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Investors assess U.S. China trade deal as Fed lowers rates and gold gains
Gold prices rose by 2% on Friday, boosted by the Federal Reserve's interest rate reduction and the uncertainty surrounding the outcome of the trade agreement between China and the U.S. As of 01:39 pm, spot gold had risen 1.9% to $4,003.62 an ounce. ET (1739 GMT). U.S. Gold Futures for December Delivery settled 0.4% higher, at $4015.9 an ounce. U.S. president Donald Trump announced on Thursday that he would lower tariffs against China from 57% to 47% in exchange for Beijing returning U.S. purchases of soybeans and rare earths and cracking down the illicit fentanyl traffic. The markets have backed off any optimism about the end of the trade wars as details of the U.S. China deal were revealed. Fears that the truce could be temporary led to a fall in equity markets. The U.S. Federal Reserve cut interest rates in line with expectations on Wednesday. However, it indicated that this may be the last reduction of the year, as the government shutdown is threatening the availability key economic data. In a low interest rate environment, safe-haven assets like gold become more appealing as they are non-yielding. Gold tends to do well during times of geopolitical or economic uncertainty. Wells Fargo Investment Institute has raised its gold target for 2026 to $4,500-$4,700/oz from $3,900-4,100/oz previously, citing uncertainty in geopolitical policy and trade. Analysts said that they expect the question marks to continue to drive private and public demand, and higher prices. Silver spot rose 2.7%, to $48,81 an ounce. Platinum gained 1.2%, to $1604,38, and palladium increased 3.4%, to $1447.08. (Reporting from Noel John in Bengaluru and Pablo Sinha; editing by Shalesh Kuber).
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Mercuria and ERG sign $100 million copper deal
Mercuria Energy Trading and Eurasian Resources Group have agreed to prepay up to $100,000,000 to Eurasian Resources Group as part of a three-year copper supply agreement, they announced on Thursday. Prepayments is an advance paid by buyers to producers. It's often used to ensure future supplies or to provide working capital in the commodity trade. Mercuria will receive copper from ERG, a Luxembourg-based company that produces copper in the Democratic Republic of the Congo. Shukhrat Ibragimov, Chief Executive Officer of ERG, said: "The agreement marks an important step towards deepening our partnership with global partners in our efforts to realize the full potential our core operations in DRC." ERG and Mercuria have not disclosed how much copper will be delivered to the Swiss commodity trader annually. The facility will help ERG develop its assets in the Democratic Republic of the Congo, a region of increasing strategic importance to Mercuria Energy Trading SA. Kostas bintas is the Global Head of Metals & Minerals. (Reporting and editing by Kirsten Doovan; reporting by Pratima Dasai)
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IMF and Serbia reach agreement at staff level on a 36-month deal
The International Monetary Fund (IMF) and Serbia reached an agreement at the staff level on the second review of a 36 month arrangement to support economic reforms within the Balkan nation, the IMF announced on Thursday. Signed in October 2024, the Policy Coordination Instrument makes it easier for Serbians to obtain loans from other sources. According to the agreement, Serbian authorities have committed themselves to a fiscal surplus limit of 3% over a period of three years. In a statement issued following an eight-day visit to Serbia, the IMF said that the review would be subject to the approval of the IMF Executive Board. After 16 people died in a roof collapse at a railway station last year, accusations of widespread negligence and corruption were made. IMF stated that Serbia's economy has slowed down this year because of global trade tensions and domestic political uncertainty. Also, the U.S. sanctioned NIS Oil Company. It said that "poor harvests have also driven up food prices." However, the headline inflation rate fell to 2.9% after temporary price controls and margin restrictions in September. The growth rate for 2025 will be 2.1%. It will then recover to around 3% by 2026, as exports and investment strengthen. This is supported by rising household incomes and stable economic conditions. IMF stated that Serbia's reserves of foreign currency and public debt are moderate.
