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Gold falls on US-China Trade Talk Hopes; traders focus on Fed policy
The gold price fell on Wednesday, as investors awaited the Federal Reserve policy meeting that would be held later in the afternoon. As of 0225 GMT, spot gold was down by 1.2% to $3,388.67 per ounce. The metal rose by nearly 3% the previous session. U.S. Gold Futures dropped 0.7% to $3 397.70. "Gold is pulling back amid broad-based "risk-on" movement across markets... This pro-cyclical setup could echo optimism amid signs that the U.S. has begun real trade negotiations with China," said Ilya SPivak, Tastylive's head of global macro. This weekend, U.S. Treasury secretary Scott Bessent will be in Switzerland for talks with chief Chinese economic official He Lifeng. Last month, both countries imposed tariffs of equal value on each other. This triggered a trade conflict that fueled fears of global recession. On Tuesday, U.S. president Donald Trump announced that he will be reviewing potential trade agreements over the next two week to decide which to accept. Later in the day the Federal Open Market Committee meeting is expected to be the focus of the market, as the U.S. Central bank will likely hold rates steady. Spivak said that the FOMC would remain vague in order to maintain as much flexibility as is possible when it comes to determining what impact this trade war may have on growth and inflation. The traders expect 80 basis point rate cuts in this year starting in July. The remarks of Fed Chair Jerome Powell will also provide clues as to the timing of any future rate cuts. In an environment of low interest rates, gold, which is traditionally viewed as a hedge to economic and political uncertainty, thrives. Silver spot fell by 0.9%, to $32.93 per ounce. Platinum dropped 0.6% to $979.07 while palladium was down 0.4% at $970.28. (Reporting and editing by Sumana Nady and Sonia Cheema in Bengaluru)
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Sino-US trade talks and Chinese stimulus have boosted iron ore prices to a 2-week high.
Investor sentiment was boosted by China's recent stimulus measures, and the hopes that trade frictions between the two world's largest economies will be eased. As of 0154 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.78% higher. It was 711 yuan (US$98.47) per metric ton. Earlier in the session, the contract reached its highest level since April 24, at 726 Yuan per ton. The benchmark June Iron Ore traded on the Singapore Exchange rose 0.81%, to $98.3 per ton. It had previously reached a peak of $99.85. The People's Bank of China will reduce the amount of cash banks are required to hold as reserves, for the first time in 2025. This is part of a policy designed to boost the economy during a prolonged trade war with the United States. The magnitude of the stimulus package somewhat exceeded our expectations, and that is the main driver of the price strength, said an iron ore trader in Singapore. He requested anonymity because he was not authorised to talk to the media. Prices were also supported by positive signals about the possible easing of global trade tensions. U.S. Treasury secretary Scott Bessent, and chief trade negotiator Jamieson Grer will meet China’s top economic official on Saturday in Switzerland. This could be a first step in resolving the trade war that is disrupting the global market. The benchmark steel prices on the Shanghai Futures Exchange have gained some ground. Rebar rose by 0.39%, while hot-rolled coils rose by 0.59%. Stainless steel also gained 0.67%. Other steelmaking ingredients listed on the DCE, however, posted losses due to weak fundamentals. Coking coal and a coke both lost 0.16 and 0.2% respectively. ($1 = 7.2208 Chinese yuan). (Reporting and editing by Amy Lv, Lewis Jackson)
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Metals prices remain tight as the market waits for US-China summit
Investors were waiting for a weekend meeting in Switzerland between U.S.