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Investors cash out as gold rally cools, dollar edge higher
Gold prices fell on Wednesday. They were dragged down by a slight recovery in the dollar, and by profit-booking. The precious metal had risen to a three-week-high a day before on the expectation of further interest rate reductions by the Federal Reserve. As of 0640 GMT spot gold was down 0.2% to $4,116.65 an ounce after reaching its highest level since October 23. U.S. Gold Futures for December Delivery edged up 0.1% to $4,121.70 an ounce. Tim Waterer, KCM Trade's Chief Market Analyst, said that the dollar's decline has helped gold and silver. Both metals have seen gains in this week. Gold is trading above $4,100, and the precious metal will continue to move higher if U.S. macroeconomic data continues to support additional monetary policy ease. The dollar index was 0.1% higher than its rivals, and set to snap a five session losing streak. This made gold less appealing for holders of other currencies. The U.S. Senate approved a deal Monday to restore funding for the federal government after a record-long shut down that affected millions of food benefits, caused hundreds of thousands of federal employees not to be paid, snarled up air traffic and delayed the release economic data from the government. Members of the U.S. House of Representatives headed back to Washington to vote on a measure that could end the shutdown. According to CME's FedWatch, traders are now pricing in an approximately 68% chance that the U.S. Central Bank will reduce rates by 25 basis point next month. This is up from 64% the previous session. Gold that does not yield tends to perform well when interest rates are low and economic uncertainty is present. Fed Governor Stephen Miran stated on Monday that a rate cut of 50 basis points would be appropriate in December. He noted that the inflation rate was falling, while the unemployment rate was rising. SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings increased 0.41% on Tuesday to 1,046.36 tons from 1,042.06 tonnes on Monday. Silver spot rose 0.5% per ounce to $51.46, platinum fell 0.3% to 1,580, and palladium declined 0.7% to $1434.25.
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Nextchem, an Italian company, plans to go public when the market recognizes energy transition's value
Nextchem, an energy transition unit within the Italian engineering group Maire aims to be listed, according to its managing director. He added that the listing will happen once the parent company deems the market value high enough. In an interview, Nextchem's executive Fabio Fritelli said: "We are prepared to list as soon as 2026. But we are not in any hurry." Nextchem, a company that develops technologies to decarbonise industry and energy, reported last month a nine-month core profit of 80 million euro ($93.30 millions), an increase of 31% on yearly basis. Fritelli stated that Maire's market value is based on the unit’s 2025 results. This value is well above the price tag of 1.2 billion euros the market currently assigns to Nextchem. He said that the gap is a reflection of a difficult period for the sector as it transitions to a clean energy future amid the political changes in the United States. The managing director stated that the current market multiple is around 10-12. This is a low multiple based on core earnings, which is used to determine a company's worth. Only when the market is prepared to accept a multiple that is closer to the average historical sector multiple of 15-16, or even higher, will we consider an IPO." Maire owns 82% of Nextchem. Azzurra Capital, an investment fund, holds the remaining 8%. Fabrizio di Amato, Maire's principal shareholder, and Abu Dhabi investor Yousef Al Nowais both own 5%. Fritelli stated that Nextchem was working on the acquisition of two Italian companies by the end this year, which could total between 100-150 million euros. Nextchem has partnered with newcleo, a small modular reactor company. Fritelli stated that Nextchem would eventually increase its stake in newcleo to 5%. Newcleo announced on Monday that it is considering building 20 nuclear reactors in the United States. It cited new investment opportunities. "Newcleo went to the U.S. where it found partners who had much deeper pockets. Fritelli warned that there is a danger of it accelerating investment in the U.S., at the expense Europe. ($1 = 0.8575 euro) (Francesca Landini contributed additional reporting, Gavin Jones edited the article)
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Why do multilateral banks face pressure to reform their policies? ?
