will US sanctions against Russian oil work? Russell
The crude oil market has a common belief that sanctions by the West against Russia's exports have little effect, as the market finds ways to keep the cargoes flowing. It means that new measures will only have a temporary impact on prices. This is due to the fact that the flow of goods and services has been virtually unaffected. It is possible that the same dynamics are at work with President Donald Trump’s latest sanctions announced last week against Russia’s two biggest oil companies, Lukoil, and Rosneft. The two largest producers produce about 5% of all crude oil produced worldwide, or about 5.3 millions barrels per day. They export about 3.5million barrels a day. After the new measures were announced on October 24, Brent futures rose as high as 8.9%, hitting a three-week trading high of $66.78 per barrel. In early Asian trading on Monday, it was unchanged at $66.37. This may seem like a big price increase, but it is still well below the level that would have been reached if the crude oil market had believed that there was a real risk of losing as much as 3 million bpd to the seaborne markets. Oil reached just below $140 per barrel when Russia invaded Ukraine, in February 2022. This was due to the fear of losing Russian exports. It is expected that Russia's oil producers will be able circumvent new sanctions using a dark fleet of tanks and a variety of middlemen, and banking arrangements which avoid U.S. dollar. This is the most likely scenario, as any disruption in Russia's crude oil exports would be limited and short-lived. Does this mean the sanctions were a waste of time? What you want to achieve is what matters most. These latest measures will be ineffective if the goal is to stop Russian oil being exported by cutting of its remaining buyers, China and India. Sanctions may be more effective if the goal is to reduce the revenues Moscow receives from selling its oil but keep Russian barrels on the global market. New sanctions will make it more difficult for China and India to buy Russian oil. They are the two largest buyers of Russian oil. It is likely that they will demand even steeper discounts to continue importing Russian barrels. The cost of shipping Russian crude is also increased by using dark fleets and middlemen trading firms. The cost of shutting out Russian oil companies from the U.S. banking system is also passed on to oil revenues, since money must be routed through shell companies and offshore jurisdictions. DO SANCTIONS REALLY WORK? Western sanctions against Russia have not had much of an impact in convincing President Vladimir Putin to stop his war in Ukraine. They are also unlikely result in a substantial reduction in export volume. They make it difficult for Russia to export crude and the amount of money per barrel received may decrease. This also means that the flow of Russian barrels is likely to change again as some buyers pull out. Reliance Industries in India is a good example. The company runs a 1,24 million bpd complex at Jamnagar on India's West Coast, which produces fuel for the domestic as well as export markets. Reliance said that it would abide by Western Sanctions, meaning it could end its contract of 500,000 bpd with Rosneft. According to commodity analysts Kpler, Reliance is also likely to buy some Russian crude at spot prices. Total imports of Russian crude oil through the Sikka port - which supplies Jamnagar - are expected to reach 591,000 barrels per day in October. The average bpd was 766,000 in the second quarter. However, this is in line with 563,000 in the first. Other buyers will have access to around 500,000 barrels per day of crude if Reliance stops its imports. It is unclear whether India's government-controlled refiners are willing to accept the risk or if Chinese refiners can take on more Russian crude. It will be important to see if Trump can reach trade agreements with India and China and if Russian oil is included in these deals. Both New Delhi and Beijing are likely to want Washington to make significant concessions if they wish for their Russian oil imports be stopped or reduced significantly. The Russian oil will likely continue to flow for now. However, the biggest risk to the market is if it is used as a tool to reshape global trade in the Trump era. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, who is also an author. (Editing by Himani Sakar)
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McGeever: Be wary of the US-China trade "deal"
Before Donald Trump and Xi Jinping meet this week, the United States and China seem to have hammered the framework for a trade agreement. This removes the threat of a collapse in trade between two of the largest economies in the world. The world markets welcomed the news but it is not a game changer. Recall this: Trump posted on Truth Social, on the 11th of June: "Our Deal with China is Done. Final approval will be given by President XI and me." He added that "the Relationship is Excellent!" The deal wasn't done and the relationship wasn't excellent. Beijing, emboldened by this, imposed extra controls on rare-earth exports earlier this month. Washington, in response, threatened to impose 100% tariffs on shipments from China bound for the United States. U.S. Treasury secretary Scott Bessent publicly criticized Li Chenggang, the top Chinese trade negotiator. The two men appeared to have set aside their differences following discussions in Malaysia at the weekend. They agreed to the basics of a preliminary agreement in which China would delay its expanded licensing system for rare earths, and the U.S. would drastically lower its threatened duties on Chinese products. The White House is upbeat while the Chinese are more cautious. How should investors interpret the latest news? 