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Gold on track for 8th straight weekly gain as demand for safe-havens and rate cuts bets sets gold on course to increase its value
Gold prices rose Friday, and are on track to reach an eighth consecutive weekly gain. This is due to expectations that the U.S. Federal Reserve will cut rates this month. Meanwhile, economic and political uncertainties have added to gold's appeal as a safe-haven. As of 8:41 AM ET (1241 GMT), spot gold had risen 0.3%, to $3.985.60 an ounce. This week, the metal is on track to gain 2.6% in a single-week. U.S. Gold Futures for December Delivery rose by 0.7% to $4001.50. Bullion that does not yield, which reached a record-high of $4,059.05 Wednesday, has traditionally been considered a hedge in times of greater uncertainty. Gold's recent rally has been attributed to geopolitical risk, central bank buying of gold, inflows of exchange-traded fund, U.S. interest rate cuts expectations, and tariffs. Hamad Hussain is a climate and commodities economist with Capital Economics. He says that the gold price has been supported by investor concerns about fiscal sustainability in general and expectations of US Fed rate reductions. The minutes of the U.S. Federal Reserve meeting in September revealed that policymakers were willing to cut rates to address risks on the labour market, but inflation concerns continued. Investors expect two Fed rate reductions of 25 basis points in October and December. The markets are closely watching the risks associated with the possible collapse of the French Government and the current government shutdown in the United States. Bullion priced in greenbacks is now cheaper for foreign buyers. "Overall, there's a chance of a temporary price drop given the rapid rise in gold prices in recent weeks." Over the next two years, Hussain said that gold prices will likely continue to rise. Silver's rise is fueled by the same factors that have driven gold's price up, as well as concerns over a shortage of silver and rising demand. After reaching a record-high of $51.22, silver rose by 1.7%, to $49.95 an ounce. This year, it has gained 73%. Silver futures for December 2025 on Comex were trading at $48,25. Alex Ebkarian is the COO of Allegiance Gold. He said, "Silver’s backwardation sends a clear message: physical demand is crushing paper supplies ....If physical demand continues to rise, breaking and maintaining above $50 silver is very possible." Backwardation occurs when the spot price of a commodity is higher than the futures price. Palladium, meanwhile, gained 3.8% and platinum 0.6%, respectively, to $1.464.51. These metals are both headed for gains this week.
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After a rally to $11,000/t, copper prices fall on the back of profit-taking
The copper price fell on Friday, as investors took profits after the metal had rallied to its highs in 16 months the previous session. This was due to concerns over tight supply. In official open-outcry trade, the price of three-month copper at the London Metal Exchange fell by 0.9% to $10.765 per metric ton. On Thursday, it reached $11,000 and moved closer to the all-time high of $11,104.50 in May 2024. After Freeport declared force majore at its Grasberg mine, in Indonesia, at the end September, investors have piled into copper. Data released on Thursday showed that the copper production of Chile's Codelco fell 25% in August following a deadly mine collapse. Discounts on the LME Cash Price to the 3-month Copper Contract The price of a ton dropped to $26 from $57 one month earlier. Copper, which is used in construction and power, has been unable to rally due to a lackluster demand. David Wilson, BNP Paribas' analyst, said that demand for industrial metals is generally not very good. To have a bull cycle that lasts, industrial commodities need to be characterized by a strong demand story. Copper inventories in China's top metals consumer, China, have risen 15% since late September. The Yangshan premium on copper has also increased. The price of copper, which reflects the demand for imports, remained at $49.50 per ton. This is its lowest level since August 19. In official activity, lead was down 0.8% at $2,013 per ton, disregarding the LME data that showed 118,000 tonnes of the metal marked as ready for delivery from LME-registered storage facilities, which brought the cancelled stock to 70%. LME aluminium dropped 0.4% at $2,786.5. Zinc rose 0.4% at $3,022.5. Nickel was down by 0.9% to $15,350. Tin fell 1.4% to 36,550. (Reporting and editing by Kirsten Doovan, Vijay Kishore, and Polina Devitt)
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Sources say that Barrick Mali's mining will be restarted by the provisional administration
Two sources have confirmed that blasting will begin on the Loulo underground mine of Barrick Mining in Mali, four months after a provisional court-appointed administration was given control. The Loulo-Gounkoto Gold Complex has been operating under a provisional administration since the beginning of the year, but only to the extent that it transports ore to the plant to be processed. One source said that the provisional administrators planned to resume mining operations in September but they delayed the date because of negotiations with subcontractors. Some of them had not been paid after Barrick suspended its operations in January. UNPAID BILLS SETTLED; PIT MINE STILL SUSPENDED Sources said that the blasting, which involves using explosives to break down gold deposits, would resume once the administrators settled unpaid invoices with subcontractors Sandvik, and Maxam. First source: Activities will not resume at the open pit mine of the complex next week, because the principal subcontractor who operates that site is still unpaid. Barrick has suspended operations in Loulo-Gounkoto following tense negotiations with Mali’s military-led Government over the implementation of a new mining law that increases taxes and gives state ownership rights to assets. This led a Bamako Court in June to name provisional administrators led by the former Malian Health Minister Soumana Maadji to restart operations at this complex. The second source reported that Loulo has produced 1,07 metric tonnes of gold since the suspension from ore stockpiles that were mined prior to the suspension. A spokesperson from the Mali mines ministry refused to comment. Makadji, Barrick, Sandvik, and Maxam spokespeople did not respond immediately to requests for comments. BARRICK AND MALI TALKS CONTINUE. ARBITRATION RESULTS EXPECTED Barrick has been in contact with the Malian Government intermittently all year. A round of negotiations took place in August. Barrick announced Mark Bristow's sudden departure a few weeks later. A source familiar with the situation said that the parties are also involved in an international arbitration before the World Bank arbitration court. The arbitral court is expected to make a decision on the legitimacy this month. The World Bank's arbitral body has not responded to any requests for comments. According to a document from the mines ministry seen last week, Mali's industrial production of gold fell by 32% on an annual basis to 26.2 tonnes at the end August. This was largely due to the Barrick suspension. (Reporting and editing by Divyarajagopal and PortiaCrowe; Editing and Veronica Brown by Joe Bavier.)
