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Gold remains flat as higher yields offset the weak dollar in advance of US inflation.
Investors are awaiting important inflation data to get a sense of the Federal Reserve's direction ahead of the meeting next week. As of 0358 GMT, spot gold remained at $4208.46 an ounce and was on course for a weekly decline of 0.5%. U.S. Gold Futures for December Delivery fell 0.1% to $4.237.70 an ounce. The benchmark 10-year U.S. Treasury Yields were near their highest levels in over two weeks. Meanwhile, the dollar was not far off its five-week low compared to other major currencies, making gold attractive for overseas buyers. The market is waiting to see what the Fed will do. (Gold) is consolidating, after a short run in November. But the trend for the future looks positive," said Kunal Sha, Nirmal Bang Commodities' head of research. Shah also said that the higher Treasury yields are also contributing to the pressure on gold prices. Data from the United States showed that jobless claims dropped to 191,000 in the last week. This is the lowest level for more than three-years and far below the 220,000 expected. ADP data revealed on Wednesday that private payrolls dropped by 32,000 during November, which is the largest drop in more than two and a quarter years. More than 100 economists surveyed by predicted that the Fed would reduce its key rate by 25 basis point at its meeting on December 9-10, in order to support a cooling labour market. Gold is a non-yielding asset that tends to be favoured by lower interest rates. Investors await the September Personal Consumption Expenditures Index (PCE), the Fed's preferred measure of inflation, which is due at 1500 GMT. Silver gained 0.5%, to $57.40 an ounce after Wednesday's record-high of $58.98. It was on course for a week-long gain. Palladium rose 0.9% to 1,461.67, but it was still expected to finish the week on a higher note. Platinum fell 0.4% to $1640.25. (Reporting and editing by Sumana Feast, Lincoln Feast, and Ishaan arora in Bengaluru)
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Citi raises its price forecast, and copper prices soar to record levels
The price of copper reached a new record on Friday after Citi raised its outlook for the metal. Supply concerns and the expectation that the U.S. Federal Reserve will cut interest rates next week are driving the market. As of 0330 GMT the most active copper contract at the Shanghai Futures Exchange had risen 1.18%, to 91.860 yuan (12,992.56) a metric ton, after reaching an all-time peak of 92,000 dollars a ton during the session. Shanghai copper will end the week at a 5.3% higher price. The benchmark copper for three months on the London Metal Exchange gained 0.95%, to $11,558.5 per ton. It had previously reached a high of $11,581.5. The London copper price is expected to finish the week with a gain of 3.28%. Citi analysts expect copper prices will continue to climb into the first quarter of next year, and reach an average of $13,000 per ton in the second quarter 2026. This is up from their October outlook at $12,000, while their bull case has risen to $15,000, from $14,000. The bank said that prices would remain supported by macrofunds as investors prepare for a soft U.S. economy landing. They also noted a growing supply shortage as the mine supply does not keep up with demand due to energy transition and artificial intelligence. The bank said that additional tightening is expected due to the U.S. stockpiling in relation to COMEX and LME arbitrage. Reports on Thursday indicated that Mercuria, a commodity trader, was responsible for the removal of more than 40,000 tons of copper earlier this week from warehouses registered with LME. According to the data released by the LME on Thursday, copper continued to flow from warehouses registered with LME in Asia. Copper stocks in other countries have been kept low by the fact that a large amount of copper removed from the LME sheds was shipped to the U.S. where prices are still high due to tariff concerns. Copper prices were also lifted by the expectation of a Fed rate reduction next week. Aluminium, zinc, lead, and nickel all saw declines. Tin also fell by 0.43%. Aluminium, among other LME metals gained 0.09%, while zinc grew 0.32%. Lead CMPB3> climbed 0.17%, while nickel fell 0.28%, and tin dropped 0.74%. Friday, December 5, DATA/EVENTS - (GMT) 0700 Germany Industrial orders MM Oct 0700 Germany Manufacturing O/P Cur Price SA October 0700 Germany Consumer Goods SA
