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Gold nears 2-week high as traders consider US rate cuts
The gold price was stable on Thursday. It held near its two-week high, as investors assessed the probability of a U.S. rate cut in December. As of 857 GMT, spot gold was unchanged at $4,165.24 an ounce. U.S. Gold Futures for December Delivery fell 0.1% to $4162.20 an ounce. Carsten Menke, analyst at Julius Baer, said: "We expect that the consolidation process that began with the October setback will continue because the dust from that setback is still not completely settled." Bullion is down 5% from its record high of $4381.21 reached on October 20. However, it has traded above the critical $4,000 per ounce price. Menke said, "The factors that we see favoring the gold market remain largely unchanged. These include slowing U.S. economic growth, which has led to lower interest rates, a weaker U.S. Dollar, and sustained demand for safe havens, as well as continued central bank purchases." Federal Reserve signals contradictory on timing and magnitude of U.S. rate cuts has accelerated hedge flows into swaptions, and derivatives linked to overnight rates. Kevin Hassett has aligned himself with Donald Trump, the frontrunner for Jerome Powell to be the next Fed chair, in calling for a rate reduction. The comments made this week by San Francisco Federal Reserve Bank president Mary Daly, and Fed Governor Christopher Waller have also raised expectations for a rate cut. CME FedWatch shows that traders now price in an 85% probability of a rate reduction next month, compared to just 30% one week ago. Gold that does not yield tends to do well in an environment of low interest rates. The U.S. market will be closed for Thanksgiving on Thursday and operate with a reduced schedule on Friday. Palladium rose 0.5% to 1,430.67, while platinum gained 2.9%. (Reporting and editing by Alexander Smith in Bengaluru, Noel John)
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Polish financial regulator examines Orlen’s offer for Energa
The Polish Financial Regulator KNF announced on Thursday that it is investigating the plan of state-controlled refiner Orlen to buy out minority investors in its utility unit Energa. Orlen announced the buyout plan on Wednesday. The regulator stated that it would examine all aspects of this and publish its findings as quickly as possible. The regulator stated on its website that "the KNF is undertaking explanatory activities which cover all aspects of this issue." KNF's spokesperson said that the statement it released contained all of the information they could provide at this time and declined to comment further. Orlen announced on Wednesday that it would invite minority shareholders to dispose of their shares in Energa, with the goal of acquiring 100% ownership of the company. In 2020, the state-controlled refiner will become Energa’s majority shareholder as part of its strategy to create a diversified group that includes oil, gas and renewable energy. It currently holds a stake of 90.92%. Orlen didn't immediately reply to an email request for comment.
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Pakistan's fuel oil exports will reach a new high in 2025 and then hold steady in 2026
Industry sources say that Pakistan's fuel oil exports reached a record high in this year. They are expected to continue to increase next year as domestic taxes discouraged purchases and power plants switch to cleaner alternatives. The increase in Pakistani fuel oil exports in Asia has increased the supply, further affecting prices on a market already oversupplied. Shipping data from Kpler & LSEG revealed that fuel oil exports to Pakistan hit a new high in 2018. Kpler data showed that exports have surpassed 1.4 million tons (8.9 million barrels) so far in this year, an increase of over 16% compared to the volume for the entire 2024 calendar year. The majority of these exports are destined for Southeast Asia and Middle East. LSEG data shows exports of 1.33 million tonnes so far in 2025. This is up from 1.11 millions tons last year. Market sources reported that the cargoes were mainly high-sulphur oil (HSFO), which was primarily added to marine fuel supplies, but some volumes were also used as feedstock by refineries. The majority of Pakistan's HSFO exports are to Asia, which has seen an oversupply post-summer and this has led to cracks being weakened in the region. Valerie Panopio is vice president at Rystad for oil commodities markets. Pakistani refiners have sold more fuel via tenders in the past year, after the government increased taxes on domestic fuel oil consumption. Meanwhile, power generators are gravitating towards alternative sources of energy such as solar and coal. According to traders, the leading Pakistani fuel oil exporter is Pak-Arab Refinery. Other exporters include Cnergyico. Attock Refinery. National Refinery. and Pakistan Refinery. Cnergyico is the largest oil refinery in the country and has stated that it wants to increase exports. Usama Qureshi, vice-chairman of the company, said that it exported 247,000 tons (or a little more) of fuel oil during fiscal year 2024-25. Qureshi said he expected at least 50% growth in this fiscal year. This is due to the increased use of lighter sweet crude oil, which has led to a higher production of fuel oil with very low sulfur. The company has formed a partnership with the global trading house Vitol in order to provide more low-sulfur marine fuel from Pakistani ports. The increase in fuel oil exported in recent years has helped to ensure that refinery runs were not restricted by inventory limits. This was a problem in previous years, said Xin Suai Huang, an oil market analyst with FGE. According to Pakistani industry sources, exports will likely continue to grow or even increase next year. Syed Nazir Abbas Zaidi is the secretary general of Pakistan’s oil companies advisory Council. He said that "the trend in furnace oil imports will only increase in 2026". Zaidi stated that "Fuel Oil is no longer viable for electricity generation and it's no longer profitable to be sold on the domestic market following the last Budget". In 2023, Pakistan went from being a net fuel oil importer to a net fuel oil exporter.
