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Copper reaches 17-month high on optimism about US-China trade deal
Prices of copper rose to a 17-month high on Monday, as signs of reduced trade tensions between China and the U.S. and expectations for stronger demand and growth prompted buyers. The benchmark copper price on the London Metal Exchange rose 0.6% to $11,026 per metric ton by 1120 GMT. It had earlier reached $11,094 per ton, its highest level since May 20, last year. Chinese and U.S. officials worked out the framework for a trade agreement that President Donald Trump and Chinese Leader Xi Jinping will decide on this week. The deal would halt more onerous U.S. duties and Chinese controls over rare earths exports. Metal traders reported that China's industrial profit growth was at its fastest rate in almost two years during September, suggesting that the country is gaining momentum. The weaker dollar against yuan helped to boost sentiment on the metals market. This made commodities priced in dollars cheaper for Chinese consumers. The Yangshan copper premium The price of copper in China has dropped to $38 per ton, down from $58 in late September, and $100 in early May. This indicates that the pace of purchases is still slow. The dollar is under pressure due to expectations that the U.S. Federal Reserve would cut interest rates in the coming week. This could also provide a boost to demand for base metals. The focus elsewhere was on the declining zinc stock in LME approved warehouses At 37,050 tonnes, it is the lowest since March 20,23, and has dropped by more than 80% from the middle of April. StoneX analyst Natalie Scott Gray said that LME zinc stock has been "feeding the real-world demand", due to tight supply globally. Scott-Gray stated that "Units were also drawn to the U.S. due to concerns about the Section 232 investigation (launched by the U.S. in April) which could lead import tariffs for zinc." The premium on the cash zinc contract for the three-month ahead was pushed up by concerns about the supply of zinc on the LME. The record price per ton is $338.74. Last time, it was around $250 per ton. Zinc for three-months was up 1% to $3,054 per ton. Aluminium was up 0.3% at $2,868, while lead was up 0.4% at $2,024. Tin was up 1.2% at $36,225, and nickel was unchanged at $15,360. (Reporting from Pratima Dasai. Dylan Duan contributed additional reporting. Mark Potter (Editor)
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Gold falls on optimism about trade deals, but stocks rise
Investors were encouraged by signs that trade tensions have cooled between the U.S. and China. This marked a positive start to a busy week of central bank meetings, megacap earnings, and other events. On Sunday, top Chinese and U.S. economists hammered out the framework for a trade agreement that U.S. president Donald Trump and his Chinese equivalent Xi Jinping will decide on this week during a meeting in South Korea. Investors are less concerned about the possibility of a break in the trade truce between China and the United States if a deal is reached. The STOXX600 index rose by 0.1%, bringing it to record highs. This was a modest rise, but the stock markets in Asia rallied strongly, and this led European shares to rise. US STOCK FUTURES - JUMP Investors will be looking for confirmation that the current trade truce is still in place and that China’s reform and stimulus signals are translating into a tangible growth momentum, said Charu Chanana. Chief investment strategist at Saxo. The U.S. Stock Futures indicated a strong rally later. Nasdaq futures gained 1.4%, while those for S&P 500 rose 0.9%. George Boubouras of K2 Asset Management said that the market is satisfied with the U.S. China momentum of recent days. "Over the last few months, the markets have been observing global tariff negotiations, understanding that some comments can be a little theatre and noise." The Chinese yuan rose to its highest level in over a month against the dollar of 7,1091. The People's Bank of China announced the official midpoint dollar rate before the market opened at 7.0881, its highest since October 15, 2024. This was above the estimate of 7.1146. Derek Halpenny, MUFG's head of research, said that the yuan could see further gains if a deal were to be made based on the details reported today. He said that investors would be more inclined to look at non-dollar currencies as they have better prospects. Gold, the safe-haven, fell 2% to $4.028 per ounce. Meanwhile, U.S. Treasury yields rose 2.7 basis points, reaching 4.024%. Commodities such as soybeans, corn, and wheat rose due to trade prospects. CENTRAL BANK RESULTS ARE AWAIT This week, investors will be focused on the central bank meetings taking place in Japan, Canada and Europe. Federal Reserve rates are expected to be cut by 25 basis points, after September data showed that U.S. consumer price increases were slightly lower than expected. However, the impact of the government shutdown on data is still a concern. The dollar was steady at 152.71yen and hovered near its two-week high. The euro rose 0.15% to 1.1644. Both the European Central Bank (ECB) and Bank of Japan (BoJ) are expected to keep rates unchanged this week. As concerns about a recession caused by tariffs ease, the BOJ will likely debate whether it is time to resume rate increases. However, political complications could keep this on hold. Focus on Megacap Earnings This week, the U.S. Earnings Season will be at its busiest. Megacaps like Microsoft, Apple and Alphabet are all expected to release their results. The profit advantage of "Magnificent 7" companies, whose shares dominate equity indices due to their huge market capitalisations, is shrinking. However, it's still expected that they will post better results this quarter. Stock market performance has been driven by the enthusiasm of a number of megacap companies in the artificial-intelligence industry.
