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Silver sets new record for silver; gold heads to fourth monthly gain
Gold spot rose 1% on Friday to a new two-week-high, amid expectations that the Federal Reserve would lower interest rates in the coming months. Silver also hit a record high. By 10:09 am, spot gold had risen 0.9% to $4.192.78 an ounce. ET (1510 GMT), was at its highest level since November 14. It was also on track for a weekly gain of 2.9%. Bullion is set to rise 4.6% this month and will be on course for its fourth straight monthly gain. Silver reached a new record high of $55.33 an ounce. This is a 3.5% increase for the session, and 12% for the entire month. After an outage that lasted for several hours, trading in the currency platform, as well as futures covering foreign exchange, Treasuries, and stocks, resumed at around 1330 GMT. U.S. Gold Futures for February Delivery rose by 0.61%, to $4,227.60 an ounce. FED RATE IN FOCUS Bart Melek is the head of commodity strategy at TD Securities. He said that some investors are returning to gold because they expect a continued slowdown in the economy. Gold does well when interest rates are low. Recent dovish comments from Fed Governor Christopher Waller, New York Fed president John Williams and softer U.S. data after the government shutdown have increased expectations that the central banks will reduce interest rates next month. The traders now see 89% of the chance that a rate reduction will occur in December. This is up from 50% just last week. Jim Wyckoff is a senior analyst with Kitco Metals. He said that "the technical charts of silver have become more bullish over the last week or two, which invites chart-based traders to be on the long side in the silver market." The demand for gold was muted across the major Asian markets during this week as high prices curbed consumer buying, even as India began its wedding season. The removal of the tax exemption for gold purchases in China has slowed consumer demand. Palladium rose 5.6%, to $1.519.37, and is set to gain 10.7% on a weekly basis. Platinum was up 2.9% at $1,655.14, a 9.7% increase for the week. (Reporting and editing by Rod Nickel in Bengaluru)
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Investors were rattled by exchange outages before CME's collapse
CME Group, one of the largest exchange operators in the world, suffered an outage lasting several hours on Friday. This affected trading on its currency platform, as well as futures including foreign exchange, commodities and Treasuries, and stocks. Market participants reported that the outage began early in Asia and ended mostly by morning U.S. trade. It was one of longest in recent years. Since the early 1980s, exchange outages caused by bugs in software, hardware failures and cyberattacks have caused disruptions to markets and undermined investor confidence. Check out some of the major outages that have occurred: A power outage on August 14, 2024, caused the Moscow Exchange to stop trading for over an hour. The Swiss SIX Stock Exchange experienced its worst outage in recent history on July 31st, 2024. A technical glitch caused the trading to be halted twice for several hours across stocks, bonds and mutual funds. Data and services of LSEG Group were unavailable on July 19, 2024, causing some disruptions in the financial markets. On that same day, a broader tech failure also caused a global uproar. On June 3, 2024, a glitch at the New York Stock Exchange caused massive swings of shares in Berkshire Hathaway (Berkshire Hathaway) and Barrick. Trading halted in dozens of companies. London Stock Exchange reports an incident on October 19, 2023, which forced them to stop trading in smaller UK shares. However, blue-chip stocks were not affected. Refinitiv's news and data platform Eikon, which is operated by the London Stock Exchange Refinitiv, experienced a prolonged outage on August 2, 2021. This was its third such incident that year. * Euronext, the pan-European financial market operator, experienced technical glitches that knocked index derivatives trading out for almost four hours on June 17, 2021. The Australian stock exchange had to stop trading for 20 minutes due to a software issue on November 15, 2020. ASX, the operator of the bourse, re-opened trading one day later. Qontigo, the index operator, informed its clients that Europe's STOXX key indexes would open more than an hour later on November 2, 2020 due to an "input data problem". A hardware failure brought the Tokyo Stock Exchange to a halt on October 1, 2020, the worst outage ever for the third largest equity market in the world. New Zealand stock exchange resumes trading on August 28, 2020, after four days of disruptions due to cyberattacks. In July 2020, a software glitch caused the trading to be temporarily halted on Germany's electronic trade platform Xetra. This was the second time that the system had been down since April. May 8, 2020: A software error caused the Moscow Exchange to suspend stock trading for 42-minutes. TMX Group (Canada's largest stock exchange operator) experienced its second outage within two years when a hardware problem caused order entry problems, resulting in a shutdown of trading for almost two hours across three local bourses. Nasdaq Inc.'s Nordic stock market and Baltic stock market were shut down twice by technical issues in one day, due to connectivity problems. Hong Kong Exchanges and Clearing has suspended trading in derivatives for the afternoon on September 5, 2019. This is due to a bug that caused connectivity issues with the Hong Kong Futures Automatic Trading System. August 16, 2019: The longest trading outage in the history of the London Stock Exchange was caused by a software problem that delayed the start for nearly two hours. A technical problem with trade reporting caused the New York Stock Exchange of Intercontinental Exchange to suspend trading for a portion of April 25, 2018. This affected five stocks including Alphabet and Amazon. Singapore Exchange has suspended trading in securities for the