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Gold reaches a two-week high as weak economic data confirms bets on rate cuts
Gold prices rose nearly 3% Monday, hitting a two-week-high as weak economic data from the United States fueled expectations that the Federal Reserve would cut interest rates. This increased demand for this non-yielding investment. As of 2:21 pm, spot gold rose 2.8% to $4.111.39 an ounce. ET (1921 GMT), after reaching its highest level in more than a month earlier. U.S. Gold Futures for December Delivery rose 2.8%, settling at $4.122.00 an ounce. Peter Grant, senior metals analyst at Zaner Metals and vice president of Zaner Metals, said that "we could still see a rate cut in December" due to the weak data from last week. Last week, data showed that the U.S. economy lost jobs in October. These losses were in the retail and government sectors. Data on Friday also showed that U.S. consumer confidence dropped in early November, as consumers worried about economic fallout. According to CME Group’s FedWatch tool, the markets now expect a rate reduction in December. By January, odds will have risen to 77%. Gold that does not yield tends to perform well in low interest rate environments and times of economic uncertainty. Grant said that gold could be between $4,200 to $4,300 an ounce at the end of this year. $5,000/oz is still a realistic goal for the first quarter next year. The U.S. Senate moved ahead on Sunday on a bill aimed at reopening federal government and ending a shutdown that has now lasted 40 days. In a note, Ole Hansen said that a reopening of the market would bring back data and revive expectations for December rate cuts, but it also shifted the focus to the deteriorating fiscal outlook in the United States. Palladium rose 3.1% to 1,422.79. Platinum rose 2.4% at $1,582.50. (Reporting and editing by Will Dunham, Alan Barona and Noel John in Bengaluru)
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Buffett supports Abel, the CEO-designate; to accelerate donations
Warren Buffett endorsed Greg Abel on Monday, who will succeed him as Berkshire Hathaway chief executive in January. He also said that he would continue to hold a large number of Berkshire Hathaway shares to reassure Berkshire shareholders about the transition. Buffett said Abel "more than exceeded" his expectations, when he initially thought 63-year old Abel was CEO material. Buffett wrote, "I cannot think of anyone else I would choose to manage your and my savings, including a CEO, management consultant, academic, or government official." Buffett will remain Berkshire chairman. Buffett said that he would increase his charitable contributions to the family foundations headed by his daughter Susie and his sons Howard and Peter. He added, however, that this "in no manner reflects a change in my view about Berkshire’s prospects." Buffett donated Berkshire Stock worth more than $1.3 Billion, or the equivalent of 1,800 Class-A shares, to four foundations headed by his children. The trustees will also supervise a charitable trust which will hold nearly all the remaining Buffett wealth when he passes away. If they are unable to serve, potential successor trustees will be named.
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Nigeria's anti-graft agency has issued an arrest warrant for former oil minister Sylva on fraud charges
Nigeria's anticorruption agency announced on Monday that a warrant had been issued to arrest former Petroleum Minister Timipre Slva for allegations of conspiracy and dishonestly converting $14.86million. In a press release, the Economic and Financial Crimes Commission stated that the funds were part an investment made by the Nigerian Content Development and Monitoring Board in Atlantic International Refinery and Petrochemical Ltd to fund a refinery. Anyone with information about Sylva’s location is asked to contact the company’s offices across the country or to report to their nearest police station. Sylva was the former Petroleum Minister of Muhammadu Buhari from 2019 to 2023. The EFCC said that on November 6, a Federal High Court in Lagos had issued an arrest warrant for Sylva, granting it the authority to hold him for questioning. Sylva, the former governor of Bayelsa State, was not available for immediate comment. Justice D.I. Dipeolu instructed law enforcement agencies in order to help bring Sylva to the commission to "answer to the criminal offense he is accused of having committed", according the the court ruling. (Reporting and writing by Tife owolabi, Chijioke ohuocha, Editing by Jan Harvey).