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China's net gold imports through Hong Kong in September fell by 18% compared to August
Hong Kong Census and Statistics Department figures released on Monday showed that China's net imports of gold via Hong Kong dropped 17.6% from August. Why it's important China is the largest gold buyer in the world. Its buying activities can have a significant impact on global gold markets. Hong Kong's data might not be a complete view of Chinese gold purchases as it is also imported through Shanghai and Beijing. By the Numbers The net imports from Hong Kong into China in September were 22.047 tons, down from 26.746 tons for August. China's total imports of gold via Hong Kong fell by 11.29% to 36.275 tonnes in September from 40.892 tonnes in August. CONTEXT Bullion was in China last week The price of gold fluctuated between $20 discounts and a premium of 8 cents per ounce above the benchmark global spot price. Official data from the People's Bank of China showed that China's central banks added gold to their reserves for the 11th consecutive month in September. Gold spot prices reached a record-high of $4,381.21/oz in October, boosted by bets on U.S. interest rate cuts and geopolitical, economic and political uncertainties. However, they have fallen more than 5% since then. KEY QUOTE Fawad Rasaqzada is a market analyst for City Index and FOREX.com. He said that there was a noticeable slowdown in gold purchases by the People's Bank of China (PBoC) at the end of the third quarter. Razaqzada said that although the pace of purchases slowed down, China still bought a significant amount of gold in Hong Kong. This suggests it is continuing to build up its reserves, even though "high prices are probably what has caused them to reduce their purchases." (Reporting by Ishaan Arora in Bengaluru; Editing by Leroy Leo)
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Angola bids to buy majority stake in De Beers according to source
Angola bid for the majority of Anglo American's De Beers unit, according to a source with knowledge of the matter. This could lead to a standoff between Angola and Botswana, which are both seeking control over the diamond producer. De Beers is one of the leading diamond companies in the world. It operates in Botswana Namibia South Africa and Canada. Bloomberg News reported that the source confirmed that Angola’s state-owned Diamond Company Endiama made the offer. De Beers and Endiama are jointly exploring diamonds in Angola. In August, the company announced that it had discovered Angola's first kimberlite fields in 30 years. Kimberlite, an igneous stone that contains precious stones, is a type of kimberlite. DE BEERS UP for SALE AS DIAMOND PRICES DROP According to a June report, Anglo, which put De Beers up for sale amid falling diamond prices attracted at least six consortiums. Anglo Values De Beers at $4.9 Billion after recording $3.5 Billion in impairments for the last two years. Anglo American, as well as the Angola Mines Ministry, declined to comment. Endiama was not available for immediate comment. Botswana, which owns 15% of De Beers, and which contributes 70% to its annual rough production, considers it a strategic asset, despite a slump in diamond prices that has severely hurt the country's economy. In July, its mining minister stated that the Southern African nation wanted to fully control De Beers. The mines ministry of Botswana could not be reached immediately for comment. Angola stated in September that they were seeking a stake in De Beers, and believed it should be run by a private sector firm. Clara Denina is the reporter; additional reporting by Miguel Gomes, Brian Benza and Wendell Roelf in Cape Town; Writing by Silvia Aloisi and Nelson Banya. Editing by Olivia Kumwenda Mtambo and Kirby Donovan.