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The Gulf markets are tracking the Asian share price rises on Fed eased hopes
The major Gulf stock markets rose early on Thursday as they followed gains in Asian stocks, and expectations of a Federal Reserve rate cut next week grew. Investors are focused on Federal Reserve officials' statements this week, as there is a lack of data about the U.S. economic situation following the end to the government shutdown. CME FedWatch Tool shows that traders are now attributing an 85% chance of a rate reduction next month, up from 30% just a week earlier. The U.S.'s monetary policy changes have an important impact on Gulf markets where the majority of currencies are pegged with the dollar. Saudi Arabia's benchmark stock index rose by 0.4% on the way to ending a losing streak of three sessions. Al Rajhi Bank gained 0.7%, and Saudi National Bank, the largest lender in terms of assets, increased 1%. Saudi Aramco, the oil giant, also saw its price rise by 0.2%. The oil prices fell on Thursday, as traders remained thin because of the U.S. holiday Thanksgiving. Dubai's main stock index rose 0.5%. This was led by the 0.4% increase in Emaar Properties, a blue-chip developer. In Abu Dhabi the index rose 0.2%. Dana Gas fell 2.5% after a missile strike hit its Khor Mor facility in Iraqi Kurdistan, which is one of the biggest gas fields. The attack on the gas field caused major power outages in the region. The Qatari index fell 0.2%. (Reporting and editing by Conor Humphries in Bengaluru, Ateeq Sharif in Bengaluru)
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Shanghai copper gains on increasing bets of December Fed rate reduction
Shanghai copper gained for the fourth consecutive session on Thursday as renewed hopes of a December rate cut by U.S. Federal Reserve boosted sentiment. After hitting the highest price since November 14, 87,300 Yuan, the most traded copper contract at the Shanghai Futures Exchange, closed the day's trading up by 0.35%, to 86990 yuan per metric ton. As of 0753 GMT, the benchmark three-month price for copper fell 0.44%, to $10,927 per ton. The London copper price eased after it broke through $11,000 per ton on the previous Wednesday. It reached $11,025, its highest level since October 30. ING analysts wrote in a recent note that the market now prices in a probability greater than 80% for a Fed cut in December, up from 30% a few weeks ago. As U.S. retail sales and consumer confidence weakened, a rate cut was expected this year. Codelco is the top copper producer in the world and they are pushing for a premium of up to $350 per ton. This is a steep increase from the $89 last year. Some Chinese buyers may not sign a contract for this year. Nicholas Snowdon, the high-profile copper bull who is also the head of Mercuria's metals research, stated that he expected copper prices to reach new heights in 2025. He cited the shortage of copper concentrates when delivering a keynote address at the World Copper Conference 2020 on Wednesday. Other base metals in the SHFE rose 0.26%. Zinc jumped 0.25%. Tin soared by 2.11%. Lead fell 0.67%. Nickel dropped 0.53%. The dollar is worth 7.0808 Chinese yuan renminbi. $1 = 7.0808 Chinese Yuan Renminbi (Reporting and editing by Dylan Duan, Lewis Jackson, Additional reporting by Polina Devitt in London. Editing by Rashmi aich).
