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Gold drops below $4,000 an ounce as US China trade progress cools demand for safe-haven gold
Gold prices dropped below $4,000 an ounce on Monday, as signs of a thawing in U.S. China trade tensions diminished some of bullion's appeal as a safe haven. Market participants awaited this week's U.S. Federal Reserve interest rate decision. At 1:45 pm, spot gold fell 2.7% to $4,002.29 an ounce. ET (1745 GMT). The price of gold fell to $3.970.81 an ounce in the early session, its lowest level since October 10. U.S. Gold Futures for December Delivery fell 2.9% and settled at $4,019.70. David Meger is director of metals at High Ridge Futures. He said that a potential U.S. China trade deal could mean fewer safe-haven investments such as gold. The price of gold reached a record-high of $4,381.21/oz in October. However, it fell 3.2% the following week after hints that trade tensions would be eased between the two world's largest economies. On Sunday, U.S.-China negotiators outlined the framework of a deal that would halt steeper American tariffs while deferring China's 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. Gold prices are also falling due to a easing of trade tensions, which had pushed the price from $3,800 up to $4,400 in the first three weeks. The market expects the Fed to cut rates by a quarter percentage point at its meeting on Wednesday. In a low interest rate environment, gold, which is a non-yielding investment, performs well. Some analysts and investors are sceptical about the sustainability the recent massive rise in the price of yellow metal. Capital Economics analysts lowered their gold forecast on Monday to $3,500/oz by the end of 2026. It said that the 25% increase in gold prices since August was much harder to justify than prior moves during the rally. Silver spot fell by 3.6%, to $46.50 per ounce. Platinum was down 0.4% at $1,592.03, while palladium dropped 1.8%, to $1402.98. (Reporting and editing by Mark Potter, Richard Chang and Anjana Anil in Bengaluru)
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Hurricane Melissa, a Category 5 hurricane, begins to lashing Jamaica.
Hurricane Melissa started pounding Jamaica on Monday with fierce gusts as the U.S. National Hurricane Center upgraded it to a category 5 storm, packing sustained winds exceeding 165 mph. This is the strongest hurricane to ever hit the Caribbean island. The storm is expected to pass through Cuba, Turks and Caicos, and the eastern Bahamas. The hurricane will stay offshore and bring only minor coastal flooding and rough surf to the U.S. East Coast. According to the NHC, Melissa was still about 330 km (530 miles) southwest from Guantanamo in Cuba at noon on Monday (1600 GMT). The center reported that the hurricane was moving west at only 3 mph (5 km/h), but it would make a turn north-northeast through Jamaica on Monday night and Tuesday morning. Forecasters at the center said that the storm's slow motion over unusually tepid Caribbean waters had contributed to its growth and strength. Jamaica is now facing days of unprecedented catastrophic winds, and up to 3 feet of rainfall. The NHC stated that the damage to infrastructure, power and communications outages and isolation of communities will be severe. Authorities in Haiti and Dominican Republic, two island nations nearby, said that torrential rains have caused at least four deaths over the past few days. Damian Anderson is a teacher in Hagley Gap. This town, nestled among Jamaica's Blue Mountains, has already been cut off by impassable roads. "We can't move," Anderson, 47, said. "We're scared. "We've never experienced a multiday event before." Evan Thompson of Jamaica's Meteorological Service said that Jamaica has experienced many hurricanes, including Category 4 Gilbert in 1988. However, a direct strike from a category 5 would be unprecedented. The highest category on the Saffir Simpson scale is Category 5, with sustained winds greater than 157 mph. CUBA PREPARATIONS The eastern half of Cuba was also sacked in preparation for the expected landfall of the storm on Tuesday. Cuban authorities reported that they evacuated more than 500,000 people from coastal and mountainous regions vulnerable to strong winds and flooding. Over 250,000 people have been brought into shelters in and around Santiago de Cuba. The island's second largest city is directly under the predicted hurricane path. In eastern Cuba, schools, buses, and trains were cancelled until further notice on Monday due to the arrival of Hurricane Irma. Havana was not expected directly to be affected by the hurricane. Dave Sherwood, Havana and Zahra Burton in Kingston reported the story; Nia Williams edited it.