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Mali suspends school over fuel crisis and strikes a deal with Russia for petroleum product
Mali will suspend school and university classes for two weeks starting Monday, due to a shortage of fuel, the government announced late Sunday. This follows a blockade by insurgents linked to al-Qaeda. The militants of Jama'at Nusrat al-Islam wal-Muslimin announced a ban on fuel imports into the landlocked West African nation in early September. Since then, they have attacked convoys attempting to reach the capital or enter the country. Analysts describe the fuel blockade by militant groups as part of an effort to pressure the military-led Mali government and cut off its economic oxygen. Some fuel stations have closed in Bamako, the capital. Residents who are unable to fill up their tanks have taken to walking or trying to find motorcycle taxis. The news of the closures of schools followed an announcement made on Friday by Russia, who has been working to strengthen its ties with Mali over the past few years. Russia would be delivering between 160,000-200,000 metric tonnes of agricultural and petroleum products. Alexey Keulika - the head of a Russian delegation that visited Mali a week ago - did not specify what type of petroleum products will be delivered, or when. Keulika said that a board of directors meeting will be held in the next month to discuss a new gold refinery being built by Russia. Mali will delay the start of its academic year in 2024 due to flooding after the rainy season. Reporting by Portia Crowe in Dakar, TiemokoDiallo in Bamako, and FadimataKontaoin Bamako. Editing by Conor Humphries.
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Rare earth miners fall after US-China truce to pause export restrictions and tariffs
Shares of U.S. listed rare earth miners dropped as much as 8% on Monday before the bell, after Washington and Beijing agreed on a framework of a trade agreement that could pause U.S. planned tariffs and Chinese controls on exports of critical minerals. This would ease fears of supply disruptions which had boosted this sector in the past year. The rare earths ceasefire marks a pause on one of the most important fronts in U.S.-China tensions over trade. China processes over 90% of rare earths in the world. It has recently increased export restrictions, adding new elements to their control list as well as tightening oversight of foreign producers who rely on Chinese material. The U.S. has only one rare earth mine, whereas the U.K. is rushing to acquire minerals essential for electric vehicles, defence systems, and advanced manufacturing. Donald Trump, the President of the United States, proposed a 100% tariff on Chinese imports that would take effect November 1, after the latest restrictions. Trump and Chinese president Xi Jinping are expected to review the preliminary agreement later this week, at the Asia-Pacific Economic Cooperation summit (APEC), in Gyeongju. Investors have unwound bets on the U.S. mining industry benefiting from a prolonged trade dispute. Ramaco Resources dropped 5.7% and NioCorp Developments fell 5.4%. MP Materials, USA Rare Earth, and Trilogy Metals all fell by more than 6.5%. The Trump administration also benefited several U.S. miners of rare earths such as MP Materials and Critical Metals. Lithium Americas, USA Rare Earth, and Lithium Americas all gained from the Trump administration's acquisitions and supply-chain agreements to reduce dependence on China. (Reporting and editing by Sriraj Kalluvila in Bengaluru)
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Stocks rise on hopes of trade; Argentina is in focus following Milei's win
Investors also looked at Argentina, where President Javier Milei’s party won the midterm elections with a decisive win. These moves will help emerging markets start the week strong, in anticipation of a possible trade agreement between two of the largest economies on the planet that could remove a major cloud on global growth prospects. The MSCI index that tracks emerging market stocks rose by 1.3%. The currencies index, on the other hand, remained flat and rangebound. Later on, the focus will shift to Latin America where the party of Argentina's President Milei won the midterm legislative elections that were held over the weekend. This victory will give Milei political capital that will allow him to push ahead with reforms which have reduced triple-digit inflation and may also attract foreign capital. "Foreign investments are very low in Argentina. The current administration wants to continue reform. The opportunity in Argentina has never been better," Thea Jamison said, founder of investment firm CHANGE Global. TURKEY JITTERS RESURFACING The main BIST 100 index in Turkey fell 0.1%, after reaching a new three-week high the previous session. The Turkish court has issued a new arrest order on suspicion of "political spying" for Istanbul's imprisoned Mayor Ekrem Imanoglu, marking a further stage in the unprecedented crackdown against President Tayyip Erdogan’s opponents. Investors have been uneasy in recent months due to concerns