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US data and firmer yields are the focus of gold prices.
Early trading on Tuesday saw gold ease after reaching a six-week-high in the previous session. Rising U.S. Treasury rates and profit-taking dampened sentiment in advance of U.S. data that will likely guide the Federal Reserve’s policy direction. As of 0228 GMT, spot gold dropped 0.4% to $4215.48 an ounce after reaching its highest level since Monday, October 21. U.S. Gold Futures for December Delivery were down 0.6% to $4,247.10 an ounce. Benchmark 10-year U.S. Treasury Yields hovered near a two-week-high touched in the prior session, reducing interest in non-yielding gold. Waterer stated that the markets are cautious because Fed Chair Jerome Powell will not sound as dovish than some of his Fed colleagues. The core Personal Consumption Expenditures price index (PCE), which is the Fed's preferred inflation measure, is expected to be relatively benign on Friday. Tim Waterer, Chief Market Analyst at KCM Trade, said that while gold is showing a weak performance today, the fundamental picture remains unchanged. This includes the anticipated U.S. interest rate cuts which are expected to be beneficial for gold in terms of yield. Powell did not mention the economy or monetary policies in his remarks, which were prepared for a Stanford University address on Monday evening. Investors will be watching the key U.S. economic data this week. This includes Wednesday's ADP Employment Report and Friday's Personal Consumption Expenditures Index, which is delayed from September. According to CME's FedWatch, traders are pricing in a 88% chance that the Fed will cut rates in December. Kevin Hassett, White House advisor, said he was willing to serve as Fed chairman. Treasury Secretary Scott Bessent had hinted at a possible nomination before Christmas. Hassett wants lower rates, just like Donald Trump. Gold that does not yield is usually favored by lower interest rates. SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings increased 0.44% on Monday to 1,050.01 tons from 1,045.43 tonnes on Friday. Silver dropped 1.9% per ounce to $56.88, platinum increased 0.1% to 1,659.23 and palladium rose 0.2% to $1.427.62. (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich)
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Iron ore prices rise as steel consumption and infrastructure demand offset China's weak data
Iron ore prices rose Tuesday as steel consumption and infrastructure demand offset the weak China economic data. As of 0250 GMT, the most-traded contract for January iron ore on China's Dalian Commodity Exchange was trading 0.88% higher. It was 803.5 yuan (113.55 dollars) per metric ton. The benchmark January Iron Ore at the Singapore Exchange rose by 0.37% to $103.95 per ton. According to Chinese broker Galaxy Futures, recent infrastructure demand is up and steel demand is in line with normal seasonal patterns. This allows steel prices to maintain their upward trend on the short-term. According to CreditSights, the global iron ore production is set to increase between 2025-2029. Production in Guinea will be a major growth driver once the Simandou Project comes online. CreditSights said that the sector is expected to be affected by development delays resulting from political and social instabilities, as well resource nationalism. According to Mysteel, the consultancy, shipments from Australia, the top producer, totaled 18.205 million tonnes, down 191,000 tonnes month-on-month. Iron ore prices were impacted by weak economic data in China. A survey conducted on Sunday, the official PMI survey, showed that China's manufacturing activities declined for the eighth consecutive month in November. It is difficult for policymakers to get their activities moving amid a global economic slowdown, an ongoing property crisis and local governments struggling under debt. Coking coal and coke, which are used to make steel, have both gained in the DCE. Everbright Futures, a Chinese broker, reported that coking plants have increased production and are resulting in an increase in the output of coking coke. The first round has also been implemented to reduce coking coal prices, which is causing a slight improvement in steel mill profits. All steel benchmarks at the Shanghai Futures Exchange increased. Rebar increased by 0.64%; hot-rolled coils grew by 0.45%; wire rod improved by 0.44%; and stainless steel firmed up 0.4%.
