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Gold prices to suffer big loss this week despite global equity gains
Wall Street gained Friday as European shares rose to a fifth consecutive weekly gain, thanks to positive earnings that sustained the rally ignited by a U.S. China trade truce. Gold prices have suffered their largest weekly decline since November. Oil futures have seen a slight weekly increase, but are still relatively low. This has helped to support stocks and bonds. The MSCI index of global stocks rose by 0.39%. A University of Michigan study showed that U.S. consumers' sentiment continued to deteriorate in May, as inflation expectations for the next year increased. Households remained worried about the impact of President Donald Trump’s aggressive and often erratic trading policy. The yields on U.S. Treasuries dropped after data showed that housing starts were lower than expected. The Dow Jones Industrial Average rose by 304.91 or 0.72% to 42,627.66. The S&P 500 gained 34.06 or 0.58% to 5,950.99. And the Nasdaq Composite increased by 79.87 or 0.41% to 19,189.87. Investors have largely enjoyed a good week on the global equity markets. They cheered the tariff truce that was reached between the United States of America and China, which greatly reduced the risk of global recession. Nabil Milali is a Multi-Asset & Overlay strategist at Edmond de Rothschild. He also pointed out that news of the European Union's and U.S.'s agreement to intensify their talks on a potential trade agreement and a better-than-expected results season. "The fact we are getting more positive surprises for European stocks is very good." The pan-European STOXX 600 finished 0.4% higher, rounding out a fifth consecutive week of gains. Strong corporate results added to gains made during the trade war pause. LSEG data from earlier this week showed that earnings in the region are expected to rise more than originally thought. Import prices in the U.S. unexpectedly increased in April, as an increase in capital goods offset lower energy products. "We are at the beginning of a transition in trade." In April, it was unclear what the impact would be. However, we do know that uncertainty has pushed residential builders out of balance. The data showed that U.S. housing starts for single-family homes fell by 2.1% seasonally adjusted in April, as high mortgage rates and tariffs on imported goods remained obstacles to the housing market. The report helped to push yields down. This week, the main MSCI index of Asia-Pacific stocks excluding Japan rose by more than 3%. The oil price has been choppy all week. It rose on the U.S. China deal before dropping 2% on Friday due to increased supply pressure caused by an OPEC+ production increase and the prospect for an Iranian nuclear agreement. Brent futures settled at 1.4%. Market bets on the Federal Reserve's easing this year have increased to 57 basis point from 49 basis points. Kenneth Broux is head of corporate FX and rates research at Societe Generale. This put a halt to the Fed's hawkish outlook and poured cold-water on the global bond selling. The 10-year Treasury benchmark yield dropped 1.6 basis points, or 0.439 percent, to 4,439%. This is a continuation of the drop on Thursday. The yields on government bonds in the Eurozone were also lower. Walmart, the largest retailer in the world, has announced that it will have to raise prices this month because of the high tariff costs. Milali, Edmond de Rothschild’s Milali, said that the relief was only temporary as the tariff shock remains "very significant". The dollar grew against a basket currency. Spot gold dropped 1.6% to $3188.25 per ounce, and U.S. Gold Futures ended down 1.2%.
