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Gold falls as the dollar strengthens on Fed rate caution
Gold prices fell on Friday as the dollar strengthened on the uncertainty about further Federal Reserve rate reductions, but the bullion is still on track for its third consecutive month gain. As of 0700 GMT, spot gold was down 0.3%, at $4,011.60 an ounce. Bullion is up 4% this month. U.S. Gold Futures for December Delivery rose by 0.1%, to $4.021.20 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that the Fed Chairman's hawkish stance this week did not do gold any favors. The prospect of a December rate cut is now much less certain than previously believed, which has helped boost the dollar and made things more difficult for gold in terms of yield. Dollar index nears its highest level for three months against rival currencies, making gold more expensive to other currency holders. The Fed cut rates on Wednesday by 25 basis points, for the second consecutive time in this year. This brings the overnight benchmark rate down to a range of 3.75% - 4.00%. After Jerome Powell’s comments, traders reduced their bets on another rate reduction at the next policy meeting scheduled for December. According to CME Group’s FedWatch tool, markets now price in a probability of 74.8% for a 25-bp reduction compared with 91.1% a week earlier. Donald Trump, the U.S. president, announced on Thursday that he has agreed to reduce tariffs against China in exchange for Beijing crackingdown on illicit fentanyl, resumed U.S. soya bean purchases, and kept rare earths exports flowing. Gold was discounted in India this week for the first seven-week period, and a drop in prices boosted activity in other Asian hubs. Silver spot was up 0.4% to $49.1, platinum 0.6% to 1,621.60, and palladium 1.2% to $1462.43. (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu, Mrigank Dhaniwala, Harikrishnan nair)
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Swiss National Bank profits shine with gold price surge
The Swiss National Bank announced a profit of 27,93 billion Swiss Francs ($35.22billion) for the third quarter, the central bank reported on Friday. This was boosted by the rising value of the gold reserves. Between June and September the central bank reported a gain in gold valuation of 14.33 billion Swiss francs, compared to the gain of 4.41 billion francs last year. According to UBS calculations, the SNB's average quarterly profit from gold over the past 10 years was less than two billion francs. GOLD GAINS FROM SAFEHAVEN DEMAND Gold prices have increased by 53% in the past year, as investors sought to hedge against political and geopolitical uncertainty. Gold has become more appealing due to the weakening of the U.S. Dollar. Rate cuts by the U.S. Federal Reserve also reduced the yield on other assets that are less risky, such as U.S. Treasuries. The SNB reported that it had also made a profit of 13,63 billion francs during the third quarter from the foreign currency positions it held, as well as the bonds and shares it purchased with the foreign currencies it bought. The central bank increased its profit for the third quarter to 27,93 billion francs from 5,67 million francs a year ago. Florian Germanier, economist at UBS, said: "It is very unusual that the SNB makes so much profit on gold but it reflects the huge price increases gold has seen this year." The profit is simply a side effect from holding an asset that is considered to be the ultimate safe-haven, and which the SNB must hold in order to diversify their holdings and carry out monetary policies.