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Gold drops below $4,000 an ounce as US China trade progress cools demand for safe-haven gold
Gold prices dropped below $4,000 an ounce on Monday, as signs of a thawing in U.S. China trade tensions reduced bullion's appeal as a safe haven. Market participants were awaiting the Federal Reserve interest rate decision later this week. At 12:25 pm, spot gold fell 2.9% to $3.991.39 an ounce. ET (1625 GMT). U.S. Gold Futures for December Delivery were down 3.2% to $4,005.70. David Meger said that a potential U.S. China trade deal could mean fewer safe-haven investments such as gold. The price of gold reached a record-high of $4,381.21/oz in October 20. However, it fell 3.2% the following week after hints that trade tensions would be eased between the two world's largest economies. On Sunday, U.S.-China negotiators outlined a framework for an agreement to defer China's export restrictions and halt the steeper American tariffs. Donald Trump, the U.S. president, and Xi Jinping, China's premier will meet Thursday to discuss a possible trade agreement. Gold prices are also falling due to a easing of trade tensions, which had pushed the price from $3,800 up to $4,400 in the first three weeks. The market expects the Fed to cut rates by a quarter percentage point at its meeting on Wednesday. Gold is a non-yielding investment that performs best in low interest rate environments. Analysts and investors expect the yellow metal to reach new heights, possibly even $5,000/oz, but some doubt the sustainability of the recent massive rise. Capital Economics analysts lowered their gold forecast on Monday to $3,500/oz by the end of 2026. It said that the 25% increase in gold prices since August was much harder to justify than prior moves during a gold rally. Silver fell by 4%, to $46.65 an ounce. Platinum dropped 1.1%, to $1.588.71. Palladium was down 1.6%, to $1.405.56. (Reporting and editing by Mark Potter, Richard Chang and Anjana Anil in Bengaluru)
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US Department of Energy partners with AMD to develop supercomputers and AI systems worth $1 billion
Energy Secretary Chris Wright, and AMD CEO Lisa Su announced that the U.S. formed a partnership worth $1 billion with Advanced Micro Devices in order to build two supercomputers. These computers will be used to tackle scientific problems such as cancer treatment, national security or nuclear power. The U.S. builds the two machines in order to have enough supercomputers for the country to run increasingly complicated experiments, which require a huge amount of data crunching power. The machines will accelerate the scientific discovery process in the areas that the U.S. focuses on. Energy Secretary Wright stated that the systems will "supercharge" advancements in nuclear energy and fusion, technologies for national security and defense, and drug development. Scientists and businesses are working to duplicate fusion, which is the reaction that powers the sun. They do this by jamming atoms of light in a plasma under high heat and pressure, releasing massive amounts energy. Wright said, "We have made great progress but plasmas are unstable and we need a center of the Sun on Earth." The AI systems will allow us to make huge progress in the next 2 or 3 years. Wright added that the supercomputers will also be used to manage the U.S. nuclear arsenal and to accelerate drug discovery through simulations of ways to treat cancer at the molecular scale. Wright stated that he hoped to turn many cancers into manageable conditions in the next 5 or 8 years. Plans call for the construction of the first computer, called Lux, and its online launch within six months. The design will include AMD's central processors, AMD's MI355X artificial-intelligence chips and AMD networking chips. The system was developed by AMD in collaboration with Hewlett Packard Enterprise (HPE), Oracle Cloud Infrastructure, and Oak Ridge National Laboratory. AMD's Su stated that the Lux deployment is the fastest she has ever seen. Su stated that "This is what we wanted (to) do" for the U.S. AI effort. Stephen Streiffer, ORNL director, said that the Lux supercomputer would deliver three times more AI capability than current supercomputers. The second computer, called Discovery, will be built around AMD's MI430 AI chips which are optimized for high-performance computing. ORNL, HPE, and AMD will design this system. Discovery will be delivered by 2028, and ready to operate in 2029. Streiffer predicted huge gains, but could not predict the exact magnitude of computational power. Su explained that the MI430 is an MI400 variant which combines features from traditional supercomputer chips with features for running AI applications. A DOE official stated that the Department of Energy would host the computers and the companies would provide the machines. Both sides will then share the computing power. The official stated that the two supercomputers built on AMD chips were intended to be a first in a series of such partnerships with DOE labs and private industry across the nation. (Reporting and editing by Tom Hogue in San Francisco, Max A. Cherney is based in San Francisco)
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Exxon's carbon accounting group will appoint an independent panel, says CEO
