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Gold falls as the dollar strengthens on Fed rate caution
Gold prices fell on Friday as the dollar strengthened on the uncertainty about further Federal Reserve rate reductions, but the bullion is still on track for its third consecutive month gain. As of 0700 GMT, spot gold was down 0.3%, at $4,011.60 an ounce. Bullion is up 4% this month. U.S. Gold Futures for December Delivery rose by 0.1%, to $4.021.20 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that the Fed Chairman's hawkish stance this week did not do gold any favors. The prospect of a December rate cut is now much less certain than previously believed, which has helped boost the dollar and made things more difficult for gold in terms of yield. Dollar index nears its highest level for three months against rival currencies, making gold more expensive to other currency holders. The Fed cut rates on Wednesday by 25 basis points, for the second consecutive time in this year. This brings the overnight benchmark rate down to a range of 3.75% - 4.00%. After Jerome Powell’s comments, traders reduced their bets on another rate reduction at the next policy meeting scheduled for December. According to CME Group’s FedWatch tool, markets now price in a probability of 74.8% for a 25-bp reduction compared with 91.1% a week earlier. Donald Trump, the U.S. president, announced on Thursday that he has agreed to reduce tariffs against China in exchange for Beijing crackingdown on illicit fentanyl, resumed U.S. soya bean purchases, and kept rare earths exports flowing. Gold was discounted in India this week for the first seven-week period, and a drop in prices boosted activity in other Asian hubs. Silver spot was up 0.4% to $49.1, platinum 0.6% to 1,621.60, and palladium 1.2% to $1462.43. (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu, Mrigank Dhaniwala, Harikrishnan nair)
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Swiss National Bank profits shine with gold price surge
The Swiss National Bank announced a profit of 27,93 billion Swiss Francs ($35.22billion) for the third quarter, the central bank reported on Friday. This was boosted by the rising value of the gold reserves. Between June and September the central bank reported a gain in gold valuation of 14.33 billion Swiss francs, compared to the gain of 4.41 billion francs last year. According to UBS calculations, the SNB's average quarterly profit from gold over the past 10 years was less than two billion francs. GOLD GAINS FROM SAFEHAVEN DEMAND Gold prices have increased by 53% in the past year, as investors sought to hedge against political and geopolitical uncertainty. Gold has become more appealing due to the weakening of the U.S. Dollar. Rate cuts by the U.S. Federal Reserve also reduced the yield on other assets that are less risky, such as U.S. Treasuries. The SNB reported that it had also made a profit of 13,63 billion francs during the third quarter from the foreign currency positions it held, as well as the bonds and shares it purchased with the foreign currencies it bought. The central bank increased its profit for the third quarter to 27,93 billion francs from 5,67 million francs a year ago. Florian Germanier, economist at UBS, said: "It is very unusual that the SNB makes so much profit on gold but it reflects the huge price increases gold has seen this year." The profit is simply a side effect from holding an asset that is considered to be the ultimate safe-haven, and which the SNB must hold in order to diversify their holdings and carry out monetary policies.