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Improved supply and soft Chinese demand set to lead to weekly iron ore losses
Dalian iron-ore futures prices fell on Friday, and are on course for weekly losses as a result of rising seaborne shipments at year's end and tepid Chinese interest. As of 0320 GMT, the most-traded contract for January iron ore on China's Dalian Commodity Exchange was trading 1.01% lower. It was 785.5 Yuan ($111.11), per metric ton. The contract will end the week at a loss of 0.88%. The benchmark January Iron Ore at the Singapore Exchange fell 1.02% to $103.2 per ton. However, it is still on track to finish the week with a 1.43% increase. Iron ore shipments are expected to rise near year's end, and the supply of the material in China, the top consumer, will be further loosen in December, with an increase in the number of carriers arriving, while the demand for steelmaking materials is likely to fall amid the production cuts in steel mills. This was noted by consultancy Mysteel. In November, the top Brazilian producer shipped nearly 34.5 millions tons of grain by sea. This was an increase of 2.93% on a year-on-year basis. Mysteel said that positive macroeconomic signals as well as anticipated restocking demands among steelmakers would lend some support. We see the iron ore markets in a surplus this year, and we see this surplus growing over the next couple of years. Analysts from Citi said that with Simandou online, and China's steel production on a structural decrease, prices will trade on fundamentals in the future and tend closer to costs. Simandou's iron ore project will be the largest iron ore mine in the world, and the key to greening the global steel value chains, with a production capacity of 120 million metric tonnes per year. Coking coal and coke, which are both steelmaking ingredients, have also lost ground. They fell by 0.31% and 0.51% respectively. All steel benchmarks at the Shanghai Futures Exchange increased. The benchmarks for steel on the Shanghai Futures Exchange all increased.
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The Fed is hoping to boost the market and Venezuela tensions are looming. Oil prices will rise by 2% this week.
By Colleen Waye WTI oil was heading for a weekly gain of nearly 2% on early Friday trading, supported by escalating U.S. - Venezuela tensions, and stalled Moscow peace talks. This would be the second week in a row of increases. Brent crude was up 6 cents or 0.09% at $63.32 a barrel at the market opening on Friday. U.S. West Texas Intermediate rose 4 cents or 0.07% to $59.71 per barrel. The previous trading session saw both contracts settle up by around 1%. In a survey conducted between November 28 and December 4, 82% of economists expected that the Federal Reserve would reduce interest rates by 25 basis points at its policy meeting next week. A rate reduction would boost economic growth and oil demand. The markets continued to prepare for a possible U.S. invasion of Venezuela, after President Donald Trump announced late last week that he would begin taking action "very soon" to stop Venezuelan drug smugglers on land. Rystad Energy stated in a report that such an action could threaten Venezuela's crude oil production of 1.1 million barrels each day, which is mainly supplied to China. The prices were also lifted this week due to the failure of the U.S. negotiations in Moscow to reach any significant breakthroughs in the war in Ukraine. This could have included an agreement to allow Russian oil to return to the market. These factors helped to keep prices stable despite an increasing surplus. Saudi Arabia has cut its January Arab Light crude prices to Asia, to the lowest levels in five years due to an oversupply. This was revealed by a document that was reviewed on Thursday.