second half of the day because duplicate confirmation messages were generated. A technical problem caused the NYSE to suspend trading on July 8, 2015. March 31, 2015: ICE’s NYSE Arca suffered a technical problem that caused some of the most popular Exchange-Traded Funds to be temporarily unavailable for trading. Some investors paid more for their stocks than they would have otherwise. A software bug caused connectivity problems to a data feed for the industry. May 18, 2012: Facebook’s $16 billion initial publicly offered on the Nasdaq market was marred with technical glitches, which resulted in an opening that was delayed and left many traders in the dark about the trades that had been completed for several hours. This led to significant losses at a number of firms. Bats Global Markets was forced to cancel their IPO after a series glitches due to a software bug. May 6, 2010: Uncertain market conditions coupled with an aggressive, massive sell order of a popular futures product triggered a “flash crash” that sent the Dow Jones Industrial Average plummeting over 1,000 points and temporarily wiping out almost $1 trillion worth of market value. On August 2, 1994, a squirrel chewed a power cable in Trumbull (Connecticut), where Nasdaq's servers were located. The backup power system of the exchange failed to kick in and caused a half-hour outage. On December 9, 1987, a squirrel had chewed through the power cable of Turnbull. This set off a series of events which shut down Nasdaq trading for almost an hour and half. * LSEG pays news.
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China's BYD recalls 89,000 plug-in hybrids due to battery safety hazards
BYD is recalling 88,981 hybrid plug-ins due to a possible battery safety issue, China's regulator of the market said in an announcement on Friday. This comes weeks after BYD's biggest recall. The Qin PLUS DM i models that were affected were manufactured between January 2021 to September 2023. "There may be limited power output because of problems with consistency during production", said the notice. The market regulator stated that in extreme cases they would not be able drive in pure-electric mode. It added that the recall was the result of an investigation into a defect it initiated. BYD has recalled over 210,000 vehicles in the past year. This includes nearly 7,000 plug-in hybrid SUVs. BYD announced in mid-October its largest recall to date of over 115,000 Tang and Yuan Pro cars produced between 2015 and 2020 due to design defects, battery safety risks and other issues. BYD sales in October dropped by 12% compared to the same period a year ago, following a 33% decline in profit for the third quarter. BYD recalled 97,000 Dolphin and Yuan Plus electric vehicles in September 2024 due to a defect involving the steering control unit, which could have caused a fire. (Reporting and editing by Beijing Newsroom; Joe Bavier, Alexander Smith).
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Stocks finish November with a strong performance, boosted by Fed's cut in bets. Trading outage affects futures.
The global stock market entered a volatile final session on Friday as an outage in the exchange operator CME Group disrupted trading of a wide range of futures contracts on currencies, commodities and Treasuries, further reducing liquidity. CME's datacentres were down when U.S. investors returned from Thanksgiving for a short session on Friday. CME's EBS platform had resumed some currency trading by 1305 GMT. The STOXX 600 index in Europe was essentially unchanged for the day. It had gained 0.5% during November, its lowest monthly performance since June. The S&P 500 will experience its first monthly drop since April. It fell 0.4% in November. However, it recovered from a two-month-low a week earlier, which implied a 5% month-to date decline. Choppy November The global equity markets were unusually volatile in November of this year. Concerns about the sky-high valuations of tech stocks shook the markets, while a U.S. shutdown ended after 43 days. Bitcoin, which is a good indicator of risk appetite among investors, fell 16% in November. Federal Reserve officials are cautious because the shutdown of the federal government has not produced any economic data. However, heavyweights such as New York Fed President John Williams and Fed Governor Christopher Waller have expressed support for a cut in rates next month. This has been a key factor to the recovery of stocks. Samy Chaar, an economist at Lombard Odier, said that volatility is usually expected in September and October. We've seen it in November but have recovered the majority of it. "We had estimated a December cut of 30%, but now we are at over 80%. "I think that's a very good reason for the rally at month's end," he said. 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. BOJ HIKE IS IN VIEW The dollar gained a little ground against a basket major currencies but was heading for its biggest weekly drop since July. It was almost unchanged over the course of the month. The Japanese yen was slightly stronger and the dollar fell 0.24% to 156.11yen. Last week, the yen reached a 10-month-low of 157.9 yen. Investors are now watching for any signs of intervention by Japanese authorities following weeks of verbal attempts at stopping its relentless decline. 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. In a recent note, MUFG strategists stated that "today is also the end of the month and FX performance will often be determined by these less predictable flows." Markets bet on the end of rate-cutting 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 reduce rates. The euro slipped 0.2%, to $1.157. This represents a 0.3% gain for the month. OIL, GOLD Up The U.S. continued to push for the peace plan in the Ukraine conflict, which led to a drop in oil prices on Friday. Brent crude futures reversed gains and traded down 0.25% to $63.18 per barrel. This is down nearly 2.5% from November. The spot gold price was up 0.5%, at $4,177 per ounce. This brings the monthly gain of around 4.5%.