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UK reforms transfer responsibility for position limitations to LME
A source familiar with the matter has confirmed that the London Metal Exchange will limit the number of positions on its platform in July of next year, as part of reforms introduced by the UK Financial Watchdog and not because traders made large bets. Bloomberg News reported Friday that the LME was discussing limits to large positions held by traders of commodities, which has created volatility in price on its platform over the past few months for copper and aluminum contracts. The Financial Conduct Authority of Britain (FCA) currently sets position limits. In December 2023, the FCA opened a public consultation on reforms proposed to improve the resilience and stability of the commodity derivatives markets. Consultation ended in February of last year, and the policy document that stipulated changes was published this February. The LME now has responsibility for determining position limits and exemptions, instead of the FCA. The London exchange responded to a comment request by saying that it was working on implementing the FCA final rules and guidelines on reforming commodity derivatives regulation framework. We will inform the market as we prepare for the launch of the new framework, which is scheduled to take place on 6 July 2026." According to industry sources, the LME has discussed position limits with members for a while and will likely consult on any proposed limits. The FCA has also added new requirements for over-the counter (OTC) trades or bilateral transactions between brokers and clients. In its policy document, the FCA stated that "We proposed new obligations aimed at improving the early identification by trading venues of these risks through the reporting firms' OTC derivatives positions." Our final rules stipulate that trading venues must have the ability to collect OTC data, but they also specify how this power can be used differently depending on the risk and characteristics of a specific market. Reporting by Pratima Deai and Polina Demoitt Editing Frances Kerry
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Weight loss drug manufacturers are lining up to take advantage of a lucrative market, as the competition heats up
Novo Nordisk, Eli Lilly, and other pharmaceutical companies are in competition for the next generation of treatments for obesity. In recent quarters, Eli Lilly’s Zepbound gained market share against Novo’s Wegovy -- a trend that led, in part to the Friday ouster of Novo CEO Lars Fruergaard Jorgensen. Here is a list with weight loss drugs that are being developed by Novo, Lilly, and other companies in search of the next big treatment. NOVO NORDISK The Danish pharmaceutical company is developing several experimental weight loss drugs. These include a pill, a new-generation injection, called amycretin and a drug called CagriSema. In an early stage trial last year, Novo's Amycretin, taken daily, led to a 13.1% weight reduction after only 12 weeks. Early-mid-stage trials found that the shot version of amycretin caused patients to lose 22% of weight within 36 weeks. CagriSema - touted as the potent successor of Wegovy - showed less-than-expected results in two late-stage studies. In one trial, the drug helped overweight patients reduce their weight by 22,7%. This was below Novo's expectation of 25%. Novo intends to submit CagriSema to regulatory approval during the first quarter 2026. Novo also has licensing agreements for drugs that are still in the testing stage, such as the $2 billion deal it signed with China's United Laboratories to develop a drug for weight loss called "triple G" which targets three hormones. ELI LILLY In a late-stage study, Lilly's weight-loss drug orforglipron has helped type 2 diabetics lose nearly 8% their body weight in 40 weeks. This compares well with Novo's injectable drug Ozempic. Ozempic at the highest dosage for diabetic patients caused them to lose 6% of their weight. Lilly plans to submit an application for orforglipron regulatory approval by the end the year. Lilly reported that a mid-stage study of its next generation obesity drug candidate (a weekly injection retatrutide) led to a weight loss of as much as 24.2% in 48 weeks. Lilly signed an agreement with China's Laekna biotech last year for the development of a drug to treat obesity that helps patients to lose weight and maintain muscle. PFIZER Pfizer stopped developing the experimental weight loss pill danuglipron in October after a patient who was undergoing a clinical trial experienced a potential drug-induced injury to the liver that resolved when the medication was discontinued. In March, Roche acquired the rights to Zealand Pharma’s petrelintide obesity treatment in a possible deal worth up to $5,3 billion. Carmot Therapeutics, a Swiss pharmaceutical company, acquired CT-388, an experimental drug for obesity, as part of a $2.7 billion purchase of Carmot Therapeutics that will take place in 2023. Carmot's injection, which is administered once a week, belongs to the same category as Lilly's Mounjaro or Zepbound. The company announced last year that the early-stage trials of a second drug candidate purchased from Carmot had yielded positive outcomes. In a year-long, mid-stage study, Amgen's MariTide drug helped obese patients lose up to 20% of body weight. Amgen says that MariTide late-stage research will begin before the middle of this year. Analysts say MariTide has similar weight loss benefits to Wegovy and Zepbound but slightly more side effects. Merck signed an agreement in December worth up to $ 2 billion to license Hansoh Pharma’s oral experimental drug for treating obesity. Merck is now a late competitor to the race to provide a weight loss pill that can replace weekly injections. The drug HS-10535 is a GLP-1 agonist similar to Wegovy or Zepbound. ASTRAZENECA AstraZeneca’s experimental weight loss pill, licensed from China’s Eccogene a year earlier for up to $ 2 billion, has been found safe and tolerable during an early-stage study in November 2024. The drugmaker has announced that it is moving the once-daily pill AZD5004 into mid-stage clinical trials. ALTIMMUNE Altimmune's experimental weight-loss drug pemvidutide helped reduce weight on average by 15.6% and showed weight loss continued at the end treatment. Some patients, however, experience mild to moderate nausea and vomiting. VIKING THERAPEUTICS Viking Therapeutics reported last year that its experimental drug VK2735 helped patients achieve a 14.7% weight loss mean after 13 weeks in a midstage study. The study enrolled 176 obese adults with at least 1 weight-related comorbidity. The company reported that in November, nine patients who were given the highest dose of 100 milligrams lost an average of 8.2% body weight within 28 days of an early-stage study. ZEALAND PHARMA A Danish biotech company, Zealand Pharma, said that a high-dose of petrelintide (its weight-loss drug-candidate) helped reduce weight on average by 8.6% in an early stage study. In August 2024, the company announced that it would begin talks with other pharmaceutical firms in the second half this year about potential partnerships for developing and commercializing petrelintide. Therapeutics of Structure Structure Therapeutics reported last year that its experimental oral weight loss drug reduced weight by an average of 6.2% at the end 12 weeks in a study conducted during mid-stage.