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Gold reaches a two-week high as weak economic data reinforces rate cuts
Gold prices rose more than 2% Monday, reaching a new two-week-high as weak economic data from the United States fueled expectations that the Federal Reserve would cut interest rates. This boosted demand for this non-yielding investment. As of 11:43 am, spot gold rose 2.3% to $4.090.96 an ounce. ET (1643 GMT), after reaching its highest level in the earlier session. U.S. Gold Futures for December Delivery rose 2.2% to $4099.20 an ounce. The market is now more dovish about the Fed's expectations after some weak data from last week. "We could still see a rate cut in December," said Peter Grant. He is vice president and senior strategist for metals at Zaner Metals. Last week, data showed that the U.S. economy lost jobs in October. These losses were in the retail and government sectors. Data on Friday also showed that U.S. consumer confidence dropped in early November, as consumers worried about economic fallout. According to CME Group’s FedWatch tool, the markets now expect a rate reduction in December. By January, odds will have risen to approximately 80%. Gold that does not yield tends to perform well in low interest rate environments and times of economic uncertainty. Grant said that gold could be priced between $4,200-$4,300/oz at the end of this year. $5,000/oz is still a realistic goal for the first quarter next year. The U.S. Senate moved forward with a bill on Sunday to reopen the federal government, ending a 40-day shut down. In a note, Ole Hansen said that a reopening of the market would bring back data and revive expectations for December rate cuts, but it is more important to shift the focus on a deteriorating fiscal outlook in the United States. Palladium rose 2.2% to $1.411.33 and platinum increased 1.5% to 1,568.41. (Reporting from Noel John in Bengaluru and Pablo Sinha; editing by Will Dunham).
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US Energy Secretary says nuclear power will be the biggest user of loan office
The U.S. Energy secretary Chris Wright stated on Monday that the Department of Energy Loan Programs Office would be used most for nuclear power plants. LPO offers hundreds of billions in funding aid including loan guarantees to projects that are unable to obtain bank loans. During the first term of President Donald Trump in the White House he only used the LPO to finance reactors at Vogtle Nuclear Power Plant in Georgia. Wright said at a conference for the American Nuclear Society that "by far, the most important use of these dollars will be to build the first nuclear power plants." There are currently no commercial nuclear reactors in the United States, although several plan to reverse their permanent shut down status and open up again. Other plans include building new large and smaller reactors. Wright said that the electricity demand for artificial intelligence and data centres will generate billions of dollars in equity capital from "very reliable providers." Wright stated that the low-cost loans from the Loan Programs Office will match this financing "three to one or even four to one." (Reporting and editing by Nick Zieminski, Paul Simao, and Timothy Gardner)
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President Botswana says Botswana is taking steps to buy majority stake in De Beers
Botswana has been working to acquire a majority stake of De Beers. This was announced by President Duma Boko on Monday after Angola made a bid for control over the giant diamond firm. Botswana owns 15% of De Beers, and the company contributes 70% of their annual rough diamond production. Despite a global slump in diamond prices, which has hurt its economy, Botswana considers De Beers a strategic asset. Boko said during the State of the Nation address in Gaborone, that diamonds will remain the major contributor to growth. Boko, without revealing any further details, said that "concrete steps are being taken in order to acquire Anglo American's share in De Beers." On November 7, the mining ministers from Botswana, Angola and South Africa met in Botswana’s capital amid fears of a possible standoff between their regional allies over De Beers. Angola's Mines Ministry said that although Gaborone did not mention the rival bids, the two ministers had discussed the acquisition of shares in De Beers. However, they didn't provide any further details. Anglo American, who owns 85% De Beers shares, sells its entire stake in order to focus primarily on the clean-energy metal, copper. De Beers is valued at $4.9 billion by the global giant.
