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Markets bet on US rate cuts as gold sets for fourth monthly gain
The gold price rose on Friday, and was poised to reach a fourth consecutive monthly increase. This optimism stemmed from investor expectations that the U.S. Federal Reserve will cut interest rates by December. Gold spot rose 0.8%, to $4,189.61 an ounce, by 0303 GMT. It was at its highest level since November 14 and set for a weekly gain of 3%. Bullion will rise by 3.9% this month. U.S. Gold Futures for December Delivery were up 0.5% to $4,221.30 an ounce. Trading conditions look a little thin in terms of liquidity, which is exacerbating certain market movements. Many of the gold price moves are due to people pre-positioning themselves in anticipation of lower interest rates, said KCM Trade's Chief Market Analyst Tim Waterer. According to CME's FedWatch, U.S. rate-futures are pricing in a 87% chance that rates will be cut in December. This compares with 85% the day before and 50% the week prior. The comments made by Fed Governor Christopher Waller and San Francisco Federal Reserve Bank president Mary Daly this week have raised expectations of a rate reduction next month. Kevin Hassett has said the same thing as Donald Trump. He is a front-runner to succeed Jerome Powell in his role as Fed chair. However, their stance contrasted with that of several regional Fed presidents who advocated a pause, until inflation showed a more compelling move towards the U.S. Central Bank's 2% goal. Gold that does not yield a return tends to do well in environments with low interest rates. The U.S. Dollar was heading for its worst weekly performance since late July. Gold priced in dollars is more appealing to buyers of other currencies when the greenback is weaker. Investors believe that Hassett's appointment as Fed chief could put pressure on the dollar. Silver spot rose by 1.4%, to $54.18 an ounce, and platinum grew 1.7%, to $1,634.82, both of which were up 7.4% on the week. Palladium fell 0.6% to $1.428.62, but it was still set for a weekly gain of 4%. (Reporting by Ishaan Arora; Editing by Subhranshu Sahu)
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Iron ore gains for the third week in a row on Infrastructure Demand
The iron ore futures price was little changed on the Friday but is headed to a third weekly gain in a row on recent infrastructure demand. As of 0301 GMT, the most-traded contract for January iron ore on China's Dalian Commodity Exchange was trading 0.06% higher. It was 796 yuan (US$112.48) per metric ton. This week, the contract has risen by 1.14%. The benchmark December Iron Ore at the Singapore Exchange fell 0.56% to $106.1 per ton. Galaxy Futures, a Chinese broker, says that recent infrastructure demand is increasing, resulting in a continued improvement in apparent steel demand. Prices are expected to follow fundamentals on the short-term. Data from Chinese consultancy Mysteel shows that inventories of five major carbon steel products held in Chinese steel mills fell for the seventh consecutive week by 2.5%, to 3.9 millions tons on Thursday, the lowest level since late January. Steelhome data shows that the total stockpiles in China of iron ore dropped by 0.42% on a week-to-week basis to around 139 millions tons as of November 28. According to Chinese broker Everbright Futures, on the supply side, the top two producers, Australia and Brazil, both saw a decline in shipments, while the total number of ships at port fell by 8 months. Iron ore futures have been softening recently due to concerns over China's real estate sector. However, losses were capped when Bloomberg reported that policymakers could introduce new support measures. Coking coal and coke, which are both steelmaking ingredients, have also lost ground. They fell by 0.84% and 2.244% respectively. Galaxy said in the same report that increased coal supply, as well as continued stock accumulation in coal mines, has led to an acceleration in recent coking coal prices. The benchmarks for steel on the Shanghai Futures Exchange are mostly in positive territory. Rebar gained 0.42%. Hot-rolled coils grew 0.18%. Wire rod increased 0.18%. Stainless steel fell 0.44%. ($1 = 7.0769 Chinese yuan). (Reporting and editing by Rashmi Liew)
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Petrobras reduces dividend and makes investment projections in its new five-year plan
Petrobras, the state-run Brazilian oil company, has cut its dividend forecast by almost 2% and reduced expected investments by nearly 2% as part of a five-year plan released on Thursday. The firm is struggling with lower crude prices. Petrobras plans to distribute between $45 billion - $50 billion in ordinary dividends during the period 2026-2030, according to a filing. The firm's previous five-year plan, which was released last year, had the company expecting to pay up to $55billion to shareholders. The new plan does not mention extraordinary dividends, whereas the old one suggested that up to $10 billion in dividends could be paid out between 2025 and 2029. Petrobras has cut its investments from $109 billion to $109 billion as it faces lower Brent oil price, which it expects to hover at $63 per