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Gold continues to fall as dollar gains and trade tensions ease
The gold price fell on Wednesday for the second consecutive session, mainly due to a stronger dollar, and signs that tensions between the U.S. and China have de-escalated. Meanwhile, attention was focused on a number of economic reports from the U.S. scheduled this week. As of 1017 GMT, spot gold was down by 1.3%, at $3,274.10 per ounce. But bullion is on course to record its fourth consecutive month of gains, with a gain of nearly 5% in April. U.S. Gold Futures fell 1.5% to $3283.50. The market is experiencing high volatility due to the competition between two-way flows. Ross Norman, a independent analyst, said that it appears gold is entering a period of consolidation. The dollar index increased by 0.2% in comparison to its rivals. This makes bullion prices more expensive for holders of other currencies. In a recent note, Frank Watson, a market analyst with Kinesis Money said that gold prices were lower and more stable as the market took in what appeared to a de-escalation in the U.S. led trade war, which has shaken the financial markets over the past few weeks. Gold's unwillingness to fall much further can be interpreted as a sign of the continued volatility in the financial markets amid the uncertainty surrounding U.S. Trade Policies and their impact on the global economy. On Tuesday, U.S. president Donald Trump signed two orders to ease the impact of his auto tariffs. His trade team also announced its first agreement with a trading partner abroad. Bullion, which is a safe haven against financial and political turmoil, reached a record-high price of $3,500.05 an ounce last April 22, as investors sought to escape the global economic turmoil. Investors are likely to focus on a number of economic reports from the United States, such as the personal consumption expenditures (PCE), which will be released later today, and the non-farm employment report, due on Friday. These data could provide more insight into the Federal Reserve’s outlook for interest rates. Silver spot fell 2.1%, to $32.27 per ounce. Platinum dropped 1.1%, to $966.86, and palladium was down 0.6%, to $929.44.
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Copper drops over 2% and heads for the worst month since November
The copper price fell by over 2% Wednesday and is heading for its worst month since November, due to weak data coming from China's top metals consumer as well as lingering uncertainty in trade. London Metal Exchange benchmark copper fell 2.2% at 1045 GMT to $9,231 per metric ton, its lowest price since April 17. Prices dropped 5% in April. Comex copper contracts fell 4.3% to $4.63 a lb, the lowest since April 17. The data released on Wednesday shows that China's manufacturing activity declined at its fastest rate in 16 months, in April. This is a call for more stimulus. John Meyer, analyst at SP Angel, said that macroeconomic uncertainties are currently holding back copper. While Trump's tariffs could create a mini recession in the West we believe that new stimuli in China and Asia will continue keep manufacturers moving and drive growth. The lack of progress made in the de-escalation of the U.S./China trade dispute has weighed on financial markets. China denies any ongoing discussions, despite claims by U.S. officials. U.S. Treasury secretary Scott Bessent stated on Tuesday that it would become apparent to Beijing over time that the Chinese tariffs were not sustainable. The data due on Wednesday will likely show that the U.S. economic growth slowed or even contracted during the first quarter. Dollar-priced materials are now more expensive for those who use other currencies. Another huge drop was in inventories due to the copper price floor. In warehouses monitored the Shanghai Futures Exchange, which fell 23.5% last Friday, to 89.307 tons. This is their lowest level since January 17. The price of the commodity fell 32 %.last week. Copper imports to the U.S. have been diverted due to tariff threats against U.S. imports and tight scrap supply. Meyer said that the shortage of scrap in China was a major problem. A huge copper concentrate deficit caused Chinese smelters reduce their capacity. Aluminium dropped 1%, to $2.442 per ton. Zinc fell 0.5%, to $2.635.5. Lead fell 0.7%, to $1.963.5. Tin rose 0.4%, to $32,015; and nickel increased 0.3%, to $15,595. All metals are headed towards monthly declines. (Reporting and editing by Sahal Muhammad in Bengaluru, Ashitha Shivaprasad from Bengaluru)
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South Korea's SK Innovation claims that refinery margins will improve following a surprise Q1 loss
SK Innovation Co Ltd, the owner of South Korea’s largest oil refiner SK Energy swung into an unexpected operating loss during the first quarter due to lower oil prices. However, the company forecasts a recovery in the refining margins for the second quarter. The company reported an operating loss for the third quarter ended March 31 of 45 billion won (32 million dollars), a sharp drop from the 625 billion won profits it recorded a year earlier. According to LSEG SmartEstimate, analysts had estimated a profit of 393 billion won. "Operating Income declined despite improving earnings from the Battery Business, due to lower international oil prices and refinery margins," SK Innovation stated in a press release. Operating profit for its refining operations decreased from the previous quarter, due to concerns about a global slowdown in the economy, an easing