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Vettel is open to a future F1 role in the motor racing-climate campaign
Sebastian Vettel, the retired Formula One world champion, said that he was open to taking on a new sport role as long as it had meaning. The German spoke at the Sao Paulo Grand Prix, where he raised climate awareness. He won four titles for Red Bull, and his last race was with Aston Martin 2022. "Why not? If it's well-spent time, there's a human element, it's challenging, and I enjoy it, why not?" He said this at Interlagos without giving any details or examples. "There must be a reason." I don't just want to come here to make money. I'm not here to be just here. It would be wrong and not me. "Maybe this is a new position... I don't really know. "I'm not going to knock on doors and ask, 'Look can you hire me for this or that?' The 38-year old added. Max Verstappen, Red Bull’s four-time champion and former racer Helmut Marko's longtime advisor and consultant, said in June that he would be happy to welcome Vettel back. Vettel, who was the youngest champion ever at Red Bull with 23 in 2010, has focused on environmental initiatives. He attended Prince William's Earthshot Prize leading up to the COP30 Climate Summit in Brazil. Vettel acknowledged the apparent conflict between Formula One and climate change, as the sport has 24 races across the globe and involves significant air travel. He said that solutions like synthetic fuel, the sport’s 2030 net-zero carbon emissions quest and sustainable travel must be targeted. "If Formula One is able to lead the way in this change, not only does it have a future, but also a purpose to demonstrate to others, 'come, do the same,'" he said. Vettel has said that he regrets nothing about ending his career as a driver. "It was a privilege that I chose when to stop. "I made that choice, and I do not regret it," said he. "But I hope I'll still be around a long time, and there's enough time to try new things and continue learning." (Reporting and editing by Christian Radnedge.)
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Guinea's mines minister announces a rapid alumina and iron ore processing.
Guinea's mines minister has told reporters that the country will accelerate the development of iron ore pellet and alumina refineries to stop decades of raw ore shipments. The first shipments of iron ore from the huge Simandou mine are expected this week. The World Bank stated in July that alumina and ore processing within Guinea could be a game changer for the country's economy, creating industrial jobs while reducing Guinea's exposure to swings in commodity prices. Guinea exports about 60% of its bauxite to China as a feedstock, and a third is iron ore from the Simandou Mine, which is shipped to Chinese mills. Conakry signed a deal to build its first alumina refining plant with the Chinese state-owned SPIC. Construction is underway, and completion is expected by 2027. He said that talks for new plants have advanced with Chinalco, France's Alteo and are ongoing with Compagnie des Bauxites de Guinee, Alcoa and Compagnie des Bauxites de Guinee. Sylla stated, "We are now the largest bauxite producers in the world... but no refineries have been built since colonial days." "That will soon change." GUINEA PLANS SIX REFINERIES BY 2020 Guinea has joined a number of mineral-rich African nations, from oil driller Nigeria to gold producer Mali, that have been pushing to increase domestic refining capacities in recent years. This is a key step to maximising profits, increasing economic growth, and reducing expensive imports. Sylla stated that the country plans to install between five and six alumina refining plants by 2030. This will increase domestic processing capacity to approximately 7 million metric tonnes annually. According to the Minister, the West African nation revoked in August the bauxite contract awarded to an Emirates Global Aluminium unit after it failed to build the alumina refinery that was promised locally. EGA didn't immediately respond to an inquiry for comment. Allison Ju, of SMM, said that China's alumina project in Guinea will not reduce its dependency on Guinea as the exports would simply switch from bauxite to alumina. Guinean bauxite is low in silica, and suitable for low-temperature refinement. It accounts for 25% of the global aluminium production. GUINEA TARGETS IRON ORE MANUFACTURING ALSO Sylla stated that Guinea wants to process iron ore at home, in addition to alumina. Sylla stated that current agreements require Rio Tinto, Winning Consortium Simandou and the Simandou joint development company to study and construct a 500,000 ton steel plant or 2 million ton pellet facility. Djiba Dikite, Chief of Staff to the President, stated that partners are required to submit feasibility studies within two years after first exports. If the Guineans fail in their study, they can hire an international firm to do it at the expense Compagnie du Transguineen - the joint venture that manages Simandou's port and rail services. Sylla stated, "We are confident that we have determined the minimum capacity to design this facility based on sound financial principles." Rio Tinto’s Simfer venture which operates a part of the Simandou Project has committed to a feasibility study for a pellet factory in order to understand the viability and the options available. A Rio Tinto spokesperson said on Monday. WCS didn't immediately respond to an inquiry for comment. The proximity of Guinea to Europe and America gives it an advantage in logistics over Middle Eastern hubs. Sylla added that pellets and direct-reduced iron for green steel were the preferred paths. Sylla acknowledged that energy remains Guinea's biggest obstacle, but said the country is pursuing hydro, solar, and liquefied gas investments. This includes a U.S. backed plan to import LNG as fuel for power plants. (Reporting and editing by Clara Denina, Jan Harvey and Maxwell Akalaare Adombila)
Stocks and US Treasury yields increase on the hope of a reopening US government
MSCI's global equity index rose on Monday, while government bond yields increased on bets the U.S. shutdown would soon end. This will allow the release of official economic data to resume.