barrel next year. This is below the $77 it estimated for 2026, in the previous plan. The state-owned firm has seen its investments drop for the first time under the current government of President Luiz inacio Lula Da Silva. Under former President Jair Bolsonaro, the last time investments were cut was in 2021-2025, during a period of Petrobras divestments. According to sources, the report on Wednesday stated that Petrobras expected investments would drop to $109 billion under the new plan. Lula, since he took office, has encouraged the oil company to invest more to help boost the economy of the country. The leftist leader will seek to run for a non-consecutive fourth term next year. Petrobras increased its investments in exploration and production by around $1 billion, bringing the total to $78 billion, but kept refining, transport and marketing at about $20 billion. Petrobras said that it also expects to achieve peak oil production in 2028, within a period of 2.7million barrels per daily (bpd). The plan's peak production would be 3.4 millions barrels of oil equivalent per day in 2028 or 2029. This is based on projections for each year with a plus or minus 4 percent margin. Reporting by Fabio Téixeira and Rodrigo Viga Gaier, Rio de Janeiro. Editing by Natalia Siniawski & Kevin Buckland.
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Asian shares finish November with a strong performance, helped by Fed cuts
Asian shares will end a difficult November on a more stable footing as renewed hopes of a U.S. interest rate cut have helped calm valuation fears and Treasuries are rallying for the fourth consecutive month. The U.S. market, which was closed for Thanksgiving overnight, is due to have a shorter session on Friday. This means that activity will be more muted across all major asset classes than usual. The majority of European stocks were higher while currencies were more calm. MSCI's broadest Asia-Pacific share index outside Japan was flat Friday. It is now on track to gain 3% in the coming week, its first weekly increase in four weeks. It was down 2.7% for the month. Nikkei, the Japanese stock index, was not much moved either. It was on track for a rise of 3,2% per week. It was down 4.3% for the month. South Korean shares fell 1%, but the central bank of the country held rates at the same level and announced the end of the easing cycle. The index has still gained 2.5% this week. The global equity markets were unusually volatile in November, as fears about the sky-high valuations of tech stocks shook markets. Meanwhile, a U.S. shutdown lasted a record 43 consecutive days. Bitcoin, the risk-barometer, fell 17% in November. Federal Reserve officials are cautious due to the lack of data from the shutdown, but Fed Governor Christopher Waller, and New York Fed president John Williams, have expressed support for a cut in rates next month. This has helped stabilize the sentiment. CME FedWatch shows that Fed funds futures indicate an 85% probability of a rate reduction next month. This is a dramatic change from the 30% chance a week ago. Vincenzo Vedda is the chief investment officer of DWS. He said: "If I combine everything, and compare valuations to past bubbles, for example, then I don't think we are there yet." "We think that the inflation is generally under control... In general, we expect a decent growth in the coming 12 months... You have a favourable environment for risky assets. The Hang Seng Index in Hong Kong rose 0.3%, while the blue-chip index in China fell 0.1%. BOJ HIKE IS IN VIEW The data showed that Tokyo's core consumer prices rose by 2.8% from November of last year, which was above the forecasted 2.7% increase. This is just one of a number of data points that has kept the bets on a Bank of Japan rate hike alive. Markets are now pricing in a rate hike as early as next month. As the yen fell and political pressure to keep rates low waned, more BOJ board members have signalled a rate hike. The yen was unchanged at 156.37 to the dollar after rebounding from a 10-month-low of 157.9, which was hit last week. Investors await the Japanese authorities' intervention after weeks of verbal browbeating to stop the currency's steady decline. The dollar's performance on the currency market was stable against its major counterparts, but it was expected to suffer a loss of 0.7% per week, the largest since July. Markets bet on the end of policy easing cycles for both the Aussie and Kiwi. The minutes of the European Central Bank meeting show that policymakers were also not in a hurry to lower rates. The prospect of Fed policy easing in December boosted the rally for Treasuries. Benchmark 10-year Treasury Yields were at 4.0094%, and set to drop by 10 basis points each month for the fourth consecutive month. Oil prices were essentially unchanged on Friday, but they were headed for a fourth consecutive month of losses due to the U.S. pushing for the peace plan in the Ukraine-Russian war. Brent crude futures for the front-month, which expires on Friday, remained unchanged at $63.34 per barrel. The spot gold price rose 0.7%, to $4,186 an ounce. This brings the monthly gain up to 4.6%. However, they are still a long way from the record high $4,381.
