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Gold reaches $4,100 on the back of trade tensions and rate-cut optimism
On Monday, gold broke through $4100 per ounce, a new record, on renewed U.S. China trade tensions, and on expectations of U.S. rate cuts. Silver also reached a new high. As of 10:50 am, spot gold had risen 2.1%, to $4,099.55 an ounce. After hitting a new record of $4,103.58 at 1450 GMT ET, gold prices rose 2.1% to $4099.55. U.S. Gold Futures for December Delivery rose 3% to 4,120.10. Gold prices have risen 56% in the past year, and last week they reached the $4,000 mark for the first. This is due to factors such as geopolitical uncertainty, economic concerns, and expectations of U.S. rate cuts. Central bank purchases are also a major factor. Jeffrey Christian, managing partner of CPM Group, said that gold and silver prices rise when investors become concerned about the current state of the economy or politics. Donald Trump, the U.S. president, reignited the trade tensions between China and the United States on Friday. This ended an uneasy truce that existed between the two world's largest economies. While traders price in a 97% chance of a Federal Reserve rate reduction in October, and a 100% probability for December. Gold is a non-yielding investment that tends to perform well in environments with low interest rates. Bank of America analysts and Societe Generale expect gold to hit $5,000 by 2026. Standard Chartered's forecast has been raised to $4,488 on average next year. Standard Chartered Bank's global head of commodities research, Suki Cooper said: "This rally is strong, but a short-term correction will be better for a long-term trend." Spot silver increased 3.3% to $51.95, reaching a record high earlier in the session of $52.07. This was boosted by the same factors that supported gold and tightness on the spot market. Technical indicators indicate that both gold and silver are overbought. The relative strength index (RSI), which measures the relative strength of a currency, is 80 for gold. Palladium rose 5.4% to $1.482.00, while platinum gained 4.6%. (Reporting from Sherin Elizabeth Varighese and Pablo Sinha in Bengaluru, Additional reporting by Kavya Baliaraman; Editing and Joe Bavier by Alexander Smith and Joe Bavier)
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EU legislators back further reductions to the sustainability law
The European Parliament’s Legal Committee on Monday supported plans to further reduce the EU's Corporate Sustainability Law, which has been criticized by companies who say that complying with these rules would hinder European industries' competitiveness. Last year, the European Union adopted the Corporate Sustainability Due Diligence Directive (CSDDD), which requires companies to address human rights and environment issues within their supply chains or risk a fine of 5% global turnover. On Monday, the European Parliament’s Legal Committee approved proposals to limit the application of the regulations to only those companies with at least 5,000 employees and a turnover of 1.5 billion euros. CSDDD currently covers companies with at least 1,000 employees and a turnover of more than 450 millions euros. The committee also supported dropping the requirement that companies implement "transition plans" in order to align their activities with climate change goals. The EPP has always sought to simplify the rules and reduce costs for business -- even going beyond the original Commission proposal. "Our vote today will bring more predictability to our businesses in a world that is unpredictable," said Jorgen Warborn. He was the legislator who drafted and approved the text on Monday. The committee asked that the European parliament now begin negotiations with EU countries on final rules. The EU Parliament as a whole will decide whether or not to proceed with this request next week. It appears that some of the changes are already likely to be implemented. EU countries have said that they are in favor of changing the law so it only applies to companies with at least 5,000 employees. CSDDD is one of the most controversial parts of Europe's Green Agenda. Countries like the United States, Qatar and others have demanded changes, claiming that the EU has overstepped by imposing demands on foreign companies. TotalEnergies and other European companies have called on the EU to scrap the law completely, warning that it could harm the EU's economic ability to compete with foreign competitors. Investors and activists have reacted negatively to the move back on ESG regulations. They say that it undermines corporate accountability, and Europe's ability attract more investment towards climate goals. Some companies also have resisted. In an August survey conducted by the think-tank E3G with YouGov of 2,500 European company leaders, 63% said that they were in favor of large companies implementing a climate change plan. Only 11% disagreed. (Reporting and editing by Kate Abnett, Inti Lanauro)
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Mexico: Torrential rains and flooding cause at least 64 deaths, 65 missing
The government announced Monday that the torrential rains which ravaged Mexico last week left 64 dead and 65 people missing. Landslides were triggered, power was cut in some municipalities, and rivers burst through their banks. Mexican authorities have sent thousands of personnel to clean up, evacuate and monitor the areas most affected by last week's rains in Gulf Coast states and Central States. Laura Velazquez is the national coordinator for civil protection. She said that Hidalgo, along with Veracruz was the worst affected state, with 29 fatalities and 18 missing persons reported in Veracruz and 21 deaths and 44 missing persons in Hidalgo. Authorities said that electricity was cut for five municipalities in Mexico, but it has now been restored to a large extent. (Reporting Ana Isabel Martinez, writing Stefanie Eschenbacher, editing Mark Heinrich).