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Iron ore gains on weaker dollar but demand is still low
Iron ore futures finished higher on Thursday thanks to a weaker dollar. However, gains were limited due to a decline in China lump ore premiums, which signaled sluggish demand for steelmaking materials. The January contract for iron ore on China's Dalian Commodity Exchange rose 0.44% to 799.5 Yuan ($112.92) per metric ton. As of 0703 GMT, the benchmark December iron ore traded on Singapore Exchange was $0.29% higher. It stood at $106.85 per ton. According to Chinese consultancy Mysteel, China's seaborne Iron Ore Lump Premiums against 62% Fe Fines have fallen 42.2% since two months ago and reached their lowest level in late May 2024. Mysteel stated that the low premiums are due to the declining demand for lump ore from steelmakers who have been suffering losses. India's finished imports of steel during the first seven-months of the current financial year fell 34.1% on an annual basis, and China's output is expected to fall below 1 billion tonnes this year for first time in 6 years following a pledge by the government to reduce production. Galaxy Futures, a Chinese broker, says that the decline in iron ore and coking coal prices has accelerated due to increased coal supplies and inventory accumulations at coal mines. Galaxy stated that the pig iron production will continue to fall this week. This will put pressure on raw materials. The U.S. Dollar Index was 99.431, down 0.28% from the previous day. Dollar-denominated investments are more affordable for holders of other currencies when the greenback is weaker. Coking coal was down by 0.19%, while coke rose 0.03%. The benchmarks for steel on the Shanghai Futures Exchange are mostly down. The price of rebar fell 0.13%. Hot-rolled coils dropped 0.27%. Stainless steel declined 0.28%. Wire rod rose 0.78%. ($1 = 7.0804 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
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Stocks rise on hopes of Fed easing, but yen remains in the intervention zone
The dollar fell on Thursday as traders began to weigh the possibility of a rate increase before the end of the year. Asian stocks also rose. The holiday-shortened week has resulted in limited movements across the markets. Stocks have maintained a generally positive tone, while currencies are more sedate. Investors have shrugged off AI bubble fears that had shaken equities early in November. The U.S. market is closed on Thanksgiving Day, Thursday. It will reopen for a brief session on Friday. MSCI's broadest Asia-Pacific share index outside Japan rose 0.4%, following Wall Street gains and on track to end a three-week loss streak. Japan's Nikkei soared by over 1%, despite European futures indicating a muted opening. The EuroStoxx 50 futures declined 0.04% while the FTSE futures dropped 0.15%, and the DAX futures remained flat. Charu Chanana is the chief investment strategist for Saxo. He said that stocks have responded positively to renewed Fed rate-cut expectations, which helped cool recent AI bubble concerns. The Fed's anticipated cut and strong seasonality make December a difficult to bearish month, and Santa rally is still on the table. The sterling rose to $1.3269, its highest level in more than four weeks after UK Finance Minister Rachel Reeves budget on Wednesday helped ease some concerns about Britain's finances. DATA GAP CAN’T STOP RATE CUTS WAGERS The U.S. data has returned since the 43-day record government shutdown ended in mid-November. However, the majority of economic reports released so far are significantly outdated and offer very little insight on the state of the economy. Investors are now focusing on the comments of Fed officials in order to determine U.S. monetary policies. Comments this week by San Francisco Federal Reserve Bank president Mary Daly, and Fed Governor Christopher Waller have boosted expectations for a rate reduction. CME FedWatch shows that traders now price in an 85% probability of a rate reduction next month, compared to just 30% one week ago. George Boubouras of K2 Asset Management said that the weakening labour market is sufficient to offset inflation. A rate cut in December looks reasonable. While core inflation is higher than target, the U.S. breakeven 10-year inflation rate of around 2.25 percent suggests that markets remain comfortable with inflation expectations. The euro reached its highest level in over a week, at $1.16115. The dollar index (which measures the U.S. currencies against six rivals) was 99.431, down 0.28% from the previous day. China's property sector has been in the spotlight again after China Vanke, a property developer, sought approval from bondholders to delay repayment of an onshore bond worth 2 billion yuan (282.6 million dollars). Thursday's bond price plunged, adding to the losses of this week. China's CSI300 property index dropped to a new low of 1.7%. The broader CSI300 Index however ticked up by 0.5%. VIGILANCE ROUND THE CLOCK IN YEN The Japanese yen rose to 156.12 dollars per yen, but investors were watching for any intervention by Tokyo following weeks of verbal scolding from the authorities to stop the currency's steady decline. Sanae Takaichi, Prime Minister of Japan, ruled out Wednesday that Japan might face a "Truss Moment" or loss in market confidence