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Russian draft law limits power companies' dividends in order to encourage them to invest more
According to a draft of a law, the Russian Energy Ministry wants to limit dividend payments by electricity companies to raise funds for major infrastructure upgrades. All Russian companies engaged in the generation, transmission and distribution of electricity would be affected by this proposed measure. Currently, companies set their dividends and borrow money to finance investments. The new law will force them to prioritize investment over dividends when allocating their profits. This is according to an industry source as well as a source who has been involved in the drafting of the bill. One source said that there are many large-scale projects for power generation in Russia. It makes sense to direct a portion of dividends towards these new projects. Energy companies, officials, and regulators are looking at new ways to attract investments for energy construction through 2042. This is despite high interest rates, restricted access to financing, and restrictions on imports of equipment due to Western sanctions against Russia. These projects are considered necessary to prevent shortages and modernize the electricity system. The Russian government plans to build 90 gigawatts by 2042. This, together with grid upgrades is expected to cost approximately 40 trillion roubles (US$492 billion). In 2008, Russia finished the reform of the Soviet-era RAO UES power monopoly, dividing it by business types and privatizing the majority of thermal generation companies in order to attract investments for the first wave of upgrades of the ageing system. The state still controls dispatching and grid operations, even though shares in most grid companies were listed. Many distribution network companies also have large free floats and pay dividends. In practice, the largest investors -- grid operator Rosseti and Rushydro as well as companies within the Gazprom group of Energoholding -- pay very little or no dividends. InterRAO is the only operator of Russia's imports and exports for electricity. It pays out 25 percent of its profit in dividends. Dmitry Bulgakov is an analyst with the investment company BCS. He said that the proposed changes appeared to be unfriendly for non-state investors, especially minority shareholders. "Refusing or limiting dividends is a negative thing for the companies in this sector. "We are not changing the valuation or outlook of these stocks at this time, but we will continue to monitor developments," said he.
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Carlyle and Qatar Investment Authority buy BASF's coatings business.
BASF agreed to sell its majority stake in the coatings division to Carlyle, a private equity firm and Qatar Investment Authority. The unit is valued at 8.91 billion euros (7.7 billion euro). The companies announced in a joint press release that BASF will retain a 40 percent stake in its coatings business. It also expects to receive an inflow of cash before tax of approximately 5.8 billion euro upon completion of the deal. BASF sold its coatings division at the beginning of the year as part of a broader strategy to focus on closely integrated businesses and those that are physically connected in the major chemical plants around the world. BASF stated that when combined with Sherwin Williams' sale of decorative paints earlier this year, the transaction values BASF's whole coatings division as an enterprise value of 8.7 billion euro, including debt, or approximately 13 times the earnings before interest tax, depreciation, and amortization (EBITDA) for 2024. The company began exploring strategic options in the second quarter for its remaining coatings operations, with a view to making a final decision by the end of the year. The company has stated that proceeds from a possible divestment would allow an earlier start of a previously-announced share buyback between 2027-2028, which is at least 4 billion euro.
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Botswana implements new local ownership rules for mines of 24%
Botswana's Mines Ministry announced on Friday that a new rule has been implemented requiring mining firms to sell 24% of new concessions to investors in the country if the government does not want to purchase the stake. The government has not yet announced when the rule will come into effect. The Mines and Minerals Act gave Botswana the right to purchase a 15% stake in any mining project upon being granted a license. Diamond projects had an option of a larger stake. This southern African nation is the top diamond producer in terms of value, and is also a hotspot for copper mining. In a press release, the Ministry of Minerals and Energy announced that on October 1, the rule requiring local ownership of 24% in mining projects came into effect. The law also aims to increase local ownership of mineral wealth and promote local value-adding. It also ensures mining companies set up environmental rehabilitation funds. The former Mines Minister said that local investors can buy concessions using domestic pension funds when the Mines and Minerals Act amendment was debated in the parliament. (Reporting by Brian Benza. (Editing by Anathi Mdubela, Alexander Winning, Mark Potter and Mark Potter.)