Chief executive of Carbon Measures, an initiative to create a carbon accounting system backed by many large energy companies and multinationals, said that the panel will be independent. The group, which was launched by ExxonMobil and BASF, among others, is aimed at creating a system of carbon emissions accounting for companies. This will help to reduce double counting and reward them for being more sustainable. There are other carbon accounting guidelines, like the Greenhouse Gas Protocol. However, comparing companies is difficult. Carbon Measures wants to develop a ledger system similar to that used in financial accounting within the next two to three years. Carbon Measures CEO Amy Brachio stated that "the organisations who invest ahead of the curve are not necessarily rewarded for doing so". She added that if the markets and industries move together, there is a level playing ground which provides an incentive to invest in innovation. Brachio, who was previously the global vice-chair of sustainability for EY consultants, took on his new role as CEO in January. Carbon Measures will, with the International Chamber of Commerce's (ICC) help, appoint academics, accountants, business leaders, and civil society representatives to sit on a panel of independent experts and assist in the design of the global accounting system. Andrew Wilson, deputy secretariat-general of the ICC said that 10 years after the Paris Agreement was signed, companies still needed a standardised accounting system to speed up action. The initiative could be a "game changer" but "it can't be a talk shop, it must deliver". Brachio, along with Karthik Raanna, Professor of Business and Public Policy and Director of the Transformational Leadership Fellowship of the University of Oxford (England), will co-chair a panel of independent experts. Ramanna said that the initiative was similar to efforts made 90 years ago when the Generally Accepted Accounting Principles were established. If done correctly, these principles could unleash the full potential of capitalism in order to accelerate decarbonisation and drive energy abundance. (Reporting and editing by Susan Fenton; Simon Jessop)
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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.
After board shakeup, Couche-Tard launches charm offensive against Japan's Seven & i
Alimentation Couche-Tard wants to convince the Japanese people to accept its $47 billion offer for Seven & i. It also wants to address the antitrust concerns which have become a major stumbling-block in its bid to purchase the 7-Eleven owners.
Canada's Couche-Tard which owns Circle-K has been pursuing Seven & i since months despite the cold reception it received from the Japanese retailer. If the deal goes through, this would be the largest foreign acquisition in Japan's history.
On Thursday, executives from Couche-Tard held their first press conference at Tokyo. This was months after announcing a takeover bid for Seven & i. They also highlighted the Canadian firm's recent efforts to woo a Japanese audience sceptical about a foreign acquisition.
Artisan Partners, a U.S.-based shareholder, has repeatedly urged the Japanese company, Seven & i, to be more active in its engagement with Couche-Tard.
Seven & i repeatedly stated that possible antitrust issues in the United States could make the proposed acquisition difficult.
Couche-Tard stated this week that it is confident there is a "clear pathway" to overcome regulatory hurdles in the U.S. and expressed frustration over 7-Eleven's "limited involvement."
Couche-Tard said that it was working with Seven & i to develop a plan for divesting some of its stores in the United States.
Stephen Dacus, the newly appointed CEO of Seven & i, has stated that there are significant regulatory obstacles in the way. Both firms have about 20,000 convenience stores between them.
Couche-Tard is offering to pay $18.19 for each share of Seven & i. This represents a 23% premium on the Japanese company’s Thursday share price, which was 2,196 yen (about $14.82).
Anti-Trust Issues
The trip of Couche-Tard's management to Tokyo, and its engagement with Seven & i regarding antitrust concerns, show the extent to which dealmakers will go to secure deal certainty in the face of U.S. regulator scrutiny.
Deal advisers say it is rare for transactions to engage in detailed discussions about divestment before a deal has been agreed upon or a confidentiality agreement signed.
Kathy O'Neill is a partner with the law firm Fried Frank. She said, "I have never seen a situation where the divestiture package was set in stone before the merger agreement was executed and the buyer baked into it."
She said that preparing a divestiture plan before the merger agreement is reached could help reduce the chance of surprise, and save time and energy spent on chasing down a deal.
Tim Cornell, a litigation associate and member of Debevoise & Plimpton’s Antitrust Group agreed that the airing antitrust concerns prior to a deal being announced was not normal.
He said that buyers would test the waters in certain situations with regard to a divestiture plan, especially if they have identified this as what's needed. Couche-Tard sweetened their offer in October, and said they were committed to the deal after a competing $58 Billion management buyout proposal by Seven & i’s founding family did not materialise. (Reporting and writing by Abigail Summerville and Anton Bridge, respectively; editing by Sumeet chatterjee and Jamie Freed).
(source: Reuters)