resulting from her fiscal expansion. Since the beginning of October, the Japanese yen has fallen by almost 10 yen. This is because Takaichi assumed the presidency amid concerns that the government's spending plan will require heavy borrowing and doubts about the timing of next rate hikes from the Bank of Japan. Sources have told us that the BOJ has been preparing the markets for an upcoming rate hike. It may even be as early as next month. The BOJ could also adopt a more consistent path of rate hikes to change the trajectory of its currency. Bitcoin surpassed $90,000 again on Thursday. It is on course to end a four-week loss streak, with a gain of nearly 3%. Gold fell 0.4%, to $4,146.53 an ounce after rising by 0.8% the previous session. (Reporting and editing by Shri Navaratnam in Singapore, Ankur Banerjee)
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Japanese copper smelters want TC/RCs for 2026 that are different from China's benchmarks
The head of Japan Mining Industry Association JMIA said that Japanese copper smelters were negotiating treatment and refinement charges (TC/RCs), which will be implemented in 2026, with global miners. They are seeking to reach agreements at levels other than the benchmarks set by China, which should remain low. The TC/RCs are the fees that miners pay to refine concentrates into metal. They are a major source of income for smelters. Charges tend to decrease when concentrate supplies are tight and increase when ore is more available. China is leading the global smelting expansion, which has led to a shortage of concentrates. This has squeezed the margins of smelters. According to two sources in the industry, for 2025 annual TC/RCs a Chilean mining company and a Chinese smelter have agreed to $21.25 per ton, and 2.125 cents a pound. Japanese smelters, on the other hand, secured better terms of $25 per ton, and 2.5 cents a pound. Tetsuya Tanahka, Chairman of the JMIA said that Japanese smelters were trying to create a different market from the global benchmark for 2026 by signing contracts on an individual basis rather than following the benchmark. He said: "It is unclear where the levels will be landed, but these moves are already underway." He said that the positions of miners vary. Some insist on selling to the highest bidder, which is in line with economic principles. Others see risks when relying too heavily on one country. Tanaka warned Japanese smelters that they would continue to be faced with tough conditions. A significant impact is expected on earnings next year, as "smelters" in certain regions are likely to negotiate at low TC/RC rates. In October, Japan and Spain issued a rare statement together expressing their deep concern about the tumbling TC/RCs and warning that both miners and smelters cannot develop sustainably in current conditions. Tanaka, the president of Mitsubishi Materials, announced on Wednesday that it will reduce its primary copper smelting production by 30 to 40 percent by 2035, as it moves to secondary smelting in order to increase profitability. Sources said that China's leading copper smelters have decided not to set fee guidance for copper concentrate processing in the fourth quarter of 2025. This is the third time in a row they have taken this decision, which highlights a long-term feedstock shortage. (Reporting and editing by Thomas Derpinghaus; Yuka Obayashi)
Gold prices fall from near two-week peak as investors take profits
On Thursday, gold fell on profit-taking following a two-week-high in the previous session. Investors also weighed the likelihood of a U.S. rate cut for December amid contradictory signals from the Federal Reserve.
As of 0616 GMT, spot gold was down 0.3% at $4,153.49 an ounce. U.S. Gold Futures for December Delivery fell 0.5% to $415.50 per ounce.
After Wednesday's rise )... Gold is consolidating because the Fed hasn't decided what it's going to do.
Investors seeking to protect themselves from increased policy uncertainty have accelerated the hedging flow into derivatives linked to overnight rates.
Some Fed officials led by New York Fed president John Williams and Governor Christopher Waller have said that a December easing could be warranted because the weak labor market is putting downward pressures on Treasury yields.
In the previous session, benchmark 10-year Treasury yields were near their lowest levels in over a month.
However, their stance contrasted with that of several regional Fed Presidents who advocated a pause on easing until the inflation showed a more compelling move towards the 2% target.
Kevin Hassett has also said that rates should be lowered, as has Donald Trump.
According to CME's FedWatch, U.S. rate forwards price in a 85% chance that rates will be cut in December.
Gold that does not yield tends to do well in an environment of low interest rates.
Data on Wednesday revealed that weekly jobless claims declined last week, despite the fact that the labor market struggles to create enough jobs for those who are unemployed.
In November, U.S. consumer sentiment also declined due to concerns about jobs and household finances.
The spot price of silver dropped 0.6%, to $53.04 an ounce. Platinum gained 2.3%, to $1.624.75, while palladium fell 0.3%, to $1.419.0. (Reporting and editing by Rashmi aich, Eileen Soreng and Ishaan arora in Bengaluru)
(source: Reuters)