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China's steel production will fall below 1 billion tonnes in 2025, but the industry imbalance persists
China's steel production will drop below 1 billion tons by 2025. This is on track to meet government pledges to reduce production. However, a mismatch between supply and demand still exists. The world's biggest producer of crude steel has seen its output fall since 2020. However, it was still over 1 billion tons by 2024. Beijing promised in March that it would continue to cut steel production this year, to restructure a sector plagued by excessive capacity. A prolonged downturn on the steel-intensive real estate market has led to a shortage of steel. The steel consumption in 2025 fell by 5.7%, while the crude steel production declined by 2.9%. At a briefing for reporters, Jiang Wei (Vice Chairman of China Iron and Steel Association) said that consumption this year will fall by a fifth consecutive year. China's steel sector will have its best year since the 2022, with many listed companies reporting significant increases in their third-quarter net profits. Steel prices have been halted by a surge in exports, which has partially offset a faltering domestic demand. However, the influx of cheap Chinese steel threatens to trigger broader protectionist reactions worldwide. Steel billet, or lower-value blocks of semi-finished steel, has been exported three times more than in the same period of 2024. This trend, the steel association warned earlier this year, could deter the industry from upgrading and is already increasing the price of steelmaking materials, especially iron ore. Beijing has committed to carbon neutrality in 2060. To achieve this target, the steel industry will need to invest approximately 20 trillion yuan. (Reporting and editing by Christian Schmollinger, Kate Mayberry and Amy Lv)
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Adani Power is the lowest bidder in India's Assam State for a 3.2 GW coal auction
Adani Power, an Indian company, has been selected as the lowest-bidder in a tender for the supply of coal power to the northeastern Assam state. The announcement was made during the post-earnings conference call. Adani Power said that the bid had been approved by the state's electricity commission and it expects to receive formal notification of the award soon. The tender is a part of an overall pipeline of more than 22 GW in thermal power bids from states such as Rajasthan, Uttar Pradesh Gujarat and West Bengal. They are seeking to secure long-term capacity due to rising demand and intermittent renewable production. Adani Power announced in August that it would invest $5 billion into two coal-powered power plants. The company plans to increase capacity from 18 GW to 42 GW by 2032. 8.5 GW of that is already locked in under long-term contracts. Adani Power has said that it will invest approximately 2 trillion rupees over a long period of time in the expansion plan, with the 12 GW expected to be commissioned before the fiscal year 2030. A company executive revealed that the power firm had pre-ordered the boilers, generators, and turbines needed for the expansion. Deliveries will be staggered over the next 38 to 75 months. Separately Adani Power reported that its power dues to Bangladesh had narrowed down to 15 days' supply. This compares to $900 million last May and almost $2 billion at the beginning of this year. Sethuraman N.R., Sonia Cheema (Reporting)
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Japan's Kansai Electric shares rise 5% after forecasting higher profit, dividend
Kansai electric power Co shares rose 5% on Friday in Tokyo, outperforming other markets, after the company's largest nuclear power utility raised its profit forecasts and promised generous returns to shareholders. Kansai, in which U.S. activist investor Elliott became a large minority shareholder last month, lifted its annual profit forecast by 22% to 360 billion yen ($2.4 billion) on Thursday, on higher electricity demand and stronger-than-expected earnings at its fuel trading unit. It also raised its full-year forecast dividend to 75 yen from 60 yen, and promised that the payout ratio would be 25-35% starting in the next fiscal. Kansai shares rose 5.2% to 0512 GMT. This was higher than the Nikkei Index, which had risen 1.9%. Elliott announced its ownership of the stock on September 10. The share price has increased by around 7%. Elliott has been a shareholder in Tokyo Gas since November 19, last year. Shares are 42% higher today. Elliott wants both companies to maximize shareholder value through the sale of non-core assets. This includes their massive real estate portfolios. Sources familiar with the situation said that Elliott had earlier asked Kansai for a 100-yen dividend increase. Tokyo Gas has raised its full-year profit estimate to 194 billion Japanese yen from 131 billion, due to the fact that it expects to earn 30.7 billion yen from property sales. Kansai sees real estate as an essential business that it wants to expand, according to a Kansai executive.
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Japan's Seven & i is looking for M&A and partnership deals to fuel growth
Yoshimichi M. Maruyama, chief financial officer of Japan's Seven & i, said that the company is working on a number of initiatives including potential M&A and partnership deals aimed at achieving substantial growth. 7-Eleven, the Japanese retailer that owns convenience stores in Japan, wants to show investors how it can grow after Canada's Couche-Tard pulled out of a $46 billion bid offer last July. Seven & i said that it would pursue a listing for its North American convenience-store subsidiary in the second half 2026 and buy back shares worth about 2 trillion yen (13 billion dollars) through fiscal year 2020. Maruyama told investors at a recent investor briefing that "we are not planning to sell a large number of shares". He said that the company would still buy back shares even if there was no offering. Seven & i shares have fallen by about a fifth in the last year. TAG EUROPEAN EXPANSION The retailer said that it also aims to make Europe a "fourth main pillar of growth", alongside Japan, North America, and Asia-Pacific. Currently, it has 365 shops in Scandinavia. Ken Wakabayashi is the CEO of 7-Eleven International. He said that Europe, outside Scandinavia, was a blank space for 7-Eleven. The retailer also plans to enter markets with high growth potential in Africa, the Middle East and Latin America.