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China's steel production will fall below 1 billion tonnes in 2025, but the industry imbalance persists
China's steel production will drop below 1 billion tons by 2025. This is on track to meet government pledges to reduce production. However, a mismatch between supply and demand still exists. The world's biggest producer of crude steel has seen its output fall since 2020. However, it was still over 1 billion tons by 2024. Beijing promised in March that it would continue to cut steel production this year, to restructure a sector plagued by excessive capacity. A prolonged downturn on the steel-intensive real estate market has led to a shortage of steel. The steel consumption in 2025 fell by 5.7%, while the crude steel production declined by 2.9%. At a briefing for reporters, Jiang Wei (Vice Chairman of China Iron and Steel Association) said that consumption this year will fall by a fifth consecutive year. China's steel sector will have its best year since the 2022, with many listed companies reporting significant increases in their third-quarter net profits. Steel prices have been halted by a surge in exports, which has partially offset a faltering domestic demand. However, the influx of cheap Chinese steel threatens to trigger broader protectionist reactions worldwide. Steel billet, or lower-value blocks of semi-finished steel, has been exported three times more than in the same period of 2024. This trend, the steel association warned earlier this year, could deter the industry from upgrading and is already increasing the price of steelmaking materials, especially iron ore. Beijing has committed to carbon neutrality in 2060. To achieve this target, the steel industry will need to invest approximately 20 trillion yuan. (Reporting and editing by Christian Schmollinger, Kate Mayberry and Amy Lv)
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Adani Power is the lowest bidder in India's Assam State for a 3.2 GW coal auction
Adani Power, an Indian company, has been selected as the lowest-bidder in a tender for the supply of coal power to the northeastern Assam state. The announcement was made during the post-earnings conference call. Adani Power said that the bid had been approved by the state's electricity commission and it expects to receive formal notification of the award soon. The tender is a part of an overall pipeline of more than 22 GW in thermal power bids from states such as Rajasthan, Uttar Pradesh Gujarat and West Bengal. They are seeking to secure long-term capacity due to rising demand and intermittent renewable production. Adani Power announced in August that it would invest $5 billion into two coal-powered power plants. The company plans to increase capacity from 18 GW to 42 GW by 2032. 8.5 GW of that is already locked in under long-term contracts. Adani Power has said that it will invest approximately 2 trillion rupees over a long period of time in the expansion plan, with the 12 GW expected to be commissioned before the fiscal year 2030. A company executive revealed that the power firm had pre-ordered the boilers, generators, and turbines needed for the expansion. Deliveries will be staggered over the next 38 to 75 months. Separately Adani Power reported that its power dues to Bangladesh had narrowed down to 15 days' supply. This compares to $900 million last May and almost $2 billion at the beginning of this year. Sethuraman N.R., Sonia Cheema (Reporting)
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Japan's Kansai Electric shares rise 5% after forecasting higher profit, dividend
Kansai electric power Co shares rose 5% on Friday in Tokyo, outperforming other markets, after the company's largest nuclear power utility raised its profit forecasts and promised generous returns to shareholders. Kansai, in which U.S. activist investor Elliott became a large minority shareholder last month, lifted its annual profit forecast by 22% to 360 billion yen ($2.4 billion) on Thursday, on higher electricity demand and stronger-than-expected earnings at its fuel trading unit. It also raised its full-year forecast dividend to 75 yen from 60 yen, and promised that the payout ratio would be 25-35% starting in the next fiscal. Kansai shares rose 5.2% to 0512 GMT. This was higher than the Nikkei Index, which had risen 1.9%. Elliott announced its ownership of the stock on September 10. The share price has increased by around 7%. Elliott has been a shareholder in Tokyo Gas since November 19, last year. Shares are 42% higher today. Elliott wants both companies to maximize shareholder value through the sale of non-core assets. This includes their massive real estate portfolios. Sources familiar with the situation said that Elliott had earlier asked Kansai for a 100-yen dividend increase. Tokyo Gas has raised its full-year profit estimate to 194 billion Japanese yen from 131 billion, due to the fact that it expects to earn 30.7 billion yen from property sales. Kansai sees real estate as an essential business that it wants to expand, according to a Kansai executive.
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Japan's Seven & i is looking for M&A and partnership deals to fuel growth
Yoshimichi M. Maruyama, chief financial officer of Japan's Seven & i, said that the company is working on a number of initiatives including potential M&A and partnership deals aimed at achieving substantial growth. 7-Eleven, the Japanese retailer that owns convenience stores in Japan, wants to show investors how it can grow after Canada's Couche-Tard pulled out of a $46 billion bid offer last July. Seven & i said that it would pursue a listing for its North American convenience-store subsidiary in the second half 2026 and buy back shares worth about 2 trillion yen (13 billion dollars) through fiscal year 2020. Maruyama told investors at a recent investor briefing that "we are not planning to sell a large number of shares". He said that the company would still buy back shares even if there was no offering. Seven & i shares have fallen by about a fifth in the last year. TAG EUROPEAN EXPANSION The retailer said that it also aims to make Europe a "fourth main pillar of growth", alongside Japan, North America, and Asia-Pacific. Currently, it has 365 shops in Scandinavia. Ken Wakabayashi is the CEO of 7-Eleven International. He said that Europe, outside Scandinavia, was a blank space for 7-Eleven. The retailer also plans to enter markets with high growth potential in Africa, the Middle East and Latin America.