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ASIA COPPER WORRID-China's crackdown on overcapacity reaches copper but market impact is unlikely
Plans to build a series of new smelters have been shelved The industry still expects to gain new capacity through projects in construction The move is seen as a sign of more to come Amy Lv. Lewis Jackson, and Dylan Duan Industry insiders say that the decision by China to suspend a number of planned copper smelters will not have a significant impact on historically tight copper markets, unless more measures are taken to reduce output. Due to the disruption of mines, copper concentrate supplies are becoming scarcer and more expensive. The growth in smelting capacity in China has increased competition globally for this feedstock. The fees paid for processing copper (also known as treatment and refinement charges) have dropped to negative historic levels. China announced on Wednesday that it had suspended the construction of 2 million metric tonnes of new smelting capacities. This was a gesture to the difficulties faced by Chinese smelters during annual negotiations over copper concentrate supplies. Eight analysts and three traders who spoke to us on the sidelines the World Copper Conference Asia, held in Shanghai, this week, stated that there would be no immediate impact on copper prices, as the projects currently under construction will be completed. Helen Amos is a commodities analyst with BMO Capital Markets. She said: "I don't believe the decision will change anything over the next two years because we are still seeing new smelting capacities coming online." Unidentified Chinese analyst said that the announcement which didn't name any projects only raised questions. This included how the 2 million ton figure was calculated. The Chinese government is redoubling its efforts to reverse the rampant industrial overcapacity. Policies to reduce production have been implemented for coal, lithium and polysilicon (the raw material used in solar panels). Uncertainty remains, however, as to how far Beijing is willing to go in order to curb a sector that helps China offset its reliance on refined copper imports, which it would like to reduce. The industry figures warned that if Wednesday's announcement signals Beijing is planning or considering more drastic measures, such as forced capacity reductions or a cap on production, then it could have a greater impact. Amos stated, "For me it's symbolic of the industry being affected by policy changes like we have seen in steel and aluminum in the past." (Amy Lv in Shanghai, Lewis Jackson and Dylan Duan; editing by Joe Bavier).
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Israeli forces kill two Palestinians who appear to be surrendering in West Bank
Two Palestinian men were shot by Israeli security forces on Thursday, who appeared to surrender and be unarmed in a raid conducted in Israel-occupied West Bank. The men can be seen in the video exiting the building in Jenin in the northern West Bank, removing their shirts, and lying down on the ground as if they were surrendering. The men were then directed back into the building by the forces before they opened fire. After hearing shots, a journalist near the scene saw Israeli forces standing next to what appeared to a dead body. In a press release, the Palestinian Health Ministry said that two men had been killed by the shooting. They were identified as Montasir Asasa and Yusuf Abdullah. Israel Police and the Israeli Military issued a joint press release announcing they had launched an investigation following the firing of forces on suspects exiting a building. The statement didn't give any reasons for the shooting, nor did it say that two men were lying on the floor before being directed inside the building to be shot. Jenin Governor Kamal Abu al-Rub accused Israeli forces, in a phone conversation, of carrying out "cold-blooded" executions of two young men, who, he claimed, were unarmed and surrendered. He said that those who fired should be held accountable, but he expressed doubts about the Israeli authorities' ability to conduct an honest investigation. In a joint statement, the Israeli police and military said that Israeli forces were conducting an operation in Jenin to apprehend people wanted for "terrorist activities", including throwing explosives at security forces and shooting them. The statement stated that the two men who had been shot were wanted people who were associated with a "terrorist network in the Jenin area". The statement did not say what the men were accused or provide any proof of their alleged connection with a terrorist network. According to military and police sources, security forces surrounded the building in which the men were found before launching a "surrender process" lasting several hours. The statement stated that "fire was directed at the suspects after their exit," adding that "the shooting is under review by the commanding officers on the ground and will be sent to the relevant professional body." Itamar Bin-Gvir, Israel's National Security Minister of the far-right party, issued a later statement in which he gave his "full support" to both the military and police unit involved in the shooting. He wrote: "The fighters acted as they were expected to - terrorists must die!" The Jenin raid is the latest in a campaign that Israel has been waging for months across cities of northern West Bank. Israeli forces launched an operation in the nearby city Tubas on Wednesday. Hamas, the Palestinian militant group that agreed to a Gaza ceasefire last month, has condemned the killings of men in Jenin and called on the international community intervene in order to stop Israel's "escalating executions in the field." The group has not claimed the two men. Reporting by Mohamad Tookman, Ali Sawafta, Steven Scheer, Alexander Cornwell, and Steven Scheer, in Jerusalem. Editing by Rosalba o'Brien.