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Morning Bid Europe- No tricks, but some treats for the markets
Ankur Banerjee gives us a look at what the future holds for European and global markets Investors are unsure about the direction of global monetary policy in the near future, but a trade truce reached between the top two economies in the world has calmed nerves. Meanwhile, a mixed bag mega-cap earnings have kept the market in check. As the week began, there were signs that tensions between China and the U.S. had cooled. The Federal Reserve also delivered an expected rate reduction, but Chairman Jerome Powell warned that this could be the last cut in 2025. This helped to firm up the dollar. It is currently on track for a gain of nearly 2% for the month. The yen was hovering at its lowest level since Feburary, just below 154 dollars, which prompted some verbal scolding from Tokyo officials. As expected, the Bank of Japan kept rates unchanged on Thursday. However, markets interpreted Governor Kazuo ueda's comments as dovish despite his hints that an interest rate increase is still on the table. The Nikkei has benefited from the fall in the yen. It is down almost 4% for October. This was a huge boost to the Nikkei. It has surpassed another record and is now on track for a 16% gain for the month. That would be its best monthly performance since Jan 1994. The "Takaichi" trade in all its glory. The South Korean stock market, Kospi, has been the best performing in the world so far this year. It is expected to rise 20% in October. This will be the largest increase since January 2001. Artificial intelligence has been the focus of much excitement in the stock markets this year. Investors are still trying to get a better picture of the earnings season, which has so far been a mixed one. Amazon shares surged after cloud revenue rose to its highest level in almost three years. This lifted Nasdaq Futures and set up a successful Halloween for tech stocks. As businesses continue to invest in AI software, the online retailer has benefited. Apple is also expected to boost the market after it announced that its holiday quarter forecasts exceeded Wall Street's expectations. The following are key developments that may influence the markets on Friday. Economic events: October inflation figures for the eurozone and France, September retail sales in Germany
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Gold falls as Fed rate caution increases dollar, but is set to rise for 3rd month.
Gold prices fell Friday as the dollar strengthened on fears of further Federal Reserve rate reductions, but bullion is still on course for its third consecutive monthly gain. As of 0459 GMT, spot gold was down 0.4%, at $4,005.54 an ounce. Bullion is up 3.9% this month. U.S. Gold Futures for December Delivery remained at $4,018.10 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that the Fed Chairman's hawkish stance this week did not do gold any favors. The prospect of a December rate cut is now much less certain than previously believed, which has helped boost the dollar and made things more difficult for gold in terms of yield. Dollar index nears its highest level for three months, making gold more expensive to other currency holders. The U.S. Central Bank cut interest rates on Wednesday by a quarter percentage point, for the second consecutive time in this year. This brings the benchmark overnight rate down to a range of target of 3.75%-4.00%. After comments from Chairman Powell, traders have reduced their bets on the Fed cutting rates at its next policy gathering in December. According to CME Group's FedWatch, the markets now price in a probability of 74.8% for a 25 basis-point reduction from the Fed by December compared to a chance of 91.1% a week earlier. Donald Trump, the U.S. president, said that he and Chinese President Xi Jinping had agreed to reduce tariffs against China in exchange for Beijing crackingdown on illicit fentanyl trafficking. He also stated that the U.S. would resume its soybean purchases as well as continue exports of rare earths. Gold was discounted in India this week for the first seven-week period, and a drop in prices boosted activity in other Asian hubs. Silver spot was unchanged at $48.89 an ounce. Platinum was stable at $1,610.75, and palladium rose 1.5% to $1466.42. (Reporting and editing by Subhranshu sahu, Mrigank dhaniwala in Bengaluru)
US fears Nippon quote for US Steel could hit vital steel supplies
Nippon Steel's. proposed $14.9 billion takeover of U.S. Steel would develop. national security threats due to the fact that it might hurt the supply of. steel needed for crucial transportation, building and construction and. agriculture jobs, the U.S. stated in a letter sent to the. business and seen .