of OPEC+'s production cuts and increased output from Africa and the Middle East. The company expects that refining margins will improve in the second-quarter, backed by increased cooling demand as summer approaches and the beginning of the driving season. Battery subsidiary SK On has recorded a 299 billion won operating loss, down from a 332 billion won loss a year ago. SK Innovation stated that the battery business will see an increase in sales in North America starting in the second quarter and continue to grow throughout the year. The battery production output in the U.S. is also expected to improve significantly this year. SK On's competitor LG Energy Solution earlier said on Wednesday that it expects lower revenue for the second quarter ending in June, partly due to uncertainty caused by U.S. tariff policies. Analysts said that while SK On is expanding its customer base by announcing deals with Nissan, Slate and other suppliers, its performance may be impacted by the recent decision of Kia to reduce its EV target. SK Innovation's revenue for the first quarter of 2014 increased 12.2% on an annual basis to 21.1 trillion Won. The shares of SK Innovation fell 2.5% before the earnings announcement. This was below the benchmark KOSPI which rose 6.6% and has dropped 15.7% for the year.
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EUROPE GAS: Prices rangebound amid geopolitical concerns and warm weather
The Dutch and British wholesale prices of gas traded within a narrow range Wednesday morning due to the warm weather, a soft demand and stable supplies while market participants continued to monitor Russia and Ukraine peace talks. According to LSEG, the benchmark Dutch front-month contracts rose 0.10 euros to 31.90 euro per megawatt hour (10.63/mmBtu) at 0835 GMT. The British day-ahead contracts were up 0.23 pence, at 76.23 p/therm. Meanwhile, the front month contract increased 0.25 pence to 76.50 p/therm. LSEG analyst Yuriy Onyshkiv stated that robust LNG sendouts, stable Norwegian flows and a warmwave this week in Northwest Europe will keep the balance loose. Temperatures in north-west Europe will be above average until the next week, before falling from May 5-9. Auxilione, a consultancy, said that there was no change to the fundamentals. "Eyes will be focused on the developments in two of President Trump's main topics in the next few days: the resolution of the peace deal and his global tariffs," the note read. Auxilione stated that "both of these topics could further disrupt the energy markets." The Kremlin stated on Tuesday that Ukraine has not responded to numerous offers from Russia President Vladimir Putin for direct peace negotiations and that it is unclear whether or not it will join the three-day ceasefire that he announced next month. Putin declared Monday a ceasefire for three days in the Ukraine war from 8-10 May, when Russia will celebrate the 80th Anniversary of the victory over Nazi Germany during World War Two. In response, Ukraine questioned why Moscow wouldn't agree to its request for a 30-day ceasefire that would begin immediately. Gas Infrastructure Europe reports that EU gas storage capacity is now 38.95% filled. The benchmark contract on the European carbon markets increased by 1.20 euros to 66.05 euro per metric ton. (Reporting and editing by Janane Vekatraman; Marwa Rashad)
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London metals fall on weak China factory data
Investors are watching upcoming U.S. data to get clues about the Federal Reserve’s policy direction. China's official purchasing manager's index dropped to 49.0 versus 50.5 in march, according to National Bureau of Statistics, on Wednesday. This is the lowest reading since 2023. It suggests that domestic demand continues to be weak, as factory owners struggled to find other buyers overseas amid the U.S. China trade dispute. As of 0829 GMT on April 1, the benchmark copper price on the London Metal Exchange fell by 2.3%, to $9,227.5 per metric ton, a 4.9% drop from its closing price on March 31, which was $9,710 per ton. Investors await the release of U.S. This week's Personal Consumption Expenditures data is a closely-watched inflation gauge. It could have an impact on Federal Reserve policy or metal prices. U.S. president Donald Trump signed two orders to reduce his auto tariffs. This was in response to Treasury Secretary Bessent who said that key U.S. traders had presented promising proposals for avoiding tariffs. Bessent noted that China’s recent exemptions of certain U.S. goods from retaliatory duties showed a willingness for de-escalation. A trader stated that "the disappointing PMI data clearly shows that trade war tensions have taken a toll in the economy, raising concern about a possible global recession which could reduce metals demand significantly." Other London metals saw aluminium fall 1.2% to $2.435 per ton, while zinc fell 0.9% to 2.62, lead slipped 0.7% to $1.964, tin dropped 0.3% to $31,815, and nickel climbed 0.1% to $15.560. The Shanghai Futures Exchange's most traded copper contract fell 0.5% to $10,627 per ton. Shanghai copper prices were supported a massive fall in inventories In warehouses monitored the SHFE, that dropped by 32% on a weekly basis to 116.753 tons at April 25. SHFE aluminium fell by 0.1%, to 19,910 Chinese yuan per ton. Zinc dropped 0.4%, to 22,400 Yuan. Lead slid 0.6%, to 16,840 Yuan. Nickel lost 0.6%, to 123720 Yuan. Tin fell 0.4%, to 260300 yuan. $1 = 7.2660 Chinese yuan Renminbi (Reporting and editing by Violet Li, Lewis Jackson and Rashmi aich).