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Putin will hold a summit meeting with Modi in Delhi
On Friday, Russian President Vladimir Putin and Prime Minister Narendra modi will meet in New Delhi to discuss ways to increase trade between the two countries. Western sanctions are affecting their long-standing relationship. Putin's first India visit in four years comes at a moment when New Delhi and the U.S. are in negotiations for a deal that will reduce punitive tariffs placed by Donald Trump on India's goods because of its Russian oil purchases. Moscow has been India’s largest arms supplier for decades. It has stated that it would like to import more Indian products in order to increase trade to $100 billion in 2030. Trade has so far been heavily skewed to Moscow's advantage due to New Delhi’s energy imports. India has increased its purchases of Russian crude oil at discounted prices since European countries reduced their dependence on Russian energy following the Russian invasion of Ukraine four years ago. Michael Kugelman wrote this week in Foreign Policy Magazine that "India faces a dilemma. By taking steps to improve ties with either Moscow or Washington, New Delhi runs the risk of reversing ties with one." Modi and Putin will also discuss other topics, including civil nuclear energy and labour. Both sides are expected to announce new deals to demonstrate the resilience of their relationship. Hugs and handshakes After arriving in an airport near New Delhi, India's leader greeted Putin with a handshake and a hug as he walked along the red carpet. The visit was scheduled to last two days. Modi hosted Putin for a private meal at his residence. Andrei Belousov - the Russian defence minister - met with Rajnath Singh, his Indian counterpart, on Thursday. India's Defence Ministry said that Belousov had "stated the Russian defence industry was ready to assist India in becoming self-reliant on the production of defence products," after the meeting. Putin arrived in India one day after he held talks with Trump's top representatives on a potential peace deal for the end of the war in Ukraine. However, they failed to reach a consensus. India has refused to condemn Russia for the war, and instead called for peace through dialogue and diplomacy. It also said that Western nations unfairly target its ties with Moscow because they continue to do business in Moscow even when it's not in their best interest. Reporting by Shivam Patel, Editing by Peter Graff
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Dollar and global shares rise as markets anticipate Fed rate cuts
The dollar and global shares were mostly up on Thursday as traders awaited a Fed rate cut. U.S. stock prices ended mostly higher after a choppy session. The benchmark S&P and Nasdaq gained, while the Dow finished slightly lower. Consumer staples and healthcare stocks, as well as materials, suffered the biggest losses. Industrials, technology, and communications services, however, saw gains. The Dow Jones Industrial Average dropped 0.07%. The S&P 500 rose by 0.11%. And the Nasdaq Composite increased by 0.22%. STOXX 600 in Europe was up 0.45%, and is still on track for a modest gain each week. The FTSE 100 in London was up 0.19%, while the DAX in Germany gained 0.32%. MSCI's global stock index rose by 0.24%. Japanese stocks rose sharply following an auction of government debt that attracted strong demand from investors. This helped set the tone for a broader equity market. The Nikkei rose 2.33%. After a 5% drop in stocks in late November, they have recovered and are trading near their all-time highs, said Michael Farr, CEO of investment advisory firm Farr, Miller & Washington, in Washington. On Thursday, data appeared to allay fears of a rapid deterioration of the U.S. labour market. Last week, the number of Americans who filed new claims for unemployment benefits dropped to a three-year low. The number of Americans filing new applications for unemployment benefits fell to a more than three-year low last week, at 191,000. This came after the U.S. Private Payrolls Data posted its largest drop in over two-and-a half years and following a service sector survey that showed activity remained steady in November despite hiring slowing. Markets may be disappointed if they reduce rates by a quarter point, then pause. This is what every Fed speaker said. Farr added that if they do not cut rates and instead say we will wait until the next Fed meeting, then markets would be disappointed. Fed funds futures have a 90% probability of a quarter point cut at the Fed's meeting on December 10. This is up from an 83.4% possibility a week earlier, according to CME Group's FedWatch. The dollar index (which tracks the U.S.'s currency performance against six other currencies) was slightly up by 0.17%, easing previous losses and poised for an end to nine consecutive sessions of declines. Brent crude futures rose 0.94%, to $63.26. U.S. crude, however, gained 1.22%, to $59.67. US 10-YEAR BOND YIELD IS UP The yield of the 10-year Treasury Bond in the United States was up by 4.2 basis points to 4.1%. The Financial Times reported that on Wednesday, bond investors expressed concern to the U.S. Treasury about Kevin Hassett's potential to aggressively reduce interest rates in order to match President Donald Trump’s preferences. Farr stated that the Trump administration had chosen to announce the President's choice of a new Fed Chairman in a way that would be perceived - whether correctly or incorrectly - as more dovish during this meeting, to appear to be an antidote for the message. The government debt sale in Japan attracted the highest demand for more than six year, helping to calm investor nerves over the long-term financial health of the country, which has stoked fears about similar concerns about other economies. Dollar was down by 0.08% to 155.11 yen, heading towards its biggest weekly gain in two months. The yen was given a boost by a report that said the Bank of Japan would likely raise interest rates this December, and the government is expected to tolerate the decision. In Hong Kong, offshore trading, the yuan weakened a bit, resulting in a dollar gain of 0.21%, or 7.071 yuan. On Wednesday, the Chinese currency reached its highest level in over a year against the dollar. After a recent run of hot metals, precious metals have cooled. After hitting a record-high of $58.98 an ounce on Tuesday, gold was unchanged at $4,208.66 per ounce. Silver fell by 2.32% to reach $57.12 per ounce.