The letter also cited a global excess of inexpensive Chinese steel,. and stated that under Nippon, a Japanese business, U.S. Steel would. be less likely to look for tariffs on foreign steel importers.
The Committee on Foreign Investment in the U.S. (CFIUS) stated. in its 17-page letter sent on Saturday to Nippon Steel. and U.S. Steel, and initially reported , that. decisions by Nippon could cause a reduction in domestic steel. production capability.
CFIUS added: While U.S. Steel frequently petitions for. ( trade) relief, Nippon Steel includes plainly as a foreign. respondent resisting trade relief for the U.S. domestic steel. market.
The letter offered a first peek of the national security. grounds that the Biden administration might utilize as a basis for. its expected relocate to block the merger, even as the business and. numerous market professionals questioned the strength of the arguments.
By almost any procedure, the concerns identified by the. committee are not ones that would fall under the nationwide. security bucket, however quite plainly into two others:. Nationalistic trade protectionism and electoral politics, stated. Michael Leiter, a CFIUS legal representative in Washington, D.C. not involved. in the offer.
If the federal government is really worried about maintaining steel. supply here in the United States, the genuine option is not to. block this offer, however instead to use the CFIUS hammer to guarantee. that Nippon Steel makes and maintains such financial investments, he. added.
The deal has actually ended up being a political hot potato, with numerous. Republican politician and Democratic lawmakers voicing opposition to it. Vice President and Democratic presidential prospect Kamala. Harris stated on Monday at a rally in Pennsylvania, the swing. state where U.S. Steel is headquartered, that she desires U.S. Steel to stay American owned and run. Her Republican politician. competing Donald Trump has actually promised to obstruct the offer if chosen.
China looms big in the background of the trade concerns. described by CFIUS. According to the committee, China's. persistent usage of market-distorting federal government interventions. has permitted the country to unfairly get supremacy in the worldwide. steel market, as it exports substantial surplus steel that. synthetically decreases worldwide prices.
It also mentioned 2022 data that showed China produced about 54%. of overall global crude steel and was the largest exporter.
In a 100-page action letter seen and sent on. Tuesday, Nippon Steel stated it will invest billions of dollars to. preserve and increase U.S. Steel facilities that otherwise would. have actually been idled, indisputably permitting it to maintain and. possibly increase domestic steelmaking capability in the United. States.
Nippon likewise declared a guarantee not to move any U.S. Steel production capability or jobs outside the U.S. and would not. interfere in any of U.S. Steel's decisions on trade matters,. consisting of choices to pursue trade procedures under U.S. law. against unfair trade practices.
The deal, Nippon added, would develop a more powerful worldwide. rival to China grounded in the close relationship in between. U.S. and Japan.
Nippon even proposed a national security contract, targeted at. lightening CFIUS concerns, with promises that a majority of U.S. Steel's board of directors would be non-dual U.S. citizens,. including three independent directors approved by CFIUS to. supervise compliance with the contract.
Nippon is tossing a financial lifeline to U.S. Steel while. allowing it to stay led and handled by U.S. individuals with. government oversight, said Nicholas Klein, a CFIUS attorney with. DLA Piper. I would think that CFIUS might mitigate the risk of. reduction in steel production capability through supply guarantee. and other typical mitigation measures.
The committee, which reviews foreign financial investments for. nationwide security hazards, also sees danger occurring from Nippon's. growing presence in India, where production costs are much lower. than in the U.S.
Nippon Steel has no economic incentive to, and will not,. import Indian-origin ... steel into the United States to compete. with or weaken U.S. Steel, which would straight contradict. the basis for Nippon Steel's multi-billion dollar financial investment,. the business countered in their Tuesday letter.
(source: Reuters)