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Morning Bid Europe- No tricks, but some treats for the markets
Ankur Banerjee gives us a look at what the future holds for European and global markets Investors are unsure about the direction of global monetary policy in the near future, but a trade truce reached between the top two economies in the world has calmed nerves. Meanwhile, a mixed bag mega-cap earnings have kept the market in check. As the week began, there were signs that tensions between China and the U.S. had cooled. The Federal Reserve also delivered an expected rate reduction, but Chairman Jerome Powell warned that this could be the last cut in 2025. This helped to firm up the dollar. It is currently on track for a gain of nearly 2% for the month. The yen was hovering at its lowest level since Feburary, just below 154 dollars, which prompted some verbal scolding from Tokyo officials. As expected, the Bank of Japan kept rates unchanged on Thursday. However, markets interpreted Governor Kazuo ueda's comments as dovish despite his hints that an interest rate increase is still on the table. The Nikkei has benefited from the fall in the yen. It is down almost 4% for October. This was a huge boost to the Nikkei. It has surpassed another record and is now on track for a 16% gain for the month. That would be its best monthly performance since Jan 1994. The "Takaichi" trade in all its glory. The South Korean stock market, Kospi, has been the best performing in the world so far this year. It is expected to rise 20% in October. This will be the largest increase since January 2001. Artificial intelligence has been the focus of much excitement in the stock markets this year. Investors are still trying to get a better picture of the earnings season, which has so far been a mixed one. Amazon shares surged after cloud revenue rose to its highest level in almost three years. This lifted Nasdaq Futures and set up a successful Halloween for tech stocks. As businesses continue to invest in AI software, the online retailer has benefited. Apple is also expected to boost the market after it announced that its holiday quarter forecasts exceeded Wall Street's expectations. The following are key developments that may influence the markets on Friday. Economic events: October inflation figures for the eurozone and France, September retail sales in Germany
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Gold falls as Fed rate caution increases dollar, but is set to rise for 3rd month.
Gold prices fell Friday as the dollar strengthened on fears of further Federal Reserve rate reductions, but bullion is still on course for its third consecutive monthly gain. As of 0459 GMT, spot gold was down 0.4%, at $4,005.54 an ounce. Bullion is up 3.9% this month. U.S. Gold Futures for December Delivery remained at $4,018.10 an ounce. Tim Waterer, Chief Market Analyst at KCM Trade, said that the Fed Chairman's hawkish stance this week did not do gold any favors. The prospect of a December rate cut is now much less certain than previously believed, which has helped boost the dollar and made things more difficult for gold in terms of yield. Dollar index nears its highest level for three months, making gold more expensive to other currency holders. The U.S. Central Bank cut interest rates on Wednesday by a quarter percentage point, for the second consecutive time in this year. This brings the benchmark overnight rate down to a range of target of 3.75%-4.00%. After comments from Chairman Powell, traders have reduced their bets on the Fed cutting rates at its next policy gathering in December. According to CME Group's FedWatch, the markets now price in a probability of 74.8% for a 25 basis-point reduction from the Fed by December compared to a chance of 91.1% a week earlier. Donald Trump, the U.S. president, said that he and Chinese President Xi Jinping had agreed to reduce tariffs against China in exchange for Beijing crackingdown on illicit fentanyl trafficking. He also stated that the U.S. would resume its soybean purchases as well as continue exports of rare earths. Gold was discounted in India this week for the first seven-week period, and a drop in prices boosted activity in other Asian hubs. Silver spot was unchanged at $48.89 an ounce. Platinum was stable at $1,610.75, and palladium rose 1.5% to $1466.42. (Reporting and editing by Subhranshu sahu, Mrigank dhaniwala in Bengaluru)
VW factory danger stress-tests Germany's economic design
Having lost low-cost energy from Russia and facing unpredictability over its oncelucrative trade ties with China, big German organization is now dealing with a crunch point over a 3rd active ingredient in its long time formula for success consensual industrial relations.
