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Gold nears record highs amid softer inflation data that fuels Fed's cut bets
Gold prices rose on Wednesday as investors hoped that the Federal Reserve would resume rate reductions at its meeting next week, after softer than expected U.S. inflation figures. As of 9:16 am EDT (1316 GMT), spot gold was up 0.6% to $3,647.79 an ounce after reaching a record high on Tuesday of $3,673.95 per ounce. U.S. Gold Futures for December Delivery were up 0.2% to $3,687.40. Labor Department data revealed that U.S. producers prices fell unexpectedly in August. This was due to a decrease in service costs. Fawad Rasaqzada is a market analyst for City Index and FOREX.com. He said that any further weakness in U.S. economic data would continue to support the gold price, as it could indicate more than two interest rate cuts before the end of the year. Gold is traditionally viewed as a hedge to political and economic uncertainties and inflation. It also tends do well when interest rates are low. It has increased by more than 38% in the past year. CME's FedWatch showed that the markets are pricing in 90% of a quarter point cut during the Fed's meeting on September 16-17, and there is a slim chance for a bigger cut. The market confidence that easing is imminent was reinforced by the soft nonfarm payrolls data released last week, which indicated a cooling of labor market conditions. The Labor Department revised down its estimates of job growth through March. This suggests that job growth had already slowed before President Donald Trump's aggressive import tariffs. A federal judge temporarily blocked Trump’s Tuesday attempt to remove Federal Reserve governor Lisa Cook. This was a setback for White House in the legal battle that threatens central bank independence. The Fed will now focus on Thursday's Consumer Price Index reading. Ricardo Evangelista is a senior analyst with ActivTrades. He said that the $3,750 level was the next major resistance. If the precious metal consolidates above this mark, it could reach $3,900 before the end of the year. Silver spot increased 0.4%, to $41.06 an ounce. Palladium climbed 2.7% to 1,179.30 and platinum gained 1%. (Reporting by Sherin Elizabeth Varghese and Ishaan Arora in Bengaluru)
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Lazy investors, unite! Vanguard takes on the challenge of 'rational indifference': Ross Kerber
The problem that would-be reformers of corporate voting continue to face is the same: It's so complicated for an individual investor. Reformers might want to be careful about what they wish for. Shareholders in Vanguard 500 index funds, for example, could be faced with 4,500 decisions each year regarding how to vote proxy ballots during corporate annual meetings. Who could sort all that out, anyway? In a forthcoming paper, a group of professors of law and business from Duke University, University of Florida and Columbia University refers to the "rational apathy" problem. They say that shareholders will not waste time trying to figure out how to vote in a complicated way with little effect. Fund companies are now handling the voting themselves. Until recently, only environmentalists and social reformers cared. Then conservatives in the United States realized that they could exert pressure on companies and asset managers to change how they cast their ballots. The top managers could avoid the fire by using "pass through" voting programs that allow fund investors to influence the proxy votes funds cast at annual corporate meetings. John Galloway, Vanguard's chief of stewardship, told journalists in a press briefing this week that 82,000 investors had used the Voting Choice program over the 12-month period ending June 30. This is about twice as many as the previous year. They voted $9 billion worth of shares, which is triple what they did last year. This is still a small amount compared to Vanguard, which has 50 million investors with $11 trillion of assets under management. Get ready to see things take off. Galloway stated that Vanguard is working with corporate sponsors in order to provide voting options to participants of 401(k), or similar retirement plans. He released new statistics showing that investors are dispersing their vote across a wider variety of voting policies, including a new Egan Jones policy with anti ESG criteria. Galloway stated, "We have seen investors demonstrate the 'choices' of Investor Choice in this year's Investor Choice. PUMPING UP BOSSES Reformers who want to rein in CEO compensation have high hopes that the change will take power away from the fund managers, who, among other things, earn fees by managing corporate retirement funds. In the draft paper the academics state that a surprising result of increased pass-through voting would be an increase in the power of the boards. This is because individual investors are more likely to support policies that benefit management. Two close votes at Tesla took place last year. Shareholders approved narrowly measures that called on Tesla to reduce its director term from three to one year and require only simple majorities for certain governance changes, rather than the two-thirds standard currently in place. Both measures were supported by Vanguard's main stewardship group. In the pilot voting program last year, 36% of shares either abstained from voting or supported management. If that 36% had applied to all Vanguard index equity funds, then both proposals would have been just below the 50% threshold required by both items. The authors note that as proxy voting programs increase, "the reality of a changing ecosystem becomes more and more probable." Dorothy Lund of Columbia University Law School, one author, stated in an interview that pass-through voting is a great way to empower investors who don't agree with the voting decisions made by their managers. Most mutual fund investors aren't interested in their holdings, much less how to vote. The new voting policies will empower proxy advisers. This could eventually include financial online influencers (FinFluencers) who would post their voting recommendations to TikTok. Lund stated that in theory, more competition should lead to better options. She said that if proxy voting is so open, companies may not know who to listen to. Lund stated that "implementation of an open proxy system could lead to fragmentation where issuers do not know with whom to speak because no one is really directing votes."