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Putin hosts Hungary Orban to discuss energy and Ukraine
On Friday, Russian President Vladimir Putin welcomed Hungarian Prime Minster Viktor Orban to Moscow. This was a rare visit of an EU and NATO leader. He said he would be pleased for Budapest host a Russia-U.S. Summit with President Donald Trump. Orban called for detailed discussions on Russian oil and natural gas supplies. The Hungarian president, who met Putin for the fourteenth time, maintained close ties to the Kremlin, despite Russia’s war in Ukraine. This led to 19 rounds of EU sanction and a sharp reduction in the reliance on Russian oil. He has often questioned Western aid to Kyiv. Orban who has also warm relations with Trump was scheduled to host a Putin and Trump summit in October, but the U.S. president pulled out saying that he didn't want it to waste time. In televised remarks Putin thanked Orban for the offer of the venue and told him he still welcomed the meeting to Budapest. The talks took place as Trump's envoy Steve Witkoff prepared to meet Putin in Moscow in the next week to renew efforts to end this war. Orban stated that "we hope very much" that the peace offers on the table would lead to peace and a ceasefire. He had earlier posted on Facebook that he would be visiting Moscow to "ensure Hungary's supply of energy for the winter and in the next year." After Orban made a strong case for relief during an amicable meeting with Trump in Washington, the U.S. granted Hungary an exemption to sanctions so that it could use Russian oil and natural gas. A potentially unwelcome move for Moscow is that Hungary signed a nuclear cooperation pact with the U.S. for the purchase of fuel and technology to store spent fuel in Paks 1, a Russian-built facility south of Budapest. Rosatom, the Russian nuclear company, is building a new extension for its plant. The project was originally planned in 2014 but has been delayed by years. The Foreign Ministry of Hungary said that Hungary imported more than 7 billion cubic meters of natural gas and 8.5 million tons of crude from Russia in 2018. Putin said Hungary's position regarding the Ukraine war was "balanced". He also stated that bilateral trade fell by 23% due to "external sanctions" last year, but would recover by 7% by 2025.
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Tin at 3-1/2-year High on Congo Mine Supply Fears
The price of tin rose to its highest level in over three-and-a-half years on Friday, as fears of shortages were stoked by talk of mine supply disruptions occurring in the Democratic Republic of Congo. However, traders denied rumors of a force majeure. As of 1046 GMT, the London Metal Exchange reported that three-month tin was up by 1.9% to $38,760 per metric tonne. Metal used for circuit-board soldering jumped as high as 2.3% in the morning session, to $38,930. This is the highest since May 9, 2020. Broker Marex stated in a report that the extension of the ban on manual mining to two DRC provinces, and the escalating conflict east of the DRC have "raised concern about disruptions in transport from the Bisie Mine which accounts for around 8% of global production of tin ore." However, traders denied that the Bisie mine had declared force majeure. Marex said that although Myanmar's Wa State issued mining permits, the actual production resume is significantly delayed due to rainy season issues, equipment problems, and labour shortages. Other metals also broke through $11,000 per ton, with copper reaching $11,010, after China's Smelter Group announced that its members will reduce mine-fed production by 10%. As of 1046 GMT the metal used for power and construction rose 0.5% to $10,998.50, on track for a weekly increase of 2%, and an increase of 1% in this month. John Meyer, an analyst at SP Angel, said: "I can see copper reaching $11,000 before Christmas again and then pushing up to $11,500 by the beginning of next year." He cited a number of mine supply restrictions. Shanghai Futures Exchange monitors copper inventories in warehouses The bourse reported on Friday that the number of tons traded in the last week fell by 11.5% to 97 930. Zinc increased by 0.6%, to $3,031, and aluminium rose by 0.6%, to $2,844.50. Nickel rose 0.4% to 14,885 while lead grew 0.2% to 1,991. (Reporting and editing by Sonia Cheema, Maju Samuel and Sonia Cheema; Additional reporting by Polina Duan and Dylan Duan)
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Oil prices will be under pressure in 2026 due to the soaring supply