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Stocks unsteady after bond and bitcoin sales
The stock market made modest gains on Tuesday and traders were cautious after a decline in cryptocurrency and a global selloff of bonds triggered by an upcoming interest rate increase in Japan. S&P futures were stable in early trading, following overnight falls on Wall Street. Japanese government bonds, however, remained under pressure before a 10-year bond auction, following a week-long fall on concerns about the nation’s fiscal outlook. In morning trading, the yields on 10-year JGBs increased by 1.5 basis points. They now stand at 1.88%, a record high for 17 years. Bitcoin, which was a talisman of sentiment, suffered a 5.2% decline on Monday. At $87,000, it is down 30 percent from its October peak. The mood in cryptocurrencies is somewhere between fearful, and resigned, said Jehan Cho, founder of Kenetic Capital. This blockchain venture capital company, with its latest drop, caught investors off guard. Even the most optimistic may decide to hibernate over the winter. MSCI's broadest Asia-Pacific share index outside Japan grew 0.6%, while Tokyo's Nikkei climbed 0.5% after Monday's sharp decline. JAPAN TO RISE, FED TO CUT On Monday, Bank of Japan Governor Kazuo ueda outlined the steps to tightening monetary policy. This heightened expectations that Japan would hike interest rates in this month. The yield on ten-year Japanese government bonds shot up six basis points. Traders sold global bonds, and the yields of ten-year Treasury notes rose 7.7 basis points to 4.08%. The yen has gained strength and held steady on the foreign exchange market over the last 24 hours. It was trading at 155.75 to the dollar on Tuesday. The dollar was pushed back by the move. The euro traded at $1.16 as markets awaited the eurozone inflation figures due later that session. Some investors are beginning to anticipate a more lasting turn down for the greenback, as the U.S. is preparing to reduce interest rates faster and further than other countries. The Federal Reserve is expected to cut rates in December, according to data released on Monday. Manufacturing contracted for the ninth consecutive month in November. However, consumers surpassed analyst expectations by spending $23.6 billion during their online shopping spree. The dollar could fall by the end of the year, according to Tim Baker, a strategist at Deutsche Bank. The dollar has had a bad decade. December was the worst. It has fallen 80% of time and by more than 1% on average. Gold held on to its recent gains, just above $4200 per ounce. The oil prices also rose following drone attacks against Russian supplies. Brent crude futures was eight cents higher on Tuesday at $63.26 per barrel. (Reporting and Editing by Shri Navaratnam).
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Oil prices rise on geopolitical concerns about supply
The oil prices rose in the early trading on Tuesday, for the second session running. Market participants assessed risks arising from Ukrainian drone attacks on Russian energy sites as well as mounting tensions between Venezuela and the United States. Brent crude futures rose by 14 cents or 0.2% to $63.31 per barrel at 0102 GMT. U.S. West Texas Intermediate Crude gained 18 cents or 0.3% to $59.50 per barrel. Both benchmarks rose more than 1% Monday. Caspian Pipeline Consortium announced on Monday it had resumed oil deliveries from one mooring at its Black Sea Terminal following an important Ukrainian drone attack that occurred on November 29. The Russian Kommersant newspaper, citing anonymous sources, reported on Monday that oil loadings have resumed at the single point docking 1 (SPM1), whereas SPM2 was damaged. In a recent note, Ritterbusch and Associates analysts said that "the military action confirms our opinion that peace is unlikely to be reached anytime soon and the diesel/gasoil market is on the verge of pulling up the complex." The Ukrainian president Volodymyr Zelenskiy stated on Monday that Kyiv prioritized maintaining sovereignty and ensuring strong security, while territorial disputes were the most complex. The U.S. ambassador Steve Witkoff will brief the Kremlin Tuesday. ANZ stated that the U.S.'s increasing campaign against Venezuela raises concerns about oil exports being further impacted. A senior U.S. government official confirmed that Donald Trump met with his top advisers in order to discuss the pressure campaign against Venezuela. Trump stated on Saturday that the airspace surrounding Venezuela and above it should be "closed completely," but did not provide any further details. On Sunday, OPEC+ reaffirmed a modest increase in oil production for December, and a pause on increases in the first three months of 2019. This was due to fears that there would be a glut of supply. Ritterbusch said that fundamentals are likely to prevail over the long term. "We still see this deterioration of global balances as a factor in forcing oil prices lower, with the probability in WTI and Brent to $55 and $59 still high," he added.