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Gold prices record helps keep China's copper-smelters running despite losses
The soaring prices of gold and other byproducts keep China's copper-smelters afloat. They could prevent significant production cuts in this year, despite the fact that a key indicator of profitability is forecast to fall even further. China's copper industry is suffering from a severe slump as a growing number of furnaces compete for limited concentrate supplies. The smelting capacity has increased by a quarter from 2021, and it is expected to increase around 10% this coming year. Six traders and analysts believe that the fees smelters pay for refining ore (called concentrate treatment and refinement charges, TC/RCs) are already negative, and will continue to decline. Negative TC/RCs means that smelters have to pay traders or miners in order to convert concentrate into metal. They said that despite the dire TC/RCs, smelters will not cut production significantly because the high prices of smelting products like gold and sulfur partially offset losses. According to one trader who told him he heard about a TC/RC contract at minus $80.00 per metric ton, or minus 8.02 cents per pound, the record prices for gold offset some of losses in processing concentrate rich with gold. Three sources say that older, smaller smelters, without advanced technology for extracting gold and other byproducts, will struggle because they account for only a small portion of production. These facilities will not be affected by the closures or cuts. According to Shanghai Metals Market, the copper concentrates TC/RC Index hit a new record low on April 18 of -$34.71 a metric ton. This is a minus $3.47 cents if you weigh it. Analysts at Mysteel expect the refined copper output this year to increase by 10%. Benchmark Mineral Intelligence estimates that China has increased its copper smelting capacities by 12.78 million tonnes this year. This is up 8% over last year and by 25% since 2021. Official data shows that China's refined output of copper decreased only 0.5% on an annual basis to 3.35 millions metric tons during the first quarter. Reporting by Violet Li, Lewis Jackson and Saad Sayeed
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Gulf markets ease due to soft oil and weak earnings
On Wednesday, the majority of major Gulf stock markets tracked lower oil prices while weak corporate earnings failed not to boost investor sentiment. The global trade war and mounting supply fears weighed on the oil prices, which are a major catalyst for Gulf financial markets. On Wednesday, the price of crude oil, an important factor in the Gulf, continued to fall and was set to experience its steepest monthly decline in over three years. Saudi Aramco, the oil giant, lost 0.6%. The benchmark index in Saudi Arabia slipped 0.1%. Americana Restaurants International, based in the UAE, retreated by 2.2% following a decline in profit for the first quarter. Abu Dhabi's Index fell 0.3% due to a 3.7% drop in Abu Dhabi Commercial Bank following a decline in operating income in the first quarter. The lender did report an increase in profits. Multiply Group, a laggard among other companies, fell 2.4%. The investment firm was also poised to continue its losses after Tuesday's announcement of a decline in quarterly profits. First Abu Dhabi Bank, the largest lender in the United Arab Emirates, saw its losses capped with a 1.8% increase. LSEG data shows that the bank's share price jumped by more than 3% on Tuesday after it reported a net profit exceeding analysts' expectations of 4,24 billion dirhams. Dubai's main stock index dropped 0.4% due to a 1.5% drop in blue-chip developer Emaar Properties. The Qatari Index gained 0.4%. This was led by an increase of 0.8% in the petrochemical company Industries Qatar. $1 = 3.6729 UAE Dirham (Reporting and editing by Ateeq Sharif in Bengaluru)
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Indian firms are