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LMEWEEK - Trafigura CEO minimizes AI and defence role in copper demand
The CEO of the trading house Trafigura stated on Monday that traditional applications of copper will continue as the largest part of the demand for the metal in the coming decade. This is not data centres or the defence industry. Richard Holtum, speaking at the LME Week in London, noted that artificial intelligence (AI), defence spending and metal demand are "buzzwords". He said that consumer demand will "dwarf three times" the AI demand for copper this year. Holtum, in a conversation with Matt Chamberlain, CEO of the London Metal Exchange said: "The amount that copper goes into air conditioning is more than what copper will go into data centers this year." Holtum stated that 90% of the copper demand we will see in the coming 10 years is from traditional sources such as infrastructure, construction, urbanisation and consumer goods. CRU, a consultancy, expects the copper demand in data centres to increase from 78,000 tonnes in 2020 to 260,000 tons this coming year. Holtum stated that although the new applications will add significant demand to the airwaves, "the amount that AI and defence gets in relation to the actual demand" is slightly disproportional. A spokesperson for Trafigura said that the company estimates AI copper demand to grow by 70,000 tons per year in 2025, while consumer durables, which are mainly shipped to emerging markets, will increase demand by 250,000 tons. Trafigura predicts that AI is expected to add one million tons of demand for copper over the next decade. (Reporting and additional reporting by Eric Onstad, editing by William Maclean & Tomaszjanowski).
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On the back of trade fears and rate cuts optimism, gold and silver are at all-time highs.
Gold reached a new record high on Monday as investors flocked to safe-haven investments amid renewed U.S. China trade tensions and the expectation of U.S. rate cuts. Silver's rise mirrored that of gold, reaching a new high. As of 10:04 am, spot gold had risen 1.9%, to $4,093.39 an ounce. After hitting a new record of $4,096.35/oz. U.S. Gold Futures for December Delivery surged 2.8%, to $4113.40. Prices are rising due to concern over the state of the world Gold and silver prices rise when investors become concerned about the economic or political state of the world. Jeffrey Christian, managing director of CPM Group said that the expectation of U.S. rate cuts is also driving prices up. Donald Trump, on the geopolitical side, reignited tensions between China and the United States last Friday, breaking a tense truce that existed between the two world's largest economies. The traders are now pricing in 97% of the probability that the Federal Reserve will cut rates by 25 basis points in October, and 100% for December. Gold is a non-yielding investment that tends to perform well in low interest rate environments. The price of gold has increased 56% in the past year. It reached the $4,000/oz mark for the first week last week. This was boosted by geopolitical uncertainties and economic uncertainty, as well as expectations that the U.S. will cut interest rates and the robust central bank purchases. Standard Chartered's forecast for next year is $4,488/oz, up from the average of $4,488/oz that Bank of America, Societe Generale and Bank of America have previously predicted. Standard Chartered Bank's global head of commodities research, Suki Cooper said: "Given that there has been a carousel in drivers and the short-lived dips, we believe this rally is still going strong, but a correction near-term would be better for a long-term uptrend." Spot silver increased 3.3% to $51.91/oz. It had reached a record of $52/oz in an earlier session. This was boosted by the same factors that supported gold and tightening spot markets. Goldman Sachs stated on Sunday that it expects the silver price to continue rising in the medium-term, due to private investment flows. However, they warned of increased volatility near-term. Technical indicators indicate that both gold and silver are overbought. The relative strength index (RSI), which measures the relative strength of a metal, is 80 for gold. Palladium rose 4.3%, to $1.465.97, while platinum gained 4%, to $1.651.20. (Reporting from Sherin Elizabeth Varighese and Pablo Sinha in Bengaluru, with additional reporting by Kavya Baliaraman. Editing by Joe Bavier.)