World Bank and multilateral development bank (MDB) are being pressured to provide more assistance to poor countries that are suffering from energy crises and climate disasters. What you should know is: What are Development Banks and what do they do? These banks, which can be either domestic or international, are funded primarily by national budgets and help to tackle development challenges with technical assistance grants and low cost loans. Some banks may have a singular goal in mind, like subsidizing housing for farmers or helping them through difficult times. Many international or "multilateral" development banks, such as the World Bank and African Development Bank, have broad mandates that include reducing poverty or driving economic progress. These banks, with their high credit ratings can offer better loan terms and take a longer-term view of investment potential. This is especially important for countries in developing regions that have less access to the capital markets. Why are they being asked to reform? The countries are essentially asking the MDBs for more funding and to move faster to assist countries in reducing greenhouse gas emissions, preparing for rising sea levels and hotter days, and addressing other challenges associated with a warmer climate. MDBs are key players in the distribution of climate finance, especially for projects that have no clear return on investment other than saving lives. These banks have not moved as much money as experts at the U.N. say is necessary. MDBs distributed $137 billion of climate finance last year. Nearly 40% went to wealthy countries, and only 30% was allocated to adaptation projects. According to a U.N. Report released last week, developing countries will need $310 billion for just adaptation by 2035. Experts estimate that the annual bill for all climate finance will be in the trillions of dollars, including clean energy initiatives to reduce carbon emissions. The MDBs are hoping that the reforms will attract more private investments to their projects. The banks mobilized another $132 billion in private investment for climate action last year. What is likely to happen at COP30? The COP30 summit is going to put pressure on countries to demonstrate progress in increasing climate finance beyond the commitments made. The countries that finance these banks, and those who sit on their boards play a major role in determining the pace and direction for reform. A group of MDBs released a statement on Monday reaffirming its commitment to "accelerate" and "scale up" their support for countries. The statement also included guidelines for attracting private money for nature investments. Many groups have also announced new deals with developing countries. The European Investment Bank, for example, pledged $350 million on Tuesday to support women-led business and renewables within the Amazon region. What has the World Bank done so far? As part of the so-called Evolution Roadmap, which aims to increase lending capacity and accelerate approvals, Washington's World Bank is examining a number of changes. Some ideas include making sustainability criteria or resilience criteria for loans, and prioritizing projects that secure essential public goods. This year, the reform efforts of the bank have been complicated by the United States' biggest shareholder. The United States has pushed back against the bank's mandate including climate action as well as calls for a focus on poverty reduction and development. (Reporting and editing by Katy Daigle, David Gregorio, and Simon Jessop)
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Oil prices dip after surge as markets eye US government reopening
The oil prices dipped on Wednesday, but they held most of the gains made in the previous session. This was due to expectations that the end of the longest U.S. shutdown would boost demand for crude in the world's largest consumer nation. Brent crude futures fell 22 cents or 0.34% to $64.94 per barrel at 0625 GMT, after rising 1.7% on the previous day. U.S. West Texas Intermediate Crude was down 22 cents or 0.36% to $60.83 per barrel after rising 1.5% the previous session. The U.S. Republican-controlled House of Representatives is set to vote on Wednesday afternoon on a bill, already signed off by the Senate, that would restore funding to government agencies through January 30. In a recent note, IG analyst Tony Sycamore said that a reopening of the government would increase consumer confidence, economic activity and demand for crude oil. The end of the U.S. shutdown, which disrupted thousands of flights over the past few days, could lead to an increase in travel and jet-fuel consumption in advance of the holiday season. In its World Energy Outlook, published on Wednesday, the International Energy Agency predicted that oil and natural gas consumption could continue to rise until 2050. The IEA forecast is a departure from its previous expectations that the global oil demand will peak in this decade. This