'PERILOUS NEW CHAPTER' A deal that eliminates the worst case scenario of a collapse in U.S. China trade is a good thing. All the evidence, since the 'Liberation Day,' turmoil of April, suggests that if the doomsday scenario is removed, the world will continue to struggle and the markets will melt up on policy stimuli, AI optimism, and solid corporate earnings. Cassandras claim that this is a dangerously complacent viewpoint. Whatever face-saving agreement Trump and Xi reach will only push the problem down the road. Grace Fan, a senior analyst at TS Lombard, warned on Friday that a dangerous new chapter had been opened in geopolitics as well as global trade regardless of the outcome of the Trump-Xi summit. Both sides will be feeling confident, as the stakes are high. Trump is the leader of the world's largest economic, financial, and military superpower. Every single trade agreement he signed this year was in favor of the United States. Xi, meanwhile, has a lot of leverage when it comes to rare earths - the element used in many things, including lithium-ion battery and semiconductors as well as cell phones, LED TVs and electric vehicles. Small but Mighty Rare earths is a complex issue. China produces 90% of all rare earth magnets. According to management consultancy firm IMARC, the value of the rare earths global market is only $12 billion. This figure is at the upper end of estimates and is only a fraction of the $670 billion in bilateral trade between China and the United States last year. These elements are linked to trillions in global economic output. This makes the relatively small market an important part of U.S. China relations. It would be foolish to believe that the temporary lifting of China’s export controls will solve the problem, if this is included in any agreement. Both sides will use the "deal", as an opportunity, to strengthen their weaknesses, to be in a stronger position when tensions rise again. SOMETHING MORE "MONUMENTAL" The International Monetary Fund's and World Bank's annual meetings held in Washington, DC this month were a great opportunity to learn that China is using its rare earths as leverage against the U.S. This signals a more dangerous phase in the geopolitical conflict. Daniel Yergin said, in a panel discussion, that the trust between China and the U.S. has "gone". Goldman Sachs' John Waldron said in a panel discussion that "something more significant" is taking place between the U.S. and China. Many delegates expressed even greater pessimism in private. In the past six months, pessimism has not been a common theme on the financial markets. Stocks in Japan, Australia and South Korea, Britain, France and the U.S. reached all-time records last week. Investors figured that a placeholder' deal was better than nothing at all. You like this column? Open Interest (ROI) is your indispensable source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X.
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Athletes demand climate adaptation fighting back ahead of COP30
The climate change is the biggest enemy facing athletes, says Brazilian soccer player TamiresDias. She's one of 40 elite athletes involved in a global campaign to be launched at the COP30 summit next month in her country. Dias has played in two Women's World Cups. She is joined by tennis players Beatriz Haddad-Maia and Maya Gabeira from Brazil, Romanian Olympic swimmer David Popovici, and Raheem sterling, a former England soccer player, to support Adapt2Win. The Gates Foundation, Wellcome Trust and the global multi-media campaign launched on January 1st urges governments to prioritize investment in climate adaptation before the COP30. Dias, 38 years old, describes the difficulties of playing soccer in Brazil where extreme heat and damaging rainfalls are a challenge. He says that adapting to climate changes is no longer an option. "In sports, we have to learn to adapt to different teams, tactics and opponents every day. Climate change is an entirely different opponent. "It's more powerful, unpredictable and no one is able to face it alone", she said. Forty athletes signed an Open Letter, while a film highlighting the devastating impact of fires and floods on sporting venues will be shown at COP30 next month in Belem. The film begins with the caption: 'This can either be history's worst defeat or its greatest comeback.' According to the campaign organizers, climate related disasters will cause $417 billion worth of economic losses by 2024. Yet, less than 10% global climate finance goes towards adaptation. Sterling, a Jamaican-born player who has represented England 82 times, said: "This is personal to me." "I've witnessed how climate change has reshaped life in the Caribbean. Through the work of my foundation on mosquito-borne diseases prevention, I have seen how simple solutions, led by communities, can make a big difference. The COP30 presents an opportunity for leaders to support these solutions." The campaign highlights the grassroots efforts that are already underway in Kenya, for example, SMS drought alerts and heat-resistant maternal healthcare in Sierra Leone. "Adapt2Win reminds me that all sectors, from government to business, to sports have a part to play in creating a change", Ana Toni said, CEO of COP30's Presidency. The list of signatories also includes South Africa rugby player Bongi Mobambi, Nigerian soccer player Kenneth Omeruo, and American sailor Mike Buckley. Growing up in Nigeria you could always rely on the seasons - when it would rain, when the crops would turn green. In recent years, however, things have changed," Omeruo said. He has 69 caps for Nigeria and was a member of the African Cup of Nations-winning squad in 2013. The weather is unpredictable. Communities are in trouble. Even the football fields we used to train on have been flooded or dried up. "We live with climate change every day." Martyn Herrman reports.