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Dollar and global shares rise as markets anticipate Fed rate cuts
The dollar and global shares were mostly up on Thursday as traders awaited a Fed rate cut. Wall Street stocks, however, were mostly flat following a series of economic reports. After two sessions of gains in the U.S., stocks fell after choppy trading. The benchmark S&P 500 was down. Consumer discretionary, healthcare and consumer staples stocks suffered the greatest losses. Industrials, communications and energy advanced. The Dow Jones Industrial Average dropped 0.19%. The S&P 500 fell 0.10%. And the Nasdaq Composite declined 0.03%. STOXX 600 in Europe was up 0.45%, and is still on track for a modest gain each week. The FTSE 100 index in London was up 0.19%, while the DAX index in Germany gained 0.32%. MSCI's global stock index rose by 0.23%. Japanese stocks rose sharply following an auction of government debt that attracted strong demand from investors. This helped set the tone for broader equity markets. The Nikkei rose 2.33%. Michael Farr, CEO of investment advisory firm Farr, Miller & Washington, said that after a 5% drop in stocks in late November, they have recovered and are trading near their all-time highs. On Thursday, data appeared to allay fears of a rapid deterioration of the U.S. labour market. Last week, the number of Americans who filed new claims for unemployment benefits dropped to a three-year low. The number of Americans filing new applications for unemployment benefits fell to a more than three-year low last week, at 191,000. This came after the U.S. Private Payrolls Data posted its largest drop in over two-and-a half years and following a service sector survey that showed activity remained steady in November, while hiring slowed. Markets may be disappointed if they reduce rates by a quarter point, then pause. This is what every Fed speaker said. Farr added that if they do not cut rates and instead say we will wait until the next Fed meeting, then markets would be disappointed. Fed funds futures have a 90% probability of a quarter point cut at the Fed's meeting on December 10. This is up from an 83.4% possibility a week earlier, according to CME Group's FedWatch. The dollar index (which tracks the U.S.'s currency performance against six other currencies) was slightly up by 0.08%, easing previous losses and poised for an end to nine consecutive sessions of declines. Brent crude futures rose 0.94%, to $63.26, while U.S. Crude futures climbed 1.22%, to $59.67. US 10-YEAR BOND YIELD IS UP At the last check, the yield on a 10-year Treasury Bond in the United States was up 5.2 basis point at 4.11%. The Financial Times reported that on Wednesday, bond investors expressed concern to the U.S. Treasury about Kevin Hassett's potential to aggressively reduce interest rates in order to align himself with President Donald Trump. Farr stated that the Trump administration had chosen to announce the President's choice of a new Fed Chairman in a way that would be perceived - whether correctly or incorrectly - as more dovish during this meeting, to appear to be an antidote for the message. The government debt sale in Japan attracted the highest demand for more than six-years, helping to calm investor nerves over the long-term finances of the country, which have caused similar concerns about other economies. The dollar last fell 0.16% to 154.97 yen. This is the largest weekly gain for the U.S. currency against the yen in more than two months. The yen was also boosted by a report that said the Bank of Japan would likely raise interest rates next month, with the government tolerating such a move. Three government sources who are familiar with these discussions were cited. In Hong Kong, offshore trading, the yuan weakened a bit, with the dollar gaining 0.17% to 7.069 yuan. On Wednesday, the Chinese currency reached its highest level in over a year against the dollar. After a recent run of hot metals, precious metals have cooled. After hitting a record-high of $58.98 Tuesday, gold was unchanged at $4,207.88 per ounce. Silver fell 2.54%, to $56.98, an ounce. Reporting by Chibuike Oguh and Gregor Stuart Hunter in New York; Editing by Ed Osmond, Lisa Shumaker
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Gold stable as rising yields offset dollar weakening; PCE data is in focus