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Trump rechazo solicitudes de Maduro en llamada, opciones se reducen para el lider venezolano: fuentes
El presidente de Venezuela, Nicolas Maduro, se esta quedando sin opciones para dimitir y abandonar su pais bajo la proteccion de Estados Unidos, tras una breve llamada el mes pasado con Donald Trump, en la que el presidente estadounidense rechazo una serie de solicitudes del lider venezolano, segun cuatro fuentes informadas sobre la conversacion. La llamada, realizada el 21 de noviembre, se produjo tras meses de creciente presion estadounidense sobre Venezuela, incluyendo ataques contra lanchas presuntamente usadas para narcotrafico en el Caribe, reiteradas amenazas de Trump de extender operaciones militares a tierra y la designacion del Cartel de los Soles, un grupo que segun la administracion en Washington incluye a Maduro, como organizacion terrorista. Maduro y su gobierno han negado todas las acusaciones y afirman que Estados Unidos busca un cambio de regimen para tomar el control de los vastos recursos naturales de Venezuela, incluido el petroleo. El presidente venezolano le dijo a Trump durante la llamada que estaba dispuesto a salir de Venezuela siempre que a el y a sus familiares se les garantizara total amnistia, incluyendo el levantamiento de todas las sanciones estadounidenses y el fin de un caso emblematico que enfrenta ante la Corte Penal Internacional, segun tres de las fuentes. Tambien solicito el levantamiento de las sanciones para mas de 100 funcionarios del gobierno venezolano, muchos de ellos acusados ? ?por Estados Unidos de abusos contra los derechos humanos, narcotrafico o corrupcion, segun las tres personas. Maduro propuso que la vicepresidenta Delcy Rodriguez encabezara un gobierno interino antes de convocar nuevas elecciones, segun dos de las fuentes. Trump rechazo la mayoria de sus solicitudes en la llamada, que duro menos de 15 minutos, pero le dijo a Maduro que tenia una semana para salir de Venezuela hacia el destino que eligiera junto con sus familiares. Ese salvoconducto expiro el viernes pasado, lo que llevo a Trump a declarar el sabado que el espacio aereo venezolano debia considerarse completamente cerrado, dijeron dos de las fuentes. Varios detalles de la llamada fueron reportados previamente por el Miami Herald. La fecha limite del viernes no se habia revelado previamente. Trump confirmo el domingo que habia hablado con Maduro, sin dar mas precisiones. La Casa Blanca se nego a dar mas detalles, y el Ministerio de Informacion de Venezuela, que gestiona todas las consultas de prensa del gobierno, no respondio de inmediato a las solicitudes de comentarios. El gobierno de Trump ha dicho que no reconoce a Maduro, en el cargo desde 2013, como presidente legitimo de Venezuela. El Consejo Nacional Electoral declaro a Maduro reelecto el ano pasado tras unos comicios que Estados Unidos y otros gobiernos occidentales calificaron de fraudulentos y en los que, segun observadores independientes, la oposicion gano abrumadoramente. El lunes, al dirigirse a simpatizantes, Maduro juro "absoluta lealtad" al pueblo venezolano. No esta claro si Maduro aun puede presentar una nueva propuesta que incluya un salvoconducto. Trump mantuvo conversaciones el lunes con sus principales asesores para discutir la campana de presion sobre Venezuela, entre otros temas, dijo un alto funcionario estadounidense. Una fuente en Washington informada sobre las conversaciones internas del gobierno de Trump, no descarto la posibilidad de una salida negociada de Maduro, pero enfatizo que persisten desacuerdos significativos y que aun quedan detalles importantes por resolver. La Casa Blanca y el Ministerio de Informacion de Venezuela, que gestiona todas las consultas de prensa del gobierno, no respondieron de inmediato a solicitudes de comentarios. Trump confirmo el domingo que habia hablado con Maduro, sin dar mas detalles. Estados Unidos ha aumentado a 50 millones de dolares la recompensa por informacion que conduzca al arresto de Maduro y ofrece 25 millones de dolares por otros altos funcionarios del gobierno, incluido el ministro del Interior, Diosdado Cabello, quien ha sido acusado en Estados Unidos de presunto narcotrafico, entre otros delitos. Todos han negado las acusaciones. El gobierno de Maduro ha solicitado otra llamada con Trump, segun las tres fuentes. (Reporte de Marianna Parraga en Houston, Matt Spetalnick en Boston y Sarah Kinosian en Philadelphia; reporte adiconal de Steve Holland. Editado por Christian Plumb y Julia Symmes-Cobb)
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China's stock rally begins to gain investor confidence