-China trade officials to see if they could bring down the trade war. As of 1400 GMT, the benchmark copper price on London Metal Exchange (LME), was down by 0.1% at $9,533.5 per metric ton. Scott Bessent, U.S. Treasury secretary, told Fox News that he believes the goal is to de-escalate tensions. China's central banking governor announced Wednesday that, to support the economy in the midst of a long-running trade war with the U.S. the bank would, for the very first time, reduce the required reserve ratio for banks by 50%. On Tuesday, U.S. president Donald Trump announced that he will be reviewing potential trade agreements over the next two week to decide which to accept. A trader stated, "We have been eagerly awaiting the advancement of relations between the U.S.A. and China as we had hoped to see the potential agreement." Other London metals saw aluminium drop 0.1%, to $2.425 per ton. Zinc rose 0.1%, to $2.635, while lead fell 0.1%, to $1.921. Tin was up 0.1%, to $32,020, and nickel was unchanged at $15.700 a tonne. The Shanghai Futures Exchange's (SHFE) most traded copper contract rose by 0.7%, to 78.220 yuan (10.759) per tonne, thanks to rapidly declining stocks that the SHFE monitors. SHFE aluminium fell by 0.9%, to 19,680 Yuan per ton. Zinc dropped 0.3%, to 22,350 Yuan. Lead declined by 0.2%, to 16,670 Yuan. Nickel rose 0.1%, to 124650 Yuan. Tin was up 0.4%, to 261,490 Yan. (Reporting and editing by Mrigank Dahniwala; Violet Li, Lewis Jackson)
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Lake Resources' shares in Australia surge after launch of strategic review
The shares of Australia's Lake Resources soared by more than 9% after the company announced a strategic review on its Kachi lithium project, located in Argentina. The lithium developer believes that the asset is undervalued, even though the long-term demand has increased for battery metals after a recent drop in the price of lithium carbonate. The price of lithium carbonate fell to its lowest level since August 2021 last month, due to a prolonged decline in demand from the electric vehicle industry. The benchmark index rose 0.1% to 0050 GMT, while Lake's stock is on course for its largest one-day gain since April 24. The company is considering a number of options, including the sale of a stake in the project or a possible sale or merger. The Kachi Lithium Brine Project is the largest independently-funded project in South America's "lithium triangular" region, with resources totaling more than 10.6 million metric tonnes of lithium carbonate. Lake Resources stated that recent examples of companies with Argentine Lithium projects receiving proposals far exceeding their current market valuations has influenced the decision to explore alternative strategic options. The review is more than five-months after the company agreed to sell its non-core assets of lithium brine in Argentina for nine million dollars. Reporting by Nichiket in Bengaluru, editing by Mohammed Safi Shamsi & Alan Barona
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US futures rise on China trade talks
U.S. stocks futures rose and Asian currencies rose as investors welcomed the news that a top-level meeting between U.S. officials and Chinese officials is scheduled for this weekend in Switzerland. This could be a chance to calm down the trade conflict. Scott Bessent, U.S. Treasury secretary, said on Fox News that he believes the goal is to de-escalate. S&P futures gained about 0.9%. This was a recovery from a drop in the cash session, when U.S. president Donald Trump seemed to have struck a more confrontational note. The stock markets of Japan and Australia have both edged up. The dollar increased a bit against the yen, but declined against other Asian currencies. The offshore yuan is close to reaching a six-month-high and the Australian Dollar has reached a five month-high and just above 65 U.S. Cents. Ray Attrill, head of Foreign Exchange Research at National Australia Bank, said: "It seems that both sides are willing to reach out and meet on a high-level. I wouldn't have thought it could be anything other than positive." It's positive for Asian foreign exchange in general. Asian currencies have been gaining on the dollar lately, led by a flying Taiwan Dollar, on speculations that a weaker greenback is part of Trump’s trade agenda, and as large investors reduce their dollar positions built up over years of purchasing U.S. assets. Gold dropped 1%, while oil rose 1%. Benchmark 10-year Treasury rates remained at 4.3238%. Later on Wednesday, the U.S. Federal Reserve will meet to set interest rate cuts. The markets indicate that there is almost no chance for a move to be made on Wednesday, and only 33% of a reduction in June. This is down from 64% one month ago. India and Pakistan are nuclear-armed neighbors and the fighting has been intense for more than 20 years. India fired gunfire and shells over the border in Kashmir, while India also hit targets in Pakistan. Attrill of NAB said that it would add another layer to the geopolitical tensions and likely cause India's currency to fall. The euro was supported above $1.13, with German conservative leader Friedrich Merz being elected chancellor after his alliance with Social Democrats suffered a shock defeat in the initial round.