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Bain Capital sells China data center business to Chinese consortium at $3.9 billion
The companies announced that U.S. investment company Bain Capital had agreed to sell the China operations of data centre operator WinTriX DC Group to a consortium headed by Guangdong Hec Technology, for 28 billion Yuan ($3.93billion). Hec Technology, its controlling shareholder, and a subsidiary will increase capital by 7.5 billion Yuan in a joint-venture to partially finance the deal. Bain Capital announced in a separate press release that institutional investors and funds from local governments are also included in the consortium. In a filing, Hec Technology said that the acquisition would help it expand its data centre business as well as strengthen its core competitiveness within the digital infrastructure industry chain. In 2019, Bain Capital acquired WinTriX DC Group (formerly known as Chindata Group Holdings) and merged with Southeast Asia Data Centre operator Bridge Data Centres. Bain Capital acquired Nasdaq listed Chindata in a $3.16 Billion deal nearly two years ago. WinTriX's largest customer is social media giant ByteDance, according to Fitch Ratings. ByteDance contributed 86% of WinTriX's revenue in 2022. It also has data centres in India, and Malaysia. Reporting by Yukun Zhi, Kane Wu, and Ryan Woo, Editing by Joe Bavier and Kirby Donovan
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Copper continues to be steady despite data from China and the US
The copper price remained stable on Wednesday, as the market awaited data on loans from China's top consumer and U.S. Inflation numbers that may determine the direction in which U.S. Interest Rates will move. The benchmark copper price on the London Metal Exchange was 0.10% higher, at $9.929 per metric ton of official rings. Traders reported that volumes were low as consumers and producers were absent. The market was dominated by funds, which reacted to macro-factors. China's loan data is due on September 10-15. Analysts will focus on the total social finance numbers, which they use as a gauge for industrial metals demand. They expect that August's figures are higher than July's. Financial markets expect a quarter point cut in interest rates from the Federal Reserve, with a slight chance of a half point cut. The report on U.S. Consumer Inflation on Thursday may influence the possibility of a bigger cut. The U.S. Dollar would fall when the Fed rate falls, making dollar-priced precious metals more affordable for holders of other currencies. This could increase demand. Ed Meir, Marex analyst, said that "the dollar's weakness will likely provide some support, at least in the early part of September." If the Fed catches the markets by surprise, a stronger currency could lead to a downward trend in prices for the rest of the month. A temporary halt in mining at Freeport McMoRan’s Grasberg mine, one of the largest copper mines in the world, was a major factor supporting copper. Zinc stocks are also a focus In LME-registered warehouses, the 50,825 tonnage has dropped by nearly 75% from mid-April. The LME system is expected to lose another 15,375 tonnes of zinc due to cancelled warrants and/or zinc that was earmarked for shipment. Concerns about zinc availability on the LME have led to a premium or backwardation with the forward cash contract for the next three months. The current price of a ton is around $18. Lead was unchanged at $1,977. Tin rose 1% to $35,350. Nickel was slightly lower at $15,090.