Fund managers are holding volatile tech stocks in China and picking industrial stocks, betting that a two-year old equities rally will withstand an economic downturn, as valuations, and steady returns, lure foreign investors. China's blue chip index CSI300 is up 16% on the year to date, matching S&P 500. Hong Kong's Hang Seng has risen about 30% and is set for its biggest annual gain since 2017. The mood has changed from the euphoria triggered by stimulus a year earlier, but the ride is getting bumpier. This is especially true as the pressure on China Vanke reminds the market participants that the prolonged property downturn will not be over. Investors and analysts seem to have little concern about the current bull market, claiming that it is only taking a break. Laura Wang, Morgan Stanley's China equity strategist, said: "We think we are only at the beginning stages of a gradual process where foreign investors come back to China." She said that investors had begun to change their minds after seeing the results of this year. China stocks have also defied Sino-American trade friction and climbed thanks to state support, improved corporate governance and big gains for artificial-intelligence-linked stocks after the impressive release of DeepSeek's chatbot. A record HK$1.38 billion ($177 billion) has also been poured into Hong Kong's capital markets, which have seen a revival. Fund manager Xia Fuguang at Shenzhen Rongzhi Investment said that the next leg of bull run would likely be driven primarily by fundamental improvements and growth in earnings. He is also in favor of Beijing's anti-involution campaign, which is a campaign to combat industrial overcapacity, price wars and other issues. Fund managers claim that the valuations of industrial stocks, which are based on anti-involution policies, are also attractive and are attracting investment. Fund manager Wang An explained that "cyclical stocks are relatively inexpensive, so you can build positions at a time when prices are low as anti-involution policy gradually takes root." According to Datayes, over the past three-month period, ETFs that track the CSI Battery Thematic Index have seen net inflows of 13.5 billion yuan, or $1.91 billion. Another 11.2 billion yuan has been invested in funds tracking the CSI Chemicals Sub-industry Index. Net outflows of 31.1 billion yuan were recorded by funds tracking the tech-heavy STAR 50 Index during the same time period. Xu Jie is a fund manager from Shanghai at Yuanzi Investment Management. He has purchased solar energy, steelmaking, and coal stocks. Xu, citing possible inflows of foreigners and depositors, said that there is "no doubt" the slow bull run in China will continue into next year. The Shanghai Composite Index, and Hong Kong's Hang Seng, are currently trading at about 12 times earnings. According to LSEG, this compares to a multiple 28 for the S&P 500 and a ratio 21 for Japan's Nikkei 225. The FTSE 100 Index in Europe has a ratio of 21. Whether you consider valuation or liquidity we are only halfway through the bull market, said Wang Wendi. Distribution manager at Shanghai Intewise Capital. The company has increased its stakes in steelmakers and chemical producers. Zenith & Xenium Capital is another Chinese fund house that has also made bets on cyclical sectors like photovoltaic companies, refiners, chemical processors, and new energy. NEW CHINA For the past few decades, foreigners have been concerned about policy risks in China. They have kept their allocations low while U.S. investments and global investments performed well. Investors have said that they are not 100% in China. Factory activity has slowed down for the eighth consecutive month in October. Vincenzo Vedda is the global chief investment officer of DWS. He said, "We're not sure about China." China no longer provides real-time information on foreign investment. The latest figures from the central bank show that foreign holdings reached 3.5 trillion Yuan by the end of September. This is still well below the peak of 3.9 trillion Yuan in 2021, but it does reflect some strength. Florian Neto is the head of Asia investment at Amundi - Europe's largest asset manager. He is neutral, but makes a distinction between "old China", where exporters and developers were facing economic headwinds, and "new China", where AI and Biotech firms could expect earnings growth. He said that the market is driven by innovation, technology and innovative drugs. We are looking forward to adding more. Investors who look at their returns for the full year may decide to buy in 2026. Kristina Hooper, chief market analyst at Man Group New York, said that other stock markets performed better this year than the U.S. "I think most investors will recognize this paradigm shift by January... I believe that encourages looking for opportunities outside of the U.S., especially when valuations are so stretched."