was because the international organization has moved from a method of forecasting based on climate commitments to one which only takes into consideration existing policies. According to the current policy scenario, last used in 2019, demand will increase by 13% between 2024 and mid-century. On Wednesday, the Organization of Petroleum Exporting Countries (OPEC) and the U.S. Energy Information Administration are also expected to release their monthly outlooks. The sanctions imposed by the United States against Russia's largest oil producers, Lukoil, and Rosneft are causing a further increase in prices. In response to the sanctions, Chinese refiner Yanchang Petroleum has sought non-Russian crude oil for its latest tender. Sinopec's Luoyang Petrochemical, a Sinopec subsidiary, shut down for maintenance. Last month's measures were the first direct sanctions imposed on Russia by U.S. president Donald Trump since he began his second term. (Reporting and editing by Christian Schmollinger, Saad Sayeed and Colleen Waye)
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Draft shows that Japan will pledge bold spending increases in its stimulus package
According to a draft version of the stimulus package presented by premier Sanae Takaichi on Wednesday, Japan's government is expected to pledge to increase its spending "without hesitation" in order to help an economy that's on the verge of emerging from stagnation. The draft doesn't mention how much money will be spent, but it does call for "bold strategic" investments in growth and crisis management areas. This is a clear indication that the package will include hefty spending. The draft said that the government would spend "boldly and without hesitation" on the necessary policies. Drafts of the package showed that it would include lower utility bills and gas subsidies, assistance to businesses affected by increased U.S. Tariffs, and an increase in defence expenditure. According to the draft, the government will also encourage investment in key growth sectors such as artificial Intelligence (AI), semiconductors, and shipbuilding. Takaichi’s administration will finalise this package in the next few weeks and prepare a supplementary budget to cover a portion of the expenditure. Analysts at Daiwa Securities stated in a research report that "the size of the package" will be large, as Japan's economic needs still fiscal support. They also noted the long list areas in which the administration has promised to invest. They said: "We won't surprise ourselves if the spending funded by this extra budget reaches up to 20 trillion yen (133 billion dollars)."
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The US Congress is ready to resume work in the morning.
Gregor Stuart Hunter gives us a look at what the future holds for European and global markets. The U.S. Government is about to reopen, restoring potential pay for unpaid federal employees and ending the drought of economic data which has left the Federal Reserve virtually blinded for more than one month. The latest sign that normalcy is returning could be Congressmen taking advantage of the free publicity. Thousands of flights have been delayed or cancelled due to the shutdown. Some Congressmen are carpooling with their colleagues, or taking a 16-hour Harley Davidson across the country to return to Washington D.C. in order to reopen government. The Republican-controlled House is due to vote later today on a compromise that would restore funding to government agencies and end a shutdown that started on October 1 and is now the longest in U.S. history. The dollar was able to rise from its lowest level for the month as optimism about the end of the shutdown grew. The U.S. S&P500 e-minis futures are slightly higher before the vote. This follows a third day of gains on the benchmark index for Tuesday. MSCI's broadest Asia-Pacific share index outside Japan is up 0.3%. Tokyo's Topix index rose 1%, setting a new record. SoftBank Group's losses for the month to date have risen by up to 25%, despite its 10% fall. Despite this, the shares of Japan's largest tech sector investor are up more than twice as much in 2018. But it's still not all bad from the AI patch. Advanced Micro Devices' shares rose 4.8% after-hours, boosted by the company's expectations that it will post $100 billion in annual data center chip revenues within five years and more than triple earnings. Early European trading saw pan-regional futures up 0.3%. German DAX Futures rose 0.4%. FTSE Futures were flat. The following are key developments that may influence the markets on Wednesday. Earnings: Infineon Technologies Experian PLC SSE PLC Economic Data CPI for Germany in October Debt auctions: Germany: Government debt for 21 and 31 years
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Investors cash out as gold rally slows down, dollar edge higher