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Oil prices rise on signs that Europe and China are increasing their demand and US production is decreasing
Prices rose on Wednesday as buyers returned to the market after the prices had fallen to new lows the previous week. Brent crude futures rose 37 cents a bar, or 0.6% to $62.52 a bar by 1215 GMT. U.S. West Texas Intermediate Crude was at $59.53 a bale, up 44 cents or 0.74%. The benchmarks fell to a 4-year low following OPEC+’s decision to accelerate output increases. This stoked concerns of an oversupply, at a time that U.S. Tariffs are causing concern about demand. The lower oil prices of recent weeks have led some U.S. companies like Diamondback Energy, Coterra Energy, and others to announce they will cut some rigs. Analysts say that this should increase prices over time by reducing production. Daniel Hynes, senior commodity strategist at ANZ Bank, believes that the latest announcements suggest that output will decline in the months to come. Last month, we warned that the falling oil prices and decreasing drilling activity could lead to a fall in U.S. output. Market sources cited American Petroleum Institute data on Tuesday to report that crude stocks dropped by 4.5 millions barrels during the week ending May 2. The U.S. Government will release data about stockpiles at 10:30 am ET. ET (1430 GMT). The average expectation of the analysts polled is that U.S. crude stock will decline by 800,000 barrels for last week. The signs that demand was improving also helped to support prices. China's consumers increased their spending on May Day and when the market returned from the holiday. Analysts expect companies in Europe to report a 0.4% increase in their first-quarter earnings. This is an improvement from the 1.7% decline analysts expected just a week earlier. As tariffs threaten the economy, it is expected that the Federal Reserve will leave interest rates unchanged Wednesday.
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Lynas CEO: Company is looking to buy rare earths in Malaysia and Brazil
Amanda Lacaze, CEO of Lynas Rare Earths, said that the company is looking at potential purchases of rare-earth deposits in Malaysia and Brazil. It also plans to work with developers who are still in the early stages to bring their mines on line. She said that the Macquarie Australia Conference, held in Sydney, was a forum where she discussed how to grow the world's second largest producer of rare earths outside China. She said that Lynas' processing facilities in Malaysia have a similar geology to many other parts of Southeast Asia. This includes Myanmar. Myanmar is an important supplier of rare earths to China. Yes, there are deposits in Brazil. Lacaze replied, "Yes we are looking into them." Lacaze stated that Lynas is open to working with companies in Malaysia to "put our script into action". Would we like to see these developed? Yes. We will facilitate this development. "Yes," she replied. A weekend election in Australia has brought back the Labor government, which had implemented a policy of stockpiling critical minerals like rare earths. Lacaze said that this is a "uneconomical" policy. She added, "You should focus on building a successful and strong business. One that relies on government funding for construction and then government financing to produce is likely uneconomic by definition." The administration of U.S. president Donald Trump has focused on the development of rare earth deposits. Last week, they signed a supply agreement with Ukraine. Rare earths can be used for industrial magnets as well as in certain defence applications. Lacaze explained that new supplies can be difficult to develop, and take years. "I want to run an advertisement in the Washington Post that says, 'Want Rare Earths?" She said, "Call 1800 Lynas." (Reporting and editing by Christine Chen, Melanie Burton, Christopher Cushing).
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Sources say that a major refinery in Venezuela has restarted a processing unit after an absence of 365 days.
Four sources said that Venezuela's Cardon refinery, the second-largest in Venezuela, has restarted a fluid catalytic reactor which was out of service due to a breakdown and a lack of raw materials for over a year. One source said that the 88,000 barrels per daily (bpd), or FCC cracker was processing 26,000 barrels per day on Tuesday. Meanwhile, a similar unit in Amuay, the largest refinery of the country, was processing 38,000 barrels a day. Sources said that the Paraguana Refining Center includes Amuay as well as Cardon refineries. On Tuesday, it processed about 187,000 barrels per day, or 20% of its installed capacity, which is 955,000 barrels per day. Cardon was operating one crude distillation unit, which processed about 50,000 barrels per day, against a capacity installed of 310,000 barrels per day. Source: Amuay was only processing 137,000 bpd crude oil, when it had a capacity to process 645,000 bpd. The Venezuelan state oil company PDVSA has not responded to a comment request immediately. According to a source, the refinery complex receives crude oil from upgrading companies Petropiar and Petromonagas, as well as the eastern coast of the oil-rich Zulia State. (Reporting and editing by SonaliPaul)
As Trump talks about a deal, Russian forces advance onto Ukraine's vital minerals
Russia, just like U.S. president Donald Trump, is envious of Ukraine's natural resource - its forces are now closing in on an enormous lithium deposit.
Trump told Ukrainian President Volodymr Zelenskiy that he wanted Kyiv's minerals to be handed over in exchange for U.S. support.
Vladimir Putin is gaining control over Ukraine's wealth as Washington and Moscow prepare to negotiate an end to the war that has lasted three years.
According to data obtained from Ukrainian military blog Deep State, Russian forces have seized more than a fifth (including rare earth reserves) of Ukraine and are now less than four miles away from the Shevchenko Lithium Deposit. They are advancing from three angles.