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Russia considers a moratorium on the bankruptcy of metal giants with indebtedness
A government document published on Wednesday showed that Russia was considering a moratorium for bankruptcies within the metals sector. This is a sign of increasing concern over a struggling industry battling with falling demand and high interest rates, as well as a strong rouble. In the document, which was a protocol of the meeting held by the Financial Stability Commission on August 28, the ministry of economy and the ministry for industry were asked to submit proposals on October 28 regarding the feasibility of a ban on bankruptcy in the sector. Kommersant was the first to report on this news. This move is part of a wider package to support the industry. It follows similar measures taken to assist the struggling coal sector. These included tax deferrals, limiting bonuses and dividends for top managers, and even deferring taxes. The Economy Ministry declined comment. Russia will be the fifth largest steel producer in the world by 2024, with a production of 71 million tonnes. Severstal, one of the country's leading steelmakers estimated in July that steel demand had fallen by as much as 15% during the first half due to high interest rates. This, combined with low prices, caused a 55% drop in the net profit of the company in the second quarter. On September 12, the central bank board will meet to determine the key interest rate. The analysts polled expect a 200 basis point cut as the economy has slowed faster than expected and inflation is declining. The Russian economy will slow down to 1.2% from 4.3% growth last year. In a January research note, a think-tank that advises the government stated that Russia may face a wave corporate bankruptcies as the percentage of companies with high levels of risky debt will double by 2024. The central bank and government dismissed these warnings by saying that the situation was in control. (Written by Gleb Brynski; Additional Reporting by Darya Korsunskaya; Anastasia Lyrchikova; Gleb Stolyarov, Editing by Guy Faulconbridge & Jan Harvey).
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Sources say that Zijin Gold aims to raise the Hong Kong IPO valuation above $30 billion.
Two people who have direct knowledge of this matter said that Zijin Gold International is planning to begin bookbuilding next week for its Hong Kong IPO, with a target valuation of more than $30 billion. One source said that Zijin Gold plans to open its books September 19 and aims to raise over $3 billion. According to LSEG, if the listing were that large, it would rank as Hong Kong's second largest listing of this year after Chinese battery company CATL raised $4.6 Billion in its May offering. Sources who refused to name themselves because the information is confidential said that Zijin Gold will price its offering on September 24, with the debut scheduled for September 29. According to the other source, Zijin Gold is valued between $30 and $40 billion based on the estimated range of prices. Sources said that the market or unforeseeable events could affect the timing, size of the offering, and valuation of a company. Zijin Gold - which owns all the gold mines of Zijin Mining outside China - did not respond immediately to comments. Zijin announced in late April that it would spin off Zijin Gold International, and list the company on the Hong Kong stock exchange as part of an overhaul of its overseas assets. This was done to reflect its confidence about stepping up its investment in gold. The eight gold mines that will be listed in the proposed listing are located in South America and Central Asia. They also have operations on Africa, Oceania, Africa, and Oceania. Gold prices are on a record-breaking rise, reaching $3,673.95 an ounce Tuesday. This is due to growing geopolitical uncertainties, expectations that the U.S. will cut interest rates this month, and central bank purchases in several countries, including China. Goldman Sachs said last week that prices could rise well above their $4,000 base by mid-2026. Laopu Gold shares, a Chinese luxury jewellery brand that specializes in gold, closed Wednesday at HK$755 apiece, nearly doubling their HK$40.50 IPO value from June 2024. Zijin Gold was incorporated in Hong Kong, in 2007. It reported revenues of $1.8billion, $2.3billion and $3billion respectively for the last three years. This information was provided in a filing made to the Hong Kong Stock Exchange in June. Zijin Gold failed to disclose in its filing the purpose of the IPO proceeds. In the half-year reports, its parent stated that Zijin Gold’s listing was of strategic importance in order to achieve its goal of mining between 100 and 110 tons gold by 2028.
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Sources say that Brazil will propose a new forum for climate and trade complaints.