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Circ will build a $500 million cotton and polyester recycling plant in France
The French government and European Union have given Circ, a U.S. textile recycler, the backing to build a $500-million plant in France. This will be the world's first industrial facility to recover cotton and polyster on a large scale. The French government announced on Friday that the Saint-Avold plant in the north-east of the country, will have the capacity to process 70,000 tons per year once it begins operating in 2028. It will employ 200 workers. Peter Majeranowski, chief executive of the company, said that the plant, which is funded by a combination of equity and debt and a 450 million euro ($504.09 millions) investment, will seek grants and guarantees, including the Strategic Projects Guarantee, from the French government. The EU is working to achieve net-zero emission by 2050. However, efforts have been scattered. Majeranowski stated that the new factory will mark a turning-point for the industry. He said that this will be the first industrial-scale polycotton recycling plant in the world. "Most clothing is made from a mixture of cotton and polyester, which makes it difficult to recycle. This facility is an important milestone." According to the U.N., the fashion industry accounts for 10% of the global greenhouse gas emissions. It also uses more energy that the aviation and shipping industries put together. It is also one of the biggest consumers of water, and a polluter of freshwater sources. Many companies are working on technologies to recycle millions of tons polycotton waste that is created each year. This comes as retailers strive to improve their sustainability credentials, and to meet stricter regulations. Circ uses hydrothermal technologies to break down polyester without damaging cotton so that both can then be recovered and reused in the same procedure. Circ, a recycling company owned by Inditex's Zara and Patagonia, has already been used as a source of recycled material for brands such as Inditex. The factory was built in partnership with Worley, GEA and Andritz. Majeranowski stated that the goal is to use the factory as a template for future plants. Producers and suppliers are eager to assist fashion firms achieve their climate goals. He said, "We've had a lot interest from around the world. From South Asia, East Asia and the States, Canada, Australia, of course."
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TSX poised to gain six weekly points amid trade optimism
The main Canadian stock index remained unchanged on Friday, and investors expect more trade agreements to be reached amid the easing of tariff tensions and softening U.S. inflation figures. The Toronto Stock Exchange S&P/TSX Composite Index was down 0.04% to 25,888.06 point. Donald Trump, the U.S. president, said on Friday that U.S. officials would send letters in the next few weeks to other countries outlining the costs of doing business in the United States. He did not give any additional details. "In Canada ,...there is an expectation that we will be in a position to renegotiate trade agreements with them, and return to a positive relationship with the U.S.," said Ian Chong. The 90-day pause between the U.S. - China tariff dispute and the bilateral trade agreement signed by the U.S. with the UK this week helped to ease concerns about the recession and sparked hope for future deals with the U.S. Chong said that the markets had moved from a position of extreme fear to one of overbought, and it was remarkable how much volatility had decreased since Liberation Day. In May, the data showed that consumer sentiment in the U.S. fell further, but inflation expectations for one year rose. The markets will also be focused on the remarks of Federal Reserve policymakers. At least two officials including Richmond Fed president Thomas Barkin are scheduled to speak later that day. The TSX mining subindex rose 0.5%, as the gold price dropped by more than 2%. This was their worst week for six months. Lithium Americas' stock fell 7.5% in corporate news after it filed for an initial public offering (IPO) of approximately $1 billion. (Reporting from Sanchayaita in Bengaluru, editing by Vijay Kishore.)