Gold prices fell on Wednesday. They were dragged down by a rebounding dollar and profit booking after bullion had risen to a three-week-high in the previous session, on the expectation of Federal Reserve interest rate reductions next month. As of 0421 GMT spot gold was down by 0.5% to $4,107.41 an ounce after reaching its highest level since October 23. U.S. Gold Futures for December Delivery edged down 0.1% to $4,113.80 an ounce. Tim Waterer, KCM Trade's Chief Market Analyst, said that the dollar's decline has helped gold and silver. Both metals have seen gains in this week. Gold is trading above $4,100, and the precious metal will continue to move higher if U.S. macroeconomic data continues to support additional monetary policy ease. The dollar index edged up 0.1% against its rivals, and was on track to snap a five-session losing streak. This made gold less appealing for holders of other currencies. The U.S. Senate approved a deal Monday to restore funding for the federal government after a record-long shut down that affected millions of food benefits, caused hundreds of thousands of federal employees not to be paid, snarled up air traffic and delayed the release economic data from the government. According to CME's FedWatch, traders are now pricing in an approximately 68% chance that the U.S. Central Bank will reduce rates by 25 basis point next month. This is up from 64% the previous session. Gold that does not yield tends to perform well when interest rates are low and economic uncertainty is present. Fed Governor Stephen Miran stated on Monday that a rate cut of 50 basis points would be appropriate in December. He noted that the inflation rate was falling, while the unemployment rate was rising. SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings increased 0.41% on Tuesday to 1,046.36 tons from 1,042.06 tonnes on Monday. Other than that, silver spot fell by 0.4%, to $51.05 an ounce. Platinum dropped 0.4%, to $1.578.95, and palladium was down nearly 1%, to $1.431.47.
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Asian markets are advancing as US shutdown is set to end
The U.S. Congress appeared to be on track to end the shutdown, and traders were looking for guidance in the absence any government data. The broadest MSCI index of Asia-Pacific stocks outside Japan rose by 0.4%, as House of Representatives members prepared to vote on legislation that would restore funding for government agencies and bring an end to the shutdown which began on October 1, and is the longest in U.S. History. Analysts from Westpac stated in a report that "Sentiment improved" after the U.S. Senate approved a bill ending the longest U.S. Government shutdown ever. The House is expected approve the bill within the next few days. S&P 500 futures are trading 0.2% higher following a mixed session on Tuesday for U.S. shares. The Dow Jones Industrial Average rose 1.2%, reaching a record closing while the Nasdaq Composite fell 0.3%. ADP's weekly data on jobs showed that private employers lost an average of 11,250 positions per week over the last four weeks, ending October 25. The Federal Reserve is increasing its bets. Fed funds futures have a 67% implied probability that the U.S. Central Bank will cut rates by 25 basis points at its next meeting, on December 10. This is up from a 62% implied probability a day before. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, closed the last session 0.1% higher, at 99.574. It was trading a little higher after hitting the lowest levels in this month earlier. The U.S. Dollar strengthened by 0.2% to 154.48 against the Japanese yen. The euro fell 0.1% to $1.1575. Taiwanese shares led the gains in Asia with a 1% gain, while Topix in Japan rose 0.6%, hitting a new record high. SoftBank Group, which had announced that it had acquired a majority stake in the company earlier this year, bucked trends with a 6.2% drop. This brings its loss for the month to date up to 21%. The company sold all its stake Nvidia shares on Tuesday. Even after the recent drop, shares of Japan's largest tech sector investor are up more than twice this year. Sean Taylor, Chief Investment Officer at Matthews Asia said: "It is certainly a sign that we have reached or passed peak momentum." He added, "But the fundamentals remain good - AI capital expenditure, U.S. lowering rates, and earnings." "At the moment, the market is torn by short-term positioning due to lack of catalysts following good performance and a fundamentally sound story with growth picking up in 2026." Brent crude fell 0.3% to $64.93 a barrel after reaching its highest level since October 31. The impact of U.S. sanctions against Russian oil, and optimism about a possible end to the shutdown were the main factors. Gold is now 0.5% lower, at $4105.69. Bitcoin is now at $103,321.77, up 0.7%. (Reporting and editing by Gregor Stuart Hunter, Kim Coghill).
Baltimore port: What impact will bridge collapse have on shipping?
A major bridge collapsed in the U.S. port of Baltimore in the early hours of Tuesday after being struck by a container ship, plunging automobiles into the river listed below.