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Gold falls from near 2-week-high as traders consider US rate cuts
Gold prices fell on Thursday after hitting a two-week high in the previous session. Investors also assessed the probability of a U.S. rate cut in December. As of 1601 GMT, spot gold was down by 0.2%, at $4,157.29 an ounce. U.S. Gold Futures for December Delivery fell 0.2% to $4154.30 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 broadly above the $4,000 per ounce key level. 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 urging a rate reduction. The comments made this week by San Francisco Federal Reserve Bank president Mary Daly, and Fed Governor Christopher Waller boosted expectations for a 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. 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. Silver spot fell by 0.3%, to $53.17 an ounce. Platinum rose 1%, to $1.604.72, while palladium increased 0.5%, to $1.430.40. (Reporting from Noel John, Bengaluru. Editing by Alexander Smith and Ed Osmond. Nia Williams.
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Gold falls from near 2-week-high as traders consider US rate cuts
Gold prices fell on Thursday after hitting a two-week high in the previous session. Investors also assessed the probability of a U.S. rate cut in December. As of 1423 GMT, spot gold was down by 0.1% to $4,159.31 an ounce. U.S. Gold Futures for December Delivery fell 0.3% to $4156.30 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 well above the important 4,000 per ounce mark. 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 urging 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 a 85% chance for 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. Silver spot rose by 0.2%, to $53.24 an ounce. Platinum gained 0.7%, to $1.599.10 and palladium rose by 0.2%, to $1.425.79. (Reporting and editing by Alexander Smith, Ed Osmond and Noel John from Bengaluru)
Copper prices set to rise on US rate cuts optimism
The price of copper is expected to rise on Friday, as the Federal Reserve's rate-cutting expectations are bolstered by soft economic data in the United States.
As of 0330 GMT the most traded copper contract at the Shanghai Futures Exchange rose 0.41% to 87,430 Yuan ($12356.37) per kilogram, a gain of 1.66% for the week.
The benchmark three-month copper price on the London Metal Exchange increased 0.50%, to $10,994 per ton. It is expected to finish the week with a 1.99% gain.
London's contract was met with resistance at $11,000 per ton. This shows that there are no major triggers for breaking this level.
Weak retail sales in September and low consumer confidence have led to expectations that the Fed may cut rates next week.
The U.S. Dollar weakened slightly this week but recovered slightly on Saturday. The dollar's weakness makes commodities priced in greenbacks cheaper for investors who hold other currencies. This supports metal prices.
Analysts and traders have said that the move by China to stop 2 million tons planned of copper smelting is largely symbolic at this time.
The relentless growth of capacity has intensified the competition for limited concentrates, driving treatment costs to record low levels.
Analysts said that the market impact will depend on whether or not Beijing takes more drastic measures, like forced production cuts or forced reductions.
Lead gained 0.89% among other SHFE base-metals, while nickel grew by 0.21%, tin climbed 0.42%, and zinc fell 0.33%. Aluminium was not much changed.
Aluminium rose by 0.42% on the LME, while zinc gained 0.65%. Lead moved up 0.10%, nickel 0.18%, and tin 0.58%.
Friday, November 28, DATA/EVENTS - (GMT) 0745 France GDP Final Q3 0745 France Prelim CPI (EU Norm), YY NSA Nov0745 France Prelim CPI (EU Norm), MM, YY NSA Oct0855 Germany Unemployment Rate, Chg. SA Nov1100 France Unemp Class A SA Oct1300 Germany Prelim CPI, HICP Nov
(source: Reuters)