Together, Germany's market leaders, trade unions and political leaders for decades looked for and found agreement over production and labour decisions that in turn provided the underpinning for the nation's post-war financial development.
Volkswagen's taboo-breaking threat to shutter German factories for the first time ever is a direct test of whether that agreement model can survive and still provide in a. international environment some see as existentially challenging.
De-industrialisation is happening in Germany, Volkswagen. works council head Daniela Cavallo stated today, demanding. services to make sure there will still be industrial tasks in. Germany in the future.
Manufacturing still represents 27% of total work in. Germany - below 32% from 20 years ago, International Labour. Organisation figures show, however still a far larger share than in. most innovative economies.
About 120,000 of the VW brand's 200,000-strong workforce is. in Germany.
The exact same consensual structures for labour relations that. over the years have purchased commercial peace and supplied job. security will now be put to work in negotiations in between. management and unions due to start next week.
Those talks occur as Volkswagen and other tradition. European cars and truck giants, including Stellantis and Renault, struggle. with high labour and energy costs as well as rising competitors. from lower-cost Asian competitors delivering more cars to the region.
The fact that worker agents have half the votes on. VW's supervisory board make it hard for the group to force. closures. Union leaders want a worked out option but. management say the scale of the difficulties indicates something has. to give.
If we continue like this, we will not be successful in the. improvement, Chief Financial Officer Arno Antlitz informed. workers at the carmaker's Wolfsburg head office.
It is our joint duty to improve the cost. effectiveness of the German websites.
IG Metall has said it could think about moving to a four-day. week as an alternative to closures - a move put in place in the. 1990s for over a decade as part of an earlier cost-cutting drive. that included smaller sized cuts in pay. Volkswagen has actually stayed. tight-lipped on whether this might work in today's environment.
TIME IS TIGHT
A different hair is what function the state need to have.
There is a lack of public investment to help establish. markets, said Olaf Lies, economy minister of Lower Saxony, where. Volkswagen's headquarters and most of the factories affected by. the end of the task security programme are based.
The state is likewise Volkswagen's second-biggest shareholder,. and holds 2 of the 20 seats on its supervisory board.
This is putting numerous companies, and for that reason Germany as a. place to do business, in a really tight spot, Lies told. Reuters.
This has actually not gotten away the notification of Chancellor Olaf Scholz's. coalition in Berlin. Anything to do with commercial production. which disappears will not come back, a source inside the. union told Reuters.
Both Economy Minister Robert Habeck and Finance Minister. Christian Lindner acknowledge Germany faces structural problems. as a service area, however they vary on what to do - even. down to what function electrical vehicles play in Germany's future.
While Habeck - from the ecologist Greens - said political leaders. need to offer state guarantees to support the transition to EVs,. Lindner - a pro-market Free Democrat - this week described the. fixation with EVs as an error and turned down federal government measures. to help the sector.
Scholz's unpopular coalition, whose component celebrations have. simply been damaged by the far-right in east German regional. votes, faces a basic election next year. The Volkswagen relocation. piles pressure on them to lastly set clear policy, some argue.
If such a commercial heavyweight really does need to. tighten its austerity programme and close plants, it is perhaps. an overdue wake-up call that the financial policy procedures taken. up until now need to be substantially increased, stated Carsten. Brzeski, global head of macro at ING.
Volkswagen is not alone. Thyssenkrupp, which for. decades avoided a significant restructuring at its steel department due. to stiff labour opposition, has actually also changed tack.
Its brand-new CEO Miguel Lopez has actually left from the strategy of. predecessors which kept relations with IG Metall steady to. demand a detailed revamp he says has been long overdue.
Similarly, chemical huge BASF CEO Markus Kamieth. said a series of plants have competitive problems. We must. for that reason also consider more plant closures.
In the meantime, however, even those who argue that German. organizations have been far too late to identify patterns in the international. economy and respond rapidly insist it is prematurely to call the. death of Deutschland AG and its industrial heavyweights.
We need forward-thinking ideas, stated Christiane Benner,. chair of IG Metall nationwide. VW has endured hard. scenarios before.
(source: Reuters)