Brazil will propose the establishment of a forum where governments can discuss the impact climate policy has on trade. This is an issue that both the U.N. Climate talks and the World Trade Organization have failed to address, according to three officials who are familiar with the plan. The European Union has been accused by emerging economies such as Brazil, South Africa, and India of restricting the trade with its environmental policies. One example is a December ban on imports that are linked to deforestation. The EU said that trade discussions should take place at the World Trade Organization. Brazil, the host of COP30 (the U.N. Climate Summit) in November, wants to break this impasse. One official said that Andre Correa do Lago, the Brazilian COP30 president who will be making the proposal next week at the WTO annual public forum, is expected to make it during the WTO Forum. Source: The goal is to get enough support for the forum so that it can be launched at the COP30 summit, in November, with the members already in place. Officials declined to identify themselves and refused to comment publicly. Brazil's COP Presidency did not respond immediately to a comment request. One official expressed concern about the impact on international trade of two EU environmental policies: the EU’s anti-deforestation legislation and its carbon border tax, which will begin imposing pollution fees on imported cement and steel in January. The official, who is Brazilian, said: "We are worried about the growing trend to limit trade by using climate change as a justification. Today we don't have an appropriate forum to discuss this." The WTO does not have the capacity to deal with climate change. Source: The new forum may also provide solutions, such as tools for tracking deforestation which are affordable to producers and acceptable to buyers in Europe. A spokesperson from the European Commission didn't immediately respond to an inquiry for comment. The EU has been claiming that its carbon border tax is not a measure of trade, but rather a way to bring foreign producers up to par with European manufacturers who pay for CO2 emissions. The draft EU negotiating mandate for COP30, which was seen by, stated that the bloc is open to discussing international impacts of its climate policies in "bilaterally, and within the context of WTO, Paris Agreement context, and other appropriate forums." According to sources, the Brazilian forum's proposal would include at least two groups: one for climate and trade and another on energy transition. The sources added that they wanted to have representatives from both the trade and climate sectors meet every few months.
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Austria loses its legal challenge against EU 'green gas' and nuclear rules
Austria lost its legal challenge to European Union rules classifying nuclear energy and gas as climate-friendly investment on Wednesday. Europe's second highest court sided with the EU in the case. Austrian government challenged the European Commission decision to include nuclear and gas in the EU "taxonomy", which is a list of investments that are able to be marketed and labeled as sustainable. The court agreed with Brussels in a ruling that said the EU Commission was "right to believe that certain economic activities within the nuclear energy sector and the fossil gas sector can, under certain circumstances, contribute significantly to climate change adaptation and mitigation." The Austrian Ministry for Environment said that the decision was "very regrettable". "We have always believed that nuclear energy does not meet environmental sustainability criteria. The role of fossil gas in the energy transformation will be temporary. The company said that it will now review the decision and decide on any possible next steps, including whether or not to appeal. Gas and nuclear will be included in the EU taxonomy in 2022, causing a deep divide between countries on which energy source to use in order to achieve climate change goals. Spain and Denmark, among others, had said that it was not credible for gas, which is a fossil fuel emitting CO2, to be labelled as climate-friendly. Poland and Bulgaria sought to support gas investments as a way to get rid of more polluting coal. Austria's legal case, filed to the EU general court by an earlier coalition government where the Greens controlled the environment ministry, argued that Brussels should annul rules because nuclear energy can't meet the requirement of "doing no significant harm" in the environment due to concerns about radioactive wastage. Austria has long been against nuclear energy. The European Commission didn't immediately respond to a comment request. (Reporting and editing by Charlotte Van Campenhout, Sharon Singleton, Francois Murphy, Vienna)
As plastic treaty talks open, countries more divided than ever
Nations are under pressure to make progress on a firstever worldwide plastics treaty this week, however they deal with tense settlements in the Canadian capital with celebrations deeply divided over what the treaty should include as talks start on Tuesday.
If federal governments can agree on a legally binding treaty that addresses not simply how plastics are disposed of, but likewise how much plastic is produced and how it is used, the treaty could become the most considerable pact to deal with international climate-warming emissions since the 2015 Paris Contract.
The production of plastics accounts for some 5% of environment emissions and might grow to 20% by 2050 unless restricted, according to a report last week from the U.S. federal Lawrence Berkeley National Lab.
When countries concurred in 2022 to work out a lawfully binding treaty by the end of this year, they called for addressing the full lifecycle of plastics - from production and usage to waste.
But as settlements begin in Ottawa, there is staunch opposition from the petrochemical lobby and some governments based on fossil fuels to restricting production or banning particular chemicals.
Countless delegates, including negotiators, lobbyists and non-profit observers, were expected at the Ottawa summit, the fourth negotiating round ahead of a last contract due in December - making this one of the fastest U.N.-led treaty efforts to date.
They were greeted by protesters staging a die-in - laying down and pretending they are dead - on Tuesday early morning across from the negotiations' place.
This procedure is without doubt a sped up and ambitious one, due to the fact that we do not have decades to act, stated Inger Andersen, executive director of the United Nations Environment Program.