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Israel's Katz: Hamas failing to deliver four hostages dead would be a 'failure of commitments'
Israel Katz, Israel's Minister of Defence, said Monday that the announcement by Hamas militants to deliver four Israeli hostages dead is "a failure to meet commitments". Katz stated in a blog post on X that "any delay or deliberate avoidance of payment will be considered a grave violation of the contract and we will respond accordingly." According to the agreement, within 72 hours after the military redeployment all 48 hostages must be freed from the Gaza Strip. This includes 20 known alive and 28 dead. Hamas has previously stated that the recovery of bodies from some hostages could take longer because not all burial locations are known. (Reporting and editing by Menna al-Din, Jaidaa taha, and Alison Williams).
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What is causing India's silver shortage this holiday season?
India's silver prices are significantly higher than global averages, as India is the world's largest consumer of precious metals. This is due to the soaring demand for the metal from investors. Exchange-traded funds with physical backing have suspended new subscriptions after the premium jumped up to 10%. Jewellers struggle to meet the strong demand for silver ahead of Diwali - the Hindu festival when purchases of the metal are traditionally high. Why is there a shortage of silver? The global silver demand has been outpacing supply over the last four years. This is a result of the five-year surplus that was produced. Silver production will still be unable to keep up with demand in 2025 as 70% of it is produced by mining other metals. This limits the ability to respond quickly to price changes. Despite the shortage of supply, demand for industrial products, particularly in renewable energy and high tech sectors, continues to rise. The structural deficit has been exacerbated by the large investment in physical ETFs and coins. Prices have also reached new highs. Silver shipments into the United States have increased since its inclusion on a draft U.S. Critical Minerals list in September. Why is India being badly affected by the SILVER shortage? India is the largest consumer of the metal. It uses it in silverware, jewellery and coins. Bars are also used for industrial purposes, from solar energy to electronic devices. More than 80% its demand is met by imports. Silver imports dropped by 42% in the first eighteen months of 2025 to 3,302 tonnes, but investment demand, particularly from ETFs rose to record highs. This surge consumed the excess imported in 2024. Now, additional overseas shipments are needed to meet this shortage. Why is India unable to import large quantities of silver? Normal circumstances would encourage Indian banks to increase imports in order to benefit from the large cash premium. The physical market has tightened in major trading centers due to a combination of factors including limited supplies coming from the main producing countries, a strong industrial demand and high investment, as well as logistical bottlenecks. Lease rates in London have increased by more than 30%. WHY HAVE INDIAN ETFS SUSPENDED NEW SUBSCRIPTIONS? In September, silver ETFs experienced a record inflow. This trend continued through early October. According to regulatory rules, physical backed ETFs are required to hold the subscribed silver amount in physical form. This is typically purchased from bullion dealers and banks. When they attempted to purchase silver last week, however, they had to pay high premiums. These premiums increased the acquisition costs for new subscribers. ETFs temporarily suspended subscriptions to protect investors from paying high prices. How are other companies adjusting to the silver shortage? Silverware is scarce, and manufacturers are unable to produce it. Coins and bars, popular gifts for the holidays, are also at a premium. Investors are expecting higher prices and few people want to sell their old scrap. This is keeping the supply of scrap tight. (Reporting and editing by Mayank Bhardwaj, Jan Harvey, and Rajendra Jadhav)
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OPEC maintains oil demand forecast, pointing to smaller supply deficit in 2026