Gold prices remained largely unchanged Thursday as rising U.S. Treasury rates offset the support provided by a weaker US dollar. Meanwhile, markets were waiting for Friday's U.S. Inflation data to get clues about Federal Reserve policy ahead of their December meeting. By 1833 GMT, spot gold had risen 0.1% to $4210.49 an ounce. U.S. Gold Futures for February closed 0.2% higher, at $4243.00 per ounce. Edward Meir, Marex analyst, said: "Higher yields keep a little cap on gold's upside. The general dollar index provides some support." The benchmark 10-year U.S. Treasury rates rose while the U.S. Dollar Index hit a low of one month, making gold more accessible to overseas buyers. The latest data on Thursday shows that the number of new U.S. unemployment benefits claims fell to 191,000 in the past week, which is lower than it has been for over three years. This figure was also well below what economists had predicted at 220,000. ADP's report on Wednesday showed that private payrolls in the United States fell by 32,000 during November. This was the largest drop in over two and half years. Over 100 economists surveyed by predicted that the Federal Reserve would reduce its key rate by 25 basis point at its policy meeting on December 9-10, as it seeks to support the cooling labor market. Gold is a non-yielding asset that benefits from lower interest rates. Investors will be watching the Federal Reserve’s preferred inflation indicator, the Personal Consumption Expenditures report (PCE), due this Friday. Meir said that the markets will remain relatively unchanged between now and next Monday. As for gold, we are likely to be in a trading range which is fairly uneventful. Silver fell 2.6%, to $56.96, after reaching a record-high of $58.98. The metal has risen by about 97.3% in this year due to a structural shortage, market liquidity concerns and its inclusion on the U.S. Critical Minerals list. Palladium fell 1.4% to 1,440.57, while platinum dropped 1.7% to $1642.67. (Reporting and editing by Anmol Chhoubey, Bengaluru. Krishna Chandra Eluri, Maju Samuel.
WTI gains weekly as Fed hopes to boost the market and Venezuela tensions are looming
WTI oil prices are expected to rise by a significant amount on Friday. This is due to the anticipated Federal Reserve rate cut. Also, tensions between the United States and Venezuela have risen, while peace talks in Moscow have stalled.
Brent crude dropped 14 cents or 0.2% to $63.12 a barrel at 0400 GMT. The contract remained largely unchanged over the past week.
U.S. West Texas Intermediate dipped by 18 cents or 0.3% to $59.49 per barrel. This is despite a weekly increase of approximately 1.6%, and the second consecutive week of growth.
The market is weighing the impact of lower CPC shipments and positive news from the demand side. A possible Fed rate reduction has also been discussed. Anh Pham is a senior researcher at LSEG. She was referring to the lower Kazakhstan oil shipments following a Ukrainian drone strike on the Caspian pipeline consortium's Black Sea loading facilities.
The previous trading session saw both contracts settle up by around 1%.
In a survey conducted between November 28 and December 4, 82% of economists expected that the Federal Reserve would reduce interest rates by 25 basis points at its policy meeting next week. A rate reduction would boost economic growth and oil demand.
Supply factors will continue to be a focus in the future. "A peace agreement with Russia will bring more barrels onto the market, and likely drive prices down," Pham said.
"On the contrary, any geopolitical escalate will push prices higher." OPEC+ agreed to maintain production until the beginning of next year. This will also support prices, he added.
The markets also continued to prepare for a possible U.S. invasion of Venezuela, after President Donald Trump announced late last week that he would begin taking action "very soon" to stop Venezuelan drug smugglers on land.
Rystad Energy stated in a report that such an action could threaten Venezuela's crude oil production of 1.1 million barrels each day, which is mainly supplied to China.
The prices were also lifted this week due to the failure of the U.S. negotiations in Moscow to reach any significant breakthroughs in the war in Ukraine. This could have included an agreement to allow Russian oil to return to the market.
These factors helped to keep prices stable despite an increasing surplus.
Saudi Arabia has cut its January Arab Light crude prices for Asia to their lowest level in the past five years due to oversupply. This was revealed by a document that was reviewed on Thursday. (Reporting from Colleen Lerh and Jeslyn Howe in Beijing; editing by Tom Hogue.)
(source: Reuters)