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Sudan's RSF paramilitary claims to have taken control of Babanusa, West Kordofan
The paramilitary Rapid Support Forces of Sudan (RSF), a group that aims to protect the oil-producing South, announced on Monday it had taken full control over Babanusa. The RSF released a statement saying that it "liberated" Babanusa, in West Kordofan State -- the latest frontline of the war in Sudan. It did so by repelling "a surprise assault" from the Sudanese Army in what they called "a clear breach of the humanitarian ceasefire." Donald Trump, the U.S. president, said on November 19 that he would intervene in order to end the conflict which erupted in April 2023. In November, the United States, United Arab Emirates (UAE), Egypt, and Saudi Arabia, collectively known as the Quad, proposed a plan that would include a three-month ceasefire followed by peace negotiations. RSF said it accepted the plan but attacked army territory shortly after with drone strikes. The RSF's attack on Babanusa builds upon the momentum the group gained after taking al-Fasher in October, the last army holdout in Darfur. (Reporting and writing by Menna Alaa el Din; editing by Cynthia Osterman; Muhammad Al Gebaly, Alexander Dziadosz, and Alexander Dziadosz)
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Algoma Steel will cease blast furnace operations and lay off 1,000 employees as tariffs bite
Algoma Steel, a Canadian steelmaker, announced on Monday that it will lay off 1,000 workers and close its blast-furnace and coke production operations in Ontario by early 2026 because of tariff pressures. Tariffs of 50% on steel imported from Canada have severely restricted Canadian producers' access to the U.S. Algoma is based in Sault Ste. Marie has announced that it will switch to electric arc-furnace steelmaking in early 2026. This is a year sooner than originally planned. Algoma Steel said that the North American steel industry is highly integrated and the tariffs levied by the U.S. have had a significant impact on the market. The company reported direct tariff costs totaling C$89.7 Million ($64.10 Million) for the quarter ended September 30. About half of the total steel volume was shipped to the U.S. Algoma is planning to issue approximately 1,000 notices of layoffs that will take effect on March 23, 2026. The company employed 2,818 people full-time as of December 31, 2024. The company stated that "this transition is needed to protect Algoma’s future against these external and extraordinary market forces."
Market keeps a focus on supply risk as copper prices ease from their peak
The copper price fell from its record high as investors focused on the future risks of supply, after China's planned production cuts and Codelco’s premium increase.
As of 0240 GMT the most traded copper contract at the Shanghai Futures Exchange had fallen 0.15% to 88,700 Yuan ($12,535.33) a metric ton after reaching a record-high of 89920 yuan per ton earlier in this session.
The benchmark three-month copper price on the London Metal Exchange fell 0.77%, to $11,165 per ton.
Investors are still assessing the impact of Chinese smelters’ plan to reduce production by 10% in 2019.
Analysts at Chinese broker Jinrui Futures stated in a report that the plan of smelters to reduce output confirmed the view that supply of refined Copper will become tight.
The Codelco premiums are also a focus, as they saw an increase in the number of offers for supply on a term basis next year. These new offers are aimed at buyers who can profit from arbitrage between Comex and LME by delivering their copper to U.S. warehouses, which adds to the concern that supply of copper elsewhere will be limited.
The U.S. Dollar continued to decline as the Federal Reserve's December rate cut remained a high priority.
The dollar's weakness supports the market, as commodities that are traded in greenbacks become cheaper for investors who use other currencies.
Zinc rose by 0.91% among other SHFE metals. Lead gained 0.29%. Nickel grew by 0.12%. Aluminium grew 0.07%. Tin fell 0.85%.
On the LME, zinc, nickel, and lead all fell 0.39%. Tin also dropped 0.87%.
Tuesday, December 2, DATA/EVENTS - (GMT) 0700 UK National House Price mm,yy Nov 1,000 EU HICP Flash Nov 1000 EU HiCP-X F,E,A,T Flash MM Nov 1000 EU Unemployment rate Oct ($1 = 7.760 Chinese Yuan Renminbi). (Reporting and Editing by Dylan Duan, Lewis Jackson, Rashmi aich.
(source: Reuters)