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Arkansas wants to be the US hub for lithium, but it has to overcome Chinese competition and tech challenges
Arkansas is facing stiff Chinese competition as well as a sagging market price and technical challenges in its bid to become the U.S. hub for lithium production. State officials and industry executives have said that these obstacles are easily overcome. According to the U.S. Geological Survey, the southern state of South Carolina, where former U.S. president Bill Clinton was born, is located atop Smackover. This underground geological formation stretches from Florida to Texas and contains brines containing over 5 million metric tonnes of lithium. This is enough lithium for millions of electric vehicles and other devices, if it can be filtered by direct lithium extraction (DLE), which has never been done commercially before. LITHIUM PRICE DROP Beyond technical challenges, Arkansas has to deal with a price drop of over 80% in the last 18 months. This fall is a result of an oversupply by Chinese competitors. Patrick Howarth, Exxon Mobil’s director of lithium, said at the Arkansas Lithium Innovation Summit held in Little Rock, "We're all working to make Arkansas as competitive and as efficient as possible." Standard Lithium, Exxon Mobil, and Chevron, among others, are rushing to show that DLE is viable in Arkansas, despite the low prices. Arkansas hopes that its industrial expertise and electricity rates, which are among the lowest in the U.S., will help the state become the nation's lithium hub. Albemarle operates the only U.S.-based lithium mine in Nevada. "We spend a great deal of time convincing people outside Arkansas that this is a real opportunity, that production can be low-cost, and that it could become a reliable supply of lithium chemicals in North America for many decades," said Andy Robinson. Standard Lithium is developing a DLE project in Arkansas with Equinor. GOVERNOR SEES DLE SUCCESS IN STATE Approximately 860 people attended, an increase in attendance of 15% over the previous year's summit. In an interview, Arkansas Governor Sarah Huckabee Sanders stated that she believes DLE will succeed. "Big companies don't invest hundreds of millions of dollar in things if they do not feel that they can see a way forward," said Sanders. She was the press secretary of President Donald Trump's first term, and she became governor of New York State in 2022. The governor stated that she doesn't believe the state’s lithium industry requires government guaranteeing a minimum price. This is something Trump officials discussed in relation to critical minerals. Sanders said she doesn't think it's a disconnect for her to want Arkansas to become a major producer of lithium but not own an electric vehicle. Sanders stated that although she does not own rockets in Arkansas, the rocket industry is still something they are very good at. "I don’t think that you need to own a business to be able sell it, or to create an environment in which these businesses can thrive." (Reporting and Editing by Rod Nickel. Ernest Scheyder)
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Scientists use a climate "time machine" in Amazon to prepare for the COP30
Scientists in Brazil's Amazon have created a "time-machine" that pumps carbon dioxide into the canopy of the rainforest to simulate future atmospheric conditions to gauge the biome's adaptation. This is an open question which will be discussed next month at the COP30 United Nations Climate Summit hosted by Brazil. The AmazonFACE project, near Manaus, Amazon's largest city, features six steel tower rings that loom over the jungle canopy. Each ring is surrounded by groups of 50-70 mature trees. After baseline testing, the scientists will fumigate three of the rings using carbon dioxide in levels that simulate climate forecasts over the next decade, with the remaining samples serving as control samples. "We are trying to create an atmosphere of the future," Carlos Quesada said, a coordinator for INPA (National Institute for Amazon Research), which is leading this experiment along with Universidade Estadual de Campinas. Scientists say that the preservation of tropical rainforests such as the Amazon is crucial to reducing the worst impacts of climate change. Scientists say that the preservation of tropical rainforests like the Amazon is vital to curbing the worst effects of climate change. FACE (Free-Air CO2 Enrichment) will allow Quesada to study the effects of elevated levels of carbon dioxide on rainforest giants and the surrounding plant life. The Brazilian federal government and United Kingdom are supporting the project. AmazonFACE is a new frontier for forestry engineer Gustavo Carvalho. FACE has been tested around the globe, including in the United States where the Department of Energy conducted temperate biomes tests. Carvalho, under the shade provided by the Amazon canopy, said: "This is a first-ever experiment of a tropical natural forest this size." Carvalho explained that baseline testing is underway. Sensors record every 10 minutes the forest's reaction to changing conditions. They show how the trees absorb carbon dioxide and release oxygen and water vapour in response to rainstorms, sunshine and storms. In the future, artificial microclimates will be created with higher levels of carbon dioxide. Carvalho explained that if a model predicts (a certain amount of carbon dioxide in the air) in 2050-2060, we will increase the amount to this amount to see how the forest reacts. "We will have a small area in the forest where we can enter to know what the future holds."