about a democratic backsliding. The data released Monday shows that the unemployment rate in Canada remained at 8.6% for September. Separately the rand of South Africa strengthened by 0.1% against the US dollar, while the stock market also rose 0.1% following the removal of the country from the Financial Action Task Force "grey list". After its removal from this list, the Nigerian naira is poised to strengthen for the second consecutive day against the US dollar. Oil prices increased after fears were eased that trade tariffs and export restrictions between the U.S., and China, two of the world's largest oil consumers, would dent the global economy. In a recent note, economists from ING stated that they believed the meeting between U.S. president Donald Trump and Chinese president Xi Jinping could lead to a formal agreement as well as a delay in the severe tariffs threatened by both countries in April. Saudi Arabia's benchmark oil price index was up 0.4%. Saudi Aramco shares rose 0.2%. (Reporting and editing by Conor Humphrey in Bengaluru, with Niket Nishant from Bengaluru)
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Gold prices fall as a potential US-China trade agreement dents demand for safe-haven assets
As investors looked for clues on rate cuts, gold prices dropped nearly 2% in the first week of April. As of 0837 GMT, spot gold was down by 1.3% to $4,059.22 an ounce. Prices reached a record-high of $4,381.21 in October, boosted by bets on U.S. interest rate cuts and geopolitical, economic and financial uncertainties. Since then, prices have fallen over 5%. U.S. Gold Futures for December Delivery fell 1.6% to $4 072.40. Asian stocks surged on signs of a detente between China and the United States in trade tensions. This was a positive start to a busy week, which will include central bank meetings as well as megacap earnings. The UBS analyst Giovanni Staunovo stated that a possible trade agreement between the U.S. U.S. president Donald Trump announced that the U.S. will "come away" with a deal between China and the U.S., a day following a meeting of top officials from both countries to discuss a framework on which Trump and Chinese president Xi Jinping would decide during their upcoming summit in South Korea. The Fed is expected Wednesday to reduce rates by a quarter of a percentage point, as a result of a lower-than-expected inflation rate for September. Markets are waiting for any remarks that Jerome Powell, Fed chair, may make at the meeting. Lower real interest rates should still be able to support the demand for gold. Staunovo said that the market consensus was for the Fed's rate to be cut by 25 basis points. "I don't anticipate much movement at the FOMC meeting." In a low interest rate environment, gold that does not yield tends to be more profitable. Silver fell by 1.3% per ounce to $47.36, platinum was down 0.3% at $1,601,75, and palladium rose 0.1% to $1429.61. (Reporting by Ishaan Arora in Bengaluru; Editing by Sumana Nandy and Subhranshu Sahu)
Vale moves closer to deal for Onca Puma nickel mine to resume operations
Vale and the Brazilian state of Para have actually moved more detailed to an agreement that might allow the mining group to resume operations at its Onca Puma nickel mine, according to the minutes of a conference seen by on Tuesday.
Onca Puma, which has an estimated annual small capacity of 27,000 metric loads, had its operating license suspended earlier this year after Para's environment department flagged irregularities in a yearly environmental report.
The state in northern Brazil also mentioned non-compliance on mining mitigation efforts that it said resulted in conflicts with local neighborhoods.
Vale, which has kept since February it did not see indications of environmental or social breaches at the mine, brought the matter to courts and the parties had a conciliation hearing before Brazil's Supreme Court on Monday.
The hearing concluded with both Vale and the state signaling they are willing to discover a method to solve the stalemate, the minutes revealed.
The primary obstacle in the case revolved around Vale's alleged non-compliance with actions to mitigate impacts arising from mining activities.
The state recognized 14 points that it considered to show unacceptable compliance by Vale, which committed to resubmitting an environmental impact report meeting Para's. requirements.
The company also dedicated to employing local employees,. offering scholarships in the region, and assisting to protect. local wildlife, signifying both celebrations were aligned on problems. considered most sensitive, according to the document.
The state's leading district attorney will take the recommendations from. this hearing to the governor for the purpose of evaluating the. resumption of Vale's activities, the minutes said, including a. further conference is expected to take place on June 20.
Vale and Para have actually likewise consented to start a dialogue about the. Sossego copper mine, whose operating license was suspended. previously this year for similar factors. Sossego produced 66,800. metric tons of copper in 2023.
(source: Reuters)