A poll on Friday showed that oil prices will remain low in 2026 as a result of soaring supplies and modest growth in demand. Geopolitical risks may also limit further losses. In a survey of 35 economists, analysts and other experts, it was predicted that Brent crude will average $62.23 per barrel by 2026. This is down from the October forecast of $63.15. According to LSEG, the benchmark has averaged 68.80 dollars per barrel in 2025. The average price of U.S. crude oil is expected to be $59.00 per barrel. This is lower than the $60.23 expectation from last month. Zain Vawda is an analyst with MarketPulse, by OANDA. He said that the crude oil market will be marked by an unprecedented and large global oversupply in 2026. Nevertheless, "ongoing risks" will keep a premium on the risk, which prevents the price from falling as low as a high supply would suggest. The majority of analysts expect the oil markets to be in surplus by 2026. Estimates range from 0.5 to 4.2 million barrels a day, as opposed 0.19-3.0 in the previous poll. According to a calculation based upon the report, the International Energy Agency's forecasts imply a surplus of 4,09 mbpd by 2026. Meanwhile, OPEC's monthly report suggested a surplus of 20,000 bpd if it keeps pumping oil at the rate seen in October. OPEC+ plans to halt production increases in the first quarter 2026. The poll indicated that Brent was expected to average $60.23 during this period. Many poll participants believe that OPEC+ won't increase production aggressively in 2026 due to persistent concerns about oversupply. We remain sceptical that the group will reverse the unwinding again. Kim Fustier is the head of European Oil & Gas Research at HSBC. She said that it will only consider this option if Brent stays below $55/barrel over a long period. The poll revealed that global oil demand is projected to increase by 0.5-1.2 million barrels per day (mbpd) in 2026. Matthew Sherwood is the lead commodities analyst for EIU. He said that analysts expect U.S. Shale production to decline by 2026. This, combined with geopolitical risk, "should set a floor price of $60/barrel." Analysts said that the U.S. sanctions against Russia's largest oil companies Lukoil, and Rosneft could cause a brief disruption in supply, but they are unlikely to impact the market for a long time. They expect Russian barrels to enter markets through shadow fleets and middlemen. Analysts noted that peace talks could bring back more barrels to the market and increase supply pressure.
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Codelco sells copper to US clients at a record-high premium of $500 per ton above LME prices
Two sources familiar with this matter claim that Chile's state owned copper producer offered to sell copper to U.S. clients with contracts based upon London Metal Exchange copper price at a record premium of over $500 per metric ton. The premium is added to the benchmark LME price and reflects fundamentals of demand and supply. The premium also covers transport costs and taxes. Codelco didn't immediately respond to our request for a comment. The LME copper price reached a record high of $11,200 per ton on the 29th October due to expectations that shortages would occur, partly as a result of disruptions such as accidents at mines located in Indonesia and Chile. On Comex, the copper price hit a record of $5.8950 per lb, or $12,996 per ton, on the 24th of July, ahead of an announcement about whether the United States will impose tariffs against imports of this metal, which is used in construction and power industries. The 50% tariff on imported copper that was introduced on August 1 has been lifted for refined copper. The copper prices on Comex are now lower as the levies on U.S. imports of copper continue to be reviewed. Howard Lutnick, the Commerce Secretary, is expected to give Trump an update on the domestic copper market by June 2026. Amy Lv and Lewis Jackson reported; Tomaszjanowski edited.
LME will lower client fees by 2026 to increase liquidity
London Metal Exchange announced on Friday that it will reduce transaction fees to its customers in order to increase liquidity on the LMEselect platform and support physical market trading. The LME announced that the electronic trading system's client trading and clearing fees will be reduced by 7.4% to 8.5 percent.
The bourse announced that member electronic transaction fees would be subject to a "inflationary" increase of between 3.4% and 3.7%. However, it added that "all-in transaction costs" for an outright client trade on LMEselect will fall by 4.5%.
The 148-year old exchange announced that the new fees would take effect on January 1, with the exception of client transaction fees which will be effective from March 1, 2026, to allow members time to implement any changes to procedures.
In a statement, LME CEO Matt Chamberlain stated that "While we think that higher fees would be appropriate for inter-office trading that is more bespoke, we are committed to maintaining lower trade fees on physical markets, such as Ring Trades and short-dated Carry Trades, across all venues." (Reporting and editing by Joe Bavier; Tom Daly)
(source: Reuters)