OPEC did not change its forecasts on Monday for the relatively high growth in global oil demand this year and the next. It also implied that the oil market would see a smaller deficit of supply by 2026, as the OPEC+ group continues to increase production. OPEC+ has added more crude oil to the market since the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other allies have decided to undo some production cuts faster than originally planned. This extra supply has led to concerns of an oil surplus, and has weighed down on the price of crude this year. In a report released on Monday by OPEC, the group said that global economic growth was continuing to be solid. OPEC reported that OPEC+ increased crude production by 630,000 barrels a day in September to 43.05 millions bpd. This was due to its previous decisions to increase the output quotas. According to a report, if OPEC+ continues pumping crude oil at the same rate as September, the global market will experience a 50,000 bpd deficit. The report from last month suggested that OPEC+ would have a 700,000 bpd deficit in 2026 if they continued to pump at the rate of August. (Editing by Kirsten Doovan)
OPEC predicts a smaller oil deficit in 2026 as OPEC+ pumps out more
OPEC's report on Monday showed that the world oil supply will closely match demand in 2020 as OPEC+ increases its production. This is a significant change from last months outlook which predicted a shortage of supply by 2026.
OPEC+ has added more crude oil to the market, after the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies decided to unwind certain output cuts faster than originally planned. This additional supply has led to concerns about a surplus, and weighed down on oil prices in this year.
In its monthly report, OPEC stated that the global economy is continuing to grow at a solid rate. It also maintained its forecasts of 1.3 million barrels of oil per day for this year and a slightly higher rate in 2026.
"The robust economic dynamics in the third-quarter of 2025, combined with upward revisions in second-quarter growth in 2025 in the U.S., Japan, and India, as well strong data from China and India, reinforce a steady global growth outlook," OPEC stated.
OPEC DEMAND PREDICTIONS EXCEED INDUSTRY
OPEC's forecasts of demand are higher than industry estimates because it anticipates a slower transition to energy than other forecasters such as the International Energy Agency. OPEC's forecast also indicated a deficit in supply in 2026 in contrast with the IEA, and many analysts.
A large deficit makes it easier for OPEC+'s plan to pump additional barrels in order to regain market shares. The Monday report revealed that the gap between OPEC's forecast and those of other analysts is closing.
In its report, OPEC stated that OPEC+ increased crude production by 630,000 barrels a day in September to 43,05 million bpd. This was in line with its previous decisions to increase its output quotas. The report states that the demand for OPEC+ oil is expected to be 43.1 million bpd by 2026. If the group continues to pump at the rate of September, the global market will experience a 50,000 bpd deficit.
The report from last month suggested that OPEC+ would have a 700,000 bpd deficit in 2026 if they continued to pump at the rate of August.
Oil traded slightly above $63 per barrel on Monday after falling to a 5-month low last weekend, partly due to fears about a glut.
Oversupply LOOMing
The revised outlook reduces the gap between OPEC and several banks' projections, which predict that supply will exceed demand by 2026.
In September, a poll of analysts suggested that the market would face a surplus of 1.6m bpd by 2026. This was due to the rising production of OPEC+ producers and non-OPEC ones, including the United States and Brazil.
ExxonMobil, the U.S. energy giant, believes that oversupply will be a problem in the short term. Darren Woods, the company's chief executive, said that the oil market will be tighter in the medium- to long-term.
The IEA's
Latest Report
The forecasts suggest that the supply of oil and gas may be greater than demand by 3.3 million barrels per day in 2026. The agency that advises industrialised nations is expected to update their forecasts on February 2. (Editing by Kirsten Doovan and Louise Heavens).
(source: Reuters)