Lithium has become a highly sought-after global resource due to its wide range of applications, from electric cars to mobile phones. According to U.S. estimates, the Ukraine has about 500,000 tonnes of lithium reserves, while Russia has twice that amount.
Shevchenko lies in Donetsk. This is one of the four Ukrainian regions Moscow claims as its territory. Kyiv, and other Western powers, claim that this annexation is illegal. The deposit is one of Ukraine's largest lithium deposits and lies at a depth which would allow for commercial mining.
Konrad Muzyka of Rochan Military Consultancy in Poland said that given the current battlefield pace, the Russians are likely to reach this area within the next few weeks. He had just returned from Ukraine after a research visit.
He stated that the Russian strategic goal was to seize the mineral wealth of Ukraine, even though it wasn't the main war objective.
He added that "Ukrainian Commanders" he spoke with said they could see that the Russians' objective was to capture natural resources.
Vladimir Ezhikov is a Russian official who was appointed in Donetsk. He said that Rosatom's mining division has expressed interest in the Shevchenko Deposit, but that Russia’s Ministry of Natural Resources would issue a mining license when it came time.
He told the local news agency that it was difficult to predict the exact date of the development, because the deposit is currently in a "grey zone" and military action would not allow for its development.
This deposit will find its licensee. "There will be lithium mining and investment, and we'd love to see processing here as well."
'RUSSIA IS Winning the War'
Since months, Russian troops have gained ground in the East. They are investing huge resources in an unrelenting assault.
In an interview with this month, Zelenskiy unfurled on his desk a map that was once classified. It showed a wide strip of land marked in the east as having rare earths. About half of the map appeared to be on Russia’s side of current frontlines.
The Ukrainian leader who rejected a draft of a mineral deal with Trump because it did not contain enough security guarantees has stated that he would like to discuss with Trump the fate of the resources on Russian controlled territory.
He claimed that Russia was well aware of the critical resources in Ukraine, thanks to Soviet-era surveys which were sent back to Moscow after Kyiv's independence in 1991.
Few reliable independent estimates exist about the proportion of Ukraine's mineral resources that Moscow controls. It is a fact that Ukraine has lost control over its mineral wealth.
Vasily Koltashov is an economist and political expert who said that Trump’s desire for a large minerals deal would be academic if Ukraine loses the war.
This month, he said on Russian state TV that "it's not him or his appetite for rare-earth metals" who will decide what. "Russia is winning on the battlefield."
Capturing Ukrainian natural resources is also a prize for many Russians in this conflict that marks its third anniversary next month.
Denis Pushilin - the top Russian-backed official of Donetsk - sparked a flood of headlines last month in the Russian media when he claimed incorrectly that the Shevchenko settlement had been taken, confusing this with another settlement by the same name elsewhere.
The government newspaper Rossiyskaya Gazeta reported, "The largest lithium deposit in Ukraine is now under Russian control."
"MINERALS BEONGE TO RUSSIANS"
The Kremlin has not responded publicly to Trump's attempts to lock Ukraine in a deal which would allow the U.S. to access Ukraine's natural resources and to provide $500 billion to cover U.S. assistance that has already been provided.
Dmitry Peskov, Putin's spokesperson, said that with a Putin-Trump meeting on the horizon and U.S./Russian talks to reset ties and consider how to end the ongoing war, the American president wants Ukraine to pay any future U.S. aid rather than continue receiving it for free.
Maria Zakharova is a spokesperson for the Russian foreign ministry. She has been more direct in her criticism of Zelenskiy, accusing him of offering Washington resources that he does not control anymore due to shifting frontlines. She also made a comparison between Trump's desire to take Ukraine's mineral riches and the Nazis' exploitation of the country in World War Two.
She said at a press conference this month that during the Second World War the Nazis seized the territory of former Soviet Ukraine and began plundering its national economy. They stole cattle and black earth from Ukraine's territory. All this is taking place non-violently because the Kyiv government is giving everything away.
Both Kyiv, and Washington, have rejected the accusations that Washington is unfairly trying to exploit Ukraine's wealth of natural resources. They say a deal on these resources is in both their commercial and security interest.
Russian war bloggers, nationalists and other Russians are not happy with what they see as Trump's grab for resources.
Starshe Eddy, a blogger on Telegram, told his approximately 600 000 followers: "There's only one thing to say about this." Don't open up your mouth to eat someone else's food. The minerals in Ukraine belong to Russia and no one else. Reporting by Andrew Osborn, Editing by Pravinchar
(source: Reuters)