On Sunday, the U.S. Senate advanced a measure that would end the shutdown. The shutdown is now in its fourth day and has caused federal workers to be unable to work, food aid delays, air travel problems, and the halting of economic data released by the government. Kevin Hassett, White House economist, had said earlier that day in an interview that the fourth-quarter Gross Domestic Product could be negative if there was a shutdown.
The House of Representatives must approve the bill if the Senate passes it. This would fund the federal government until the end of January and include three appropriations bills for the entire year. S&P 500 ended slightly higher Friday, on the back of signs of progress from Washington. The S&P 500 had fallen earlier in the morning following a report that U.S. Consumer Sentiment slumped to an almost 3-1/2 year low due to fears about the economic fallout.
Robert Pavlik said that there is a greater willingness to accept additional risk, because the possibility of reopening the government this week has increased. Right now, it's more of a relief rally.
Pavlik stated that investors are concerned about anecdotal evidence "people staying at home and not spending much", and they are eager for the return of official economic reports to provide "hard evidence."
He said that investors were increasingly focused on valuations.
As of 12:37 pm on
Wall Street
The Dow Jones Industrial Average
The rise in the 147.51 point
47,134.61
The S&P 500 is a measure of the S&P 500 index.
Rose 71.35 point
6,800.15
The Nasdaq Composite Index
Rose 405.28 points
23,409.82
MSCI's global stock index
.MIWD00000PUS
The rise was 10.74 points
1 002,06 yen
The pan-European STOXX® 600 index is a
.STOXX
Index gained 1.4%.
The non-government data released last week stoked concerns about a weakening U.S. labour market. However, Federal Reserve officials have reiterated that they prefer to be cautious with further rate reductions. According to CME Group’s FedWatch tool, traders are pricing in an approximately 63% chance that the central banks will reduce rates by 25 basis point next month. Fed Governor Stephen Miran stated Monday that a rate cut of 50 basis points would be appropriate in December. He noted that the inflation rate is declining while the unemployment rate has been rising. St. Louis Federal Reserve president Alberto Musalem, however, said that the Fed should tread carefully when it comes to further rate cuts, as inflation is close to 3%, compared to the Fed's goal of 2%, and the unemployment rate is rising.
U.S. Treasury
Prices fell and yields increased as investors preferred riskier assets in anticipation of an end to government shutdown.
The yield on benchmark U.S. 10 year notes
US10YT=RR
The underlying rate of inflation rose by 1.9 basis points, to
From %
Late on %
On Friday, t
The 30-year bond
US30YT=RR
>> Yield
The 0.7 basis point rise to
4.7083
The 2-year Note
US2YT=RR
The yield is a measure of the Fed's interest rate expectations.
The basis point increase was 3.4 basis points.
From %
Risk-sensitive
currencies
The Australian dollar, for example, rose against the U.S. dollar, as the risk sentiment was boosted following signs that the U.S. Government is getting closer to reopening.
The Australian Dollar
Strengthened 0.55%
The dollar rose 0.33% against the Japanese yen to 153.91.
Safe-haven
The dollar index rose to its highest level since two weeks, as the weak U.S. economy data encouraged rate cuts and a weaker dollar provided support.
Spot gold
The rise in 2.42%
4,095.42
An ounce. U.S. Gold Futures
The price of roses 2.39%
4,095.00
One ounce.
Investors assessed the reopening of the U.S. Government and concerns about oversupply in the crude oil market.
U.S. crude
The price of the e-book rose by 0.05%.
A barrel of Brent
Roses
Per barrel
Up 0.13%
On the day. (Reporting and editing by Kim Coghill and Dhara Ranasinghe)
(source: Reuters)