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Wall Street falls after US data is weak, but oil prices are recovering.
Wall Street fell on Friday, but global stocks were still set to gain weekly gains as positive earnings helped sustain the rally that was sparked by an agreement between the U.S. and China. Oil prices are still low and continue to support stocks and bonds. A University of Michigan study showed that U.S. consumers' sentiment continued to deteriorate in May, as inflation expectations for the next year increased. Households remained worried about the impact of President Donald Trump’s aggressive and often erratic trading policy. The yields on U.S. Treasuries dropped after data showed that housing starts were lower than expected. Wall Street's major indexes fell on Friday but are still on course for a strong weekly gain. MSCI's global stock index retreated by 0.09%. The Dow Jones Industrial Average dropped 0.03%. The S&P 500 fell 0.07%. And the Nasdaq Composite declined 0.27%. Investors cheered the tariff truce that was reached between the United States of America and China, which greatly reduced the risk of global recession. Nabil Milali is a Multi-Asset & Overlay strategist at Edmond de Rothschild. He also pointed out that news of the European Union's and U.S.'s agreement to intensify their talks on a potential trade agreement and a better-than-expected results season. "The fact we are getting more positive surprises for European stocks is very good." The STOXX 600 pan-European index gained 0.13%, marking its fifth consecutive week of gains. U.S. import price Unexpectedly rose In April, a rise in capital goods costs offset the cheaper energy products. "We are at the beginning of a transition in trade." In April, it was unclear what the impact would be. However, we do know that uncertainty has pushed residential builders out of balance, said Jeffrey Roach Chief Economist at LPL Financial, Charlotte, North Carolina. The main MSCI index of Asia-Pacific stocks ex-Japan has risen more than 3% in the past week. Meanwhile, S&P 500 has gained 4.5%. The oil price has been choppy all week. It rose on the U.S. China deal before dropping 2% on Friday due to increased supply pressure caused by an OPEC+ production increase and the prospect for an Iranian nuclear agreement. Brent futures rose slightly on Friday and are expected to finish the week higher. The low oil prices, by recent standards, are supporting expectations of a slowing inflation. Also, the U.S. data on Thursday, which showed no dramatic impact of U.S. Tariffs, helped both stocks and bonds. Market bets on the Federal Reserve's easing this year have increased to 57 basis point from 49 bps. Kenneth Broux is head of corporate FX and rates research at Societe Generale. This put a halt to the Fed's hawkish re-pricing. The 10-year Treasury benchmark yield dropped 2.2 basis points, continuing the drop of Thursday. The yields on government bonds in the Eurozone were also lower. Walmart, the largest retailer in the world, has announced that it will have to raise prices this month because of the high tariff costs. Milali, Edmond de Rothschild’s Milali, said that the relief was only temporary as the tariff shock remains "very significant." The dollar has edged up against a basket currency. Gold spot fell by 2.12%, to $3,171.20 per ounce. This erased the previous session's gains.