DEEP DIVISIONS
The chair of the Ottawa negotiations told he prepared to split national delegates into seven working groups today to work on unsettled issues, including what the treaty ought to consist of and how it must be implemented.
Time is not our finest ally, stated top chair Luis Vayas Valdivieso, who is also Ecuador's vice minister of foreign affairs.
Steven Guilbeault, Canada's environment minister, told the opening plenary: We now require to limit the alternatives, identify where there is growing agreement and materialize progress on the agreement, adding that the pact needs to develop targets and get rid of unnecessary single-use plastics and chemicals.
During the last treaty talks in November in Nairobi, there was strong assistance from 130 governments for requiring business to divulge how much plastic they produce, and which chemicals they use in the process.
With plastics production on track to triple by 2060, supporters say such disclosures are a fundamental primary step in controlling damaging plastic waste-- the vast majority of which winds up as trash ruining landscapes, blocking waterways or in landfill - and damaging public health.
Practically a fifth of the world's plastic waste is burned, which releases high quantities of carbon emissions. Less than 10% of it is recycled, according to U.N. data.
Nevertheless, a handful of fossil fuel-dependent countries calling themselves the Similar Countries have actually refuted limiting production or banning certain chemicals. The group, which includes Saudi Arabia, Russia and China, states the treaty must focus just on tracking plastic waste.
The position is shared by the petrochemical industry.
We are looking at the arrangement to speed up actions that market is already doing on its own, such as enhancing recycling and revamping plastic items, stated Stewart Harris, a representative for the International Council of Chemical Associations.
Saudi officials declined to comment. The state-owned oil business Saudi Aramco has said it plans by 2030 to be sending out nearly one-third of its produced oil to petrochemical plants to make plastics.
China, which produces approximately a 3rd of the world's. plastic, has actually always connected excellent value to the control of. plastic contamination and is willing to deal with other nations to. make joint development in negotiations, Chinese foreign ministry. representative Lin Jian stated.
In the opening session, essential regional blocs laid out some key. components they wish to see in a treaty.
The Asia Pacific group said that countries should. get financial and technical support for waste management. facilities as they take on brand-new commitments under the. arrangement.
The Africa group called for the creation of a brand-new. multilateral fund to help establishing countries meet brand-new. commitments under a treaty and called attention to the truth that. the continent has ended up being a target for illegal trade of plastic. waste and urged arbitrators to prioritize waste prevention and. reduction before non-toxic waste recycling and disposals.
ARGUING FOR ASPIRATION
It is uncertain whether most of nations requesting for. production limitations can encourage the holdouts to support such a. measure. Ecological groups and scientists state production. limits are important.
More plastic production indicates more plastic contamination, said. Bjorn Beeler, international coordinator of the International. Toxins Elimination Network.
That point was highlighted in a letter published on Tuesday. by 30 scientists making up the Scientists Union, who have. informed arbitrators that caps on plastic production are the only. way to deal with the issue and called on industry to supply. in-depth figures for production and reveal the chemicals they. usage to allow more effective recycling of components.
The most significant generator of plastic waste, the U.S., has. refrained from joining the negotiating blocs. Steps proposed. by U.S. arbitrators consist of needing nations to deal with. specific chemicals that have raised public health issues as. well as single use plastic items that are considered inefficient.
A State Department authorities informed the U.S. delegation. wanted the treaty to be enthusiastic in its objectives-- but to let. governments decide how they would reach those objectives, comparable to. the structure of the Paris Climate Arrangement.
More than 60 nations making up the so-called High-Ambition. Coalition, consisting of European Union members, Mexico, Australia,. Japan and Rwanda - and most recently Ukraine, are also arguing. for a strong treaty that deals with production and needs. openness and controls for chemicals utilized in the process.
However unlike the U.S., they argue the treaty must impose. international measures and targets rather than a system of nationwide. action plans.
Some Democratic U.S. lawmakers, consisting of a delegation. participating in the opening of the negotiations, called on the U.S. to. join the coalition and assistance stricter procedures, even if. Congress will not validate the treaty.
The Paris design is a wanting well method where you. hope that simply having conversations will take us down a path of. decreasing plastic contamination, Oregon Senator Jeff Merkley told. . A treaty needs to include binding obligations and. constraints..
(source: Reuters)