Traffic was suspended at the port until further notification, Maryland transportation authorities said.
PORT INCLUDES
It is the deepest harbor in Maryland's Chesapeake Bay, closer to the Midwest than other East Coast ports, with five public and 12 personal terminals, according to Maryland federal government website.
It is one of the tiniest container ports on the Northeastern coast, managing 265,000 containers in the fourth quarter of in 2015, according to container shipping expert Lars Jensen.
The Port of New York and New Jersey managed around 2 million containers in that same period, and Norfolk Port in Virginia managed 850,000, so the flow of containers to Baltimore can likely be redistributed to larger ports, Jensen stated.
EXISTING STATUS OF FREIGHT SHIPS INSIDE PORT
More than 40 ships stayed within Baltimore port, including small cargo ships, pull boats and enjoyment craft, information from ship tracking and maritime analytics company MarineTraffic programs.
At least 30 other ships had signified their destination was Baltimore, the data showed.
IMPORTS
It is the busiest U.S. port for car deliveries, handling more than 750,000 lorries in 2023, according to data from the Maryland Port Administration.
The port handles imports and exports for significant car manufacturers including Nissan, Toyota, General Motors , Volvo Vehicle, Jaguar Land Rover and Volkswagen, consisting of luxury designs for Audi, Lamborghini and Bentley.
It is also the biggest U.S. port by volume for handling farm and building and construction equipment, as well as agricultural products.
Imports of agricultural products totaled 3 million tonnes last year, including 1.2 countless sugar and salt, along with gypsum, fertilisers and forest products, according to Ishan Bhanu, lead agricultural commodities expert at Kpler.
U.S. sugar company ASR Group, which operates a refinery near the center of Baltimore, stated it does not expect short-term effects to its operations.
Other leading imports were paper/paperboard and plywood/veneer/particle board, the Maryland authority website shows.
EXPORTS
The Curtis Bay Piers coal terminal is around 3 miles from the highway which ran over the bridge.
During the first 9 months of 2023, Baltimore was the second-biggest port for U.S. coal exports, behind Norfolk, Virginia, according to the latest information from the U.S. Energy Details Administration (EIA).
Baltimore exported about 20.3 million short lots of coal, up from 14.3 million short tons during the exact same duration in 2022.
About 13.3 million brief lots of exports from Baltimore throughout the first 9 months of 2023 were steam coal and 7.0 million brief heaps were metallurgical coal
The Baltimore port also exports smaller sized amounts of other metals and minerals.
Other leading export products by weight in 2022 were melted natural gas (LNG), waste-paper, ferrous scrap, and automobiles/light trucks, according to Maryland government information.
Cove Point melted natural gas (LNG) terminal, which is upstream from the bridge, is the nearby LNG terminal.
The terminal's operator, U.S. energy firm Berkshire Hathaway Energy, stated operations were not impacted by the collapse of the bridge, adding it continues to work carefully with the U.S. Coast Guard to ensure that the facility is running safely.
ICIS ship tracking information reveals Cove Point normally exports about 500,000 tonnes of LNG per month.
CRUISE LINER
It is likewise a cruise terminal, with Norwegian, Carnival and Royal Caribbean, all utilizing the port for Caribbean, Canadian, and other Atlantic destinations.
In 2023, cruises carrying more than 444,000 passengers departed from the port, the Maryland federal government website states.
LONDON METAL EXCHANGE WAREHOUSES
In Baltimore warehouses signed up with the London Metal Exchange, there are 756 metric lots of nickel, 150 lots of tin and 50 tons of copper, LME data programs.
BUNKER FUEL
Bunker fuel traders stated deliveries to the port of Baltimore and Annapolis Anchorage are most likely to be impacted from the suspension of traffic and ports in Pennsylvania and Virginia could serve as prospective bunkering options.
This might affect vessel schedules and might cause an boost in bunker fuel costs at the alternative ports, depending upon for how long the port of Baltimore stays unattainable.
(source: Reuters)