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Sugar prices hit five-year lows as surplus forecasts swirl
Investors reacted to news of an U.S.-China truce in trade, and worries about a growing surplus pushed oil prices lower. The falling energy prices can cause Brazilian cane mills, which produce cane-based ethanol and sugar, to produce less of it. Michael McDougall, an independent sugar analyst, noted that the weather forecasts for key sugar-producing areas are still benign and boosting crop prospects. Meanwhile, oil prices continue to be under pressure due to a lack details in the U.S. China trade agreement. The sugar price in Brazil is still two to three cents lower than the parity for ethanol, so the message to Brazil's cane mills should be to produce more ethanol and less sugar. McDougall stated that "the trend is lower, and some are talking about 10-13cents. But when too many people look further down, it is a preliminarily signal that we will not see that." Raw sugar futures, traded on the ICE, which is used to price physical sugar in the world, dropped 0.6% at 1600 GMT to 14.34 cents a pound, after hitting their lowest level since October 2020, 14.07. After touching their lowest level since December 2020, white sugar futures fell 0.9% to $414.10 per kilogram. Data from the first half October confirmed that sugar production in Brazil, the world's largest producer, grew faster than expected. Rising 1.25% Expected versus Actual Increase of 0.6% Brazil-based consultant Datagro Last week, it was predicted that the global sugar market will turn into a surplus in 2025/26 of 1,98 million tons from a deficit of 5 million tons. To limit sugar losses, the state of Uttar Pradesh in India has increased the price mills have to pay for their new crop. This should make sugar exports more difficult. Other soft commodities also traded saw arabica coffee drop 0.4% per lb to $3.8925, and robusta coffee fall 0.2% to $4.617 per ton. London cocoa dropped 0.4% per ton to 4,346 lbs, while New York cocoa declined 0.9%, to $5,991 per ton.
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Exclusive -State Street removes US Fund arm from climate group
State Street, fourth largest asset manager in the world, announced that it will withdraw the majority of its operations from the main global climate alliance of the sector despite its efforts to retain its members by easing its rules. State Street's spokesperson did not give a reason for its decision to withdraw its U.S. division from the Net Zero Asset Managers program, but said that the European units would continue to be part of the State Street group. State Street's spokesperson stated that they were "determined to redefine our membership to NZAM in order to support our clients who have net-zero investment goals and objectives". State Street Investment Management's decision, which involves $5.4 trillion of assets, coincides with other major U.S. funds evaluating their membership in the light of rule changes. This is in response to political pressure from the United States and in advance of climate talks in Brazil. NZAM will republish a list with the continued signatories by the end of January. A spokesperson for the group said that they were pleased to see the UK and European arms of State Street remain committed signatories. NZAM HAS CHANGED THE STATEMENT OF ITS MEMBERSHIP CONDITIONS NZAM was launched five years ago with the aim of addressing financial risks associated with climate change, and providing a platform for collective actions. However, critics have accused it of possible antitrust violations. Vanguard, followed by BlackRock as the industry leader, left the group. This prompted NZAM's review of their activities which culminated on Wednesday with confirmation that membership rules will be relaxed. JPMorgan’s fund division also left the group back in March. NZAM no longer requires members to achieve net-zero emissions portfolio by the mid-century nor to set interim goals. Members will be asked to do simpler things, like provide clients with climate risk information. State Street refused to discuss the new rules or specify what percentage of assets would be covered by NZAM membership. Other firms that assess membership State Street stated that its EU and UK subsidiaries remain "subjected to our fiduciary duty to our clients", and added that its business "remains at all times independent in investment decisions". This could be a counter to claims made in Texas where the Republican Attorney General of Texas has sued State Street BlackRock Vanguard and Vanguard for their climate records. He cited, among other things, their NZAM membership as evidence of inappropriate collective behaviour. A judge in August allowed the majority of claims to proceed. Maria Elena Drew, Global Head of Sustainability at T. Rowe Price and other U.S. NZAM Signatories said that it would evaluate whether to continue as a signatory after a three-month period evaluation given by NZAM. She said: "Whether or not we do, we are committed to making investment decisions and stewardship with a full understanding of all risks and opportunities including those related to climate and environment." Wellington Management sent an email to say that they were currently reviewing the NZAM commitment. We maintain that we believe material ESG factors, such as climate considerations, could affect the long-term values of assets in which we invest. Therefore, it's in our clients best financial interest for us to analyse them. (Editing by Kirsten Doovan and Jan Harvey).
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UN and Sudanese officials fear hundreds of deaths after raiding the last hospital in al-Fashir, Darfur.