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Gold gains for the eighth consecutive week on safe-haven demand; silver hovers close to record
Gold recovered from its earlier losses and was on course for an eighth weekly gain. This was driven by political and economic uncertainties and the expectation of more U.S. interest rate cuts. Silver hovered at a record-high. As of 1112 GMT, spot gold was up 0.6% to $3,998.02 an ounce, a 2.9% gain for the week. U.S. Gold Futures for December Delivery rose 1% to $ 4,012.30. Bullion that does not yield is considered to be a hedge in times of greater uncertainty. "Gold is not just a defensive investment -- it is becoming offensive." It is the best alternative to the dollar in this climate and it's a true measure for trust in the global finance system, said Alex Ebkarian. COO of Allegiance Gold added that gold will be in a secular bull-market over the next five year. The rally was supported by a number of factors, including geopolitical risk, central bank buying and exchange-traded funds, as well as expectations for U.S. interest rate cuts. After reaching a record-high of $51.22, silver rose 2.6% per day to $50.40 an ounce. This year, it has risen 74%. Hugo Pascal is a precious metals dealer at InProved. He said: "Given an increase in lease rates and a backwardation line, as well as the lack of liquidity on London OTC, we should expect greater volatility in silver." Backwardation occurs when the spot price of a commodity is higher than its expected price. Ebkarian stated that if contango (the opposite to backwardation) returns, and the stress is eased, a small pullback (in silver) could occur -- and this may be the next big buying opportunity. Bullion priced in greenbacks is now cheaper for foreign buyers. The minutes of the September meeting of the U.S. Federal Reserve revealed that policymakers were willing to cut rates to address risks in labour markets, but inflation concerns continued. Investors continue to expect two Fed rate reductions of 25 basis points in October and December. Israel's government approved a ceasefire Friday with the militant Palestinian group Hamas. Palladium and platinum were up 3% each to $1454,59. These metals are headed for gains this week.
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WeWork India's stock price falls in its debut trading amid valuation and governance concerns
Investors were concerned about the steep valuation of WeWork India Management and governance risks. The shares fell 3% in their debut trading on Friday. The shares opened just above the IPO price of 648 Rupees, and dropped as much as 5.2% at 614.25 Rupees. The company, which licensed its brand from the now bankrupt U.S. WeWork Global, raised $338.16 in its IPO, which was subscribed 1,15 times. Institutional bids were a major factor. Aishvarya Dadeech, Chief Investment Officer at Fident Asset Management, said: "The market wasn't very comfortable with the value of WeWork, and WeWork now faces the heat." Dadeech added that WeWork's growth prospects are also less appealing than those of its peers. He cited a projected revenue increase of 22% between fiscal years 2023 and 2025. This is behind peers like Smartworks Coworking Spaces IndiQube Spaces Awfis Space Solutions. WeWork India listed at a time when the Indian primary market was busy. The IPO of Tata Capital attracted bids of $1.24 billion, and LG Electronics India received 54.02 bids, making it the most-subscribed billion-dollar IPO for nearly two decades. WeWork India is facing more than just a crowded IPO. It faces a range of challenges, from concerns about corporate governance to its ability to fund expansion and sustain operations in the face of sluggish demand, as well as increased competition from lean and profitable competitors. InGovern Research Services, a proxy advisor, warned investors about WeWork India’s fragile financials. This included negative cash flow and high lease liabilities as well as the lack of fresh capital. WeWork India didn't immediately respond to our request for a comment. The company has flexible offices in eight major Indian cities. It competes with other companies such as Smartworks which has gained 35% since July's debut and IndiQube Spaces which dropped 15% after listing, but has recovered to trade at 4% above its listing price. According to exchange data, Smartworks' market capitalization is 68.9 billion Indian rupees while IndiQube's is 47.6 billion. $1 = 88.6780 Indian Rupees (Reporting and editing by Sonia Cheema, Ronojoy Mazumdar and Meenakshi maidas in Bengaluru)
Venture Global shares slide after BP wins arbitration case over LNG cargoes
Venture Global's shares fell 17% on Friday in premarket trade after BP won an arbitration case against it over its failure in delivering liquefied gas as part of a long-term contract that was supposed to begin in late 2022.
Venture Global reported on Thursday that the International Chamber of Commerce International Court of Arbitration had found it in breach of its obligations to declare that commercial operations at the Calcasieu Pass Plant had started promptly and to act as "a reasonable and prudent operator."
BP, Shell Edison and Galp filed arbitration claims accusing U.S. firm of profiteering, by selling LNG cargoes for commissioning at higher spot-market prices rather than long-term contract prices.
This ruling is a blow to Venture Global which previously won the arbitration against Shell.
Elvira Scotto, an analyst at RBC Capital Markets, said that the result of the BP arbitration was "a bit surprising" and could rekindle investors' concerns about the pending arbitration proceeding.
BP wants to recover damages in excess of $1 billion, plus interest, fees and costs. This will be decided at a separate court hearing, expected to take place in 2026.
Venture Global shares are down 48% from their January 24 debut. Their market capitalization is now around $30.5 billion. (Reporting and editing by Sriraj Kalluvila in Bengaluru)
(source: Reuters)