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Gold players maintain their faith despite a trade truce-induced decline
The gold price has fallen by almost 10% since its record high of just over $3,500 an ounce, in April. However, analysts remain bullish due to the strong support that is underlying for this metal. On Friday, spot gold prices were trading at around $3,180 per ounce, putting them on course for their worst six-month period. The U.S. & China reached a truce on the harsh tit for tat tariffs that they announced in April. This triggered a rise in risk sentiment, and a decline in the demand for safe haven assets like gold. Gold's appeal was also dented by the dollar index and benchmark U.S. 10-year Treasury yields, which rose in response to this news. Donald Trump, the U.S. president, said that the United States were close to a nuclear agreement with Iran. Ricardo Evangelista is a senior analyst with brokerage firm ActivTrades. He said: "We are seeing a less volatile geopolitical climate globally, and less trade aggressiveness from the U.S. This is driving investors away from safe havens like gold, and increasing risk appetite on the market." However, there is still a lot of risk and uncertainty. It's still too early to predict the end of gold prices. Gold has risen 21% this year, after a 27% rise in 2024. Nitesh Sha, commodities strategist for WisdomTree, said that gold prices will likely rise rather than fall in the future due to other factors such as central bank demand. Data from the World Gold Council last week showed that the inflow of physical gold ETFs in April was at its highest level since March 2022. China-listed funds led the way. Official data released by the People's Bank of China earlier this month showed that China's central banks added gold to their reserves for the sixth consecutive month. Ole Hansen is the head of commodity strategy for Saxo Bank. He said: "I wouldn't surprise if data indicate that this gold correction we've been seeing right now was cushioned by new and continuing central bank demand." "We must see economic data to confirm that tariffs are having a negative effect on the economy. This will not only increase pressure on the Fed, which is a positive thing. Hansen said that it may also lead a new demand for gold as a safe haven. Data released on Thursday revealed a slowdown of the U.S., the largest economy in the world, in April. This included a drop in the producer prices and manufacturing output as well as a decrease in retail sales. The markets expect the U.S. Federal Reserve will cut interest rates twice this year at least, starting in September. Gold that does not yield tends to do well in low-rate environments. The U.S. Dollar is expected to weaken and central banks are still buying gold, according to UBS analyst Giovanni Staunovo.
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Gold on course for its worst week since November as trade tensions cool
The gold price dropped by more than 2% Friday, and was set to have its worst week since November as a result of increased risk appetite due to the U.S. China trade agreement. Gold spot fell by 1.7%, to $3.185.87 per ounce at 1007 ET (14.07 GMT), and has fallen 4.2% this week. Prices reached a new record of $3,500.05 last month amid increased tariff tensions. U.S. Gold Futures fell 1.2% to $3188.70. The thawing out of the U.S. - China trade war has rekindled risk appetite in the broader market. This shift has caused profit-taking by futures traders in the gold market and triggered a wave of liquidation lasting a week, according to Jim Wycoff. Washington and Beijing announced earlier this week a 90-day break while they worked out the details of ending their titt-for-tat trading war. The U.S. announced that it would reduce "de minimis fees" on smaller shipments coming from China. After a period of uncertainty, Wall Street's main three indexes have opened higher this Friday. Bullion is a hedge for economic and geopolitical instability. Bullion tends to perform well in an environment with low interest rates. In the United States, the recent data on inflation, coupled with economic data that was weaker than expected, has fueled bets for more Federal Reserve rate reductions this year. The markets expect that the U.S. Central bank will implement two rate reductions, starting in September. Spot silver fell 1.3%, to $32.27 per ounce. It also dropped over 1% in the past week. Wycoff said, "It appears to me that silver's price could rise if the bull market in gold continues." Palladium slipped 0.3% and platinum 0.6%, respectively. Both metals are also expected to decline by a similar amount each week. (Reporting by Sarah Qureshi in Bengaluru; Editing by Shailesh Kuber)
Shanghai warehouse copper stock jumps, ending long withdrawals
This week, copper inventories in China increased sharply. They broke a run of three weeks of large withdrawals which had caused concerns about shortages due to the global pull of copper supplies toward the United States.
Shanghai Futures Exchange warehouses reported a 34 percent increase in copper inventories, which reached 108.142 metric tonnes
The stock levels are still well above those of late 2023, when they fell below 30,000 tonnes twice.
According to an anonymous analyst and trader, the rise in inventories can be attributed to tepid demand for copper in China as well as steady production from a growing and giant smelter industry that is not deterred by negative margins.
The Shanghai daily warrant stock has been increasing every day in the last week. Chinese buyers have clearly backed off these higher prices," Alastair Mudro, senior metals strategist with broker Marex said.
The increase in inventories may have allayed fears about shortages. However, this concern is based on the fact that vast quantities of global copper are being redirected towards the United States in order to take advantage of high prices caused by the threat to import tariffs.
China's Yangshan Copper Premium
The trader said that there was panic in China when material that would normally go to China was diverted to the U.S. But that has been replaced with the realisation that demand is not really there.
(source: Reuters)