World Health Organization (WHO) and a Sudanese government official reported that the last working hospital in al-Fashir, a city in Sudan, was raided this week and it is believed that hundreds of people were killed after a paramilitary group overran the area. The death toll could not be verified immediately, since communications within the city were cut off. Doctors from the hospital had also been disconnected ever since the paramilitary Rapid Support Forces took over the Sudanese Army's last stronghold inside the city on Sunday. The exact date of the raid was not known. Both the Sudanese official and doctors, as well as activists, blamed the RSF. RSF dismissed these reports as false information, claiming in a press release that all of al-Fashir’s hospitals were abandoned. According to the International Organisation for Migration (IOM), more than 36,000 people fled al-Fashir on Sunday. However, little is known of the fate of over 200,000 other people who were believed to have remained in the city during the 18-month RSF siege and assault. Rights groups have feared for years that a RSF takeover in famine-stricken al-Fashir would trigger mass revenge killings. Escapees have also reported summary murders. Documented by rights groups and U.S. officials, the RSF and its allied militias have been accused of ethnic cleansing in Darfur. Al-Fashir is the last significant army holdout in western Darfur. The army has been fighting the militias in a conflict that began in April 2023. ABDUCTIONS, HOSPITALS UNDER ATTACK Darfur State Governor Minni Minawi - a former Darfur Rebel leader who is now aligned to the army against RSF - said on X, Wednesday, that 460 people had been killed in the attack at al-Fashir’s Saudi Hospital. Minawi refused to provide any details, and could not be contacted for comment. According to two Sudanese doctor's groups citing local sources, as well as an al-Fashir activist group, they believe that hundreds of people were killed in the makeshift wards surrounding the hospital, along with those who were inside. Could not verify their claims. In a statement released on Wednesday, the WHO confirmed that four doctors and a pharmacist had been abducted from a Saudi hospital. The death toll could not be confirmed by a humanitarian source, but the kidnappings were confirmed. A WHO spokesperson said that the attack had been verified based on eyewitness accounts, government reports and photos. The video circulated by Minawi on social media claiming to show an attack at a hospital, but it was actually geolocated to another location: the Al-Fashir University which two former residents claimed had been used for shelter. The Yale Humanitarian Research Lab published satellite images of the hospital from October 28, which showed clusters and red stains around the hospital. Residents, doctors and humanitarians in al-Fashir claim that the RSF targeted hospitals within al-Fashir with drones and rockets during the siege. The Saudi hospital in al-Fashir was left with little or no supplies to treat malnutrition cases, traumas, and maternity patients after all the other hospitals had been abandoned by the attacks. (Reporting and editing by Aidan Lewis, Nafisa E. Eltahir Emma Farge Catherine Cartier Milan Pavicic Khalid Abdelaziz)
Copper backs off Fed caution amid concerns about Chinese demand
The Federal Reserve's cautious comments on U.S. rate cuts and concerns about Chinese demand led to a decline in copper prices on Thursday, compared with the record highs of the previous day.
The price of three-month copper at the London Metal Exchange fell 1.8% in open-outcry official trading to $10,978 a metric ton, after reaching a record high on Wednesday, $11,200, due to supply concerns.
Robert Montefusco, a broker at Sucden Financial, said: "Copper prices are down today due to the lackluster physical demand and the Fed's dovish sentiment on a rate cut in December.
Fed Chair Jerome Powell shocked the markets on Wednesday, casting doubt on the prospects for an interest rate reduction at the next central bank meeting in December. He said that such a move "was not a foregone decision".
This helped push the dollar index up to its highest level in three weeks, making commodities priced using the U.S. dollars more expensive for buyers who use other currencies.
The Shanghai Futures Exchange's most traded copper contract fell 0.1% to 87.960 yuan (12,348.73 dollars) per ton.
The physical demand for metals in China, the top consumer of metals, has been weakening as prices rise. Spot copper prices are higher than SHFE prices.
A poll found that major miners have reported lower output of copper in the first nine month of the year. This has led analysts to raise their price predictions for next year.
Dan Smith, managing Director at Commodity Market Analytics said that the market is bullish but some miners may be holding it back because they want to sell ahead to lock in high prices.
I'd imagine that copper producers are doing a lot of hedging, which prevents prices from rising. These are good numbers for many copper producers."
Other metals include LME aluminium, which fell 1.4% to $2.845.50 per ton in official activity, nickel, which dropped 1% to $16,215; zinc, which slipped 1.9% to $3,000; lead, a 0.1% drop to $2.024; and tin, a 0.6% decline to $35,960.
Click here for top metals stories ($1 = 7.1230 Chinese yuan). (Reporting and additional reporting by Lucas Liew, Editing by Shareysh Kuber, Shreysh Biswas, and Shareysh Kuber)
(source: Reuters)