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Albemarle divests Ketjen control and Eurecat stakes in deals worth $660 Million
Albemarle announced on Monday that it would sell a 51 percent stake in its Ketjen refining catalyst solution business to KPS Capital Partners and its 50 percent interest in Eurecat to France's Axens SA in deals valued at approximately $660 million. Albemarle said that proceeds from the sale of lithium would be used to reduce debt and for general corporate purposes. This is part of Albemarle's efforts to increase financial flexibility and focus on its lithium and bromine core units. Albemarle has been attempting to reduce its portfolio in response to the recent drop in lithium prices, which has impacted earnings and cash flows. Albemarle has said that once the transaction is closed in the first half 2026, it will retain a 49 percent minority stake in Ketjen, and the full ownership of the Performance Catalyst Solutions division, which includes the PCS plant located in Pasadena. KPS, which has more than 19 billion dollars in assets under management, will use its manufacturing expertise to expand Ketjen’s global refining catalyst operations and increase profitability.
Gold falls on optimism about trade deals, but stocks rise
Investors were encouraged by signs that trade tensions have cooled between the U.S. and China. This marked a positive start to a busy week of central bank meetings, megacap earnings, and other events.
On Sunday, top Chinese and U.S. economists hammered out the framework for a trade agreement that U.S. president Donald Trump and his Chinese equivalent Xi Jinping will decide on this week during a meeting in South Korea.
Investors are less concerned about the possibility of a break in the trade truce between China and the United States if a deal is reached.
The STOXX600 index rose by 0.1%, bringing it to record highs. This was a modest rise, but the stock markets in Asia rallied strongly, and this led European shares to rise.
US STOCK FUTURES - JUMP
Investors will be looking for confirmation that the current trade truce is still in place and that China’s reform and stimulus signals are translating into a tangible growth momentum, said Charu Chanana. Chief investment strategist at Saxo.
The U.S. Stock Futures indicated a strong rally later. Nasdaq futures gained 1.4%, while those for S&P 500 rose 0.9%.
George Boubouras of K2 Asset Management said that the market is satisfied with the U.S. China momentum of recent days. "Over the last few months, the markets have been observing global tariff negotiations, understanding that some comments can be a little theatre and noise."
The Chinese yuan rose to its highest level in over a month against the dollar of 7,1091.
The People's Bank of China announced the official midpoint dollar rate before the market opened at 7.0881, its highest since October 15, 2024. This was above the estimate of 7.1146.
Derek Halpenny, MUFG's head of research, said that the yuan could see further gains if a deal were to be made based on the details reported today.
He said that investors would be more inclined to look at non-dollar currencies as they have better prospects.
Gold, the safe-haven, fell 2% to $4.028 per ounce. Meanwhile, U.S. Treasury yields rose 2.7 basis points, reaching 4.024%. Commodities such as soybeans, corn, and wheat rose due to trade prospects.
CENTRAL BANK RESULTS ARE AWAIT
This week, investors will be focused on the central bank meetings taking place in Japan, Canada and Europe.
Federal Reserve rates are expected to be cut by 25 basis points, after September data showed that U.S. consumer price increases were slightly lower than expected. However, the impact of the government shutdown on data is still a concern.
The dollar was steady at 152.71yen and hovered near its two-week high. The euro rose 0.15% to 1.1644.
Both the European Central Bank (ECB) and Bank of Japan (BoJ) are expected to keep rates unchanged this week.
As concerns about a recession caused by tariffs ease, the BOJ will likely debate whether it is time to resume rate increases. However, political complications could keep this on hold.
Focus on Megacap Earnings
This week, the U.S. Earnings Season will be at its busiest. Megacaps like Microsoft, Apple and Alphabet are all expected to release their results.
The profit advantage of "Magnificent 7" companies, whose shares dominate equity indices due to their huge market capitalisations, is shrinking. However, it's still expected that they will post better results this quarter.
Stock market performance has been driven by the enthusiasm of a number of megacap companies in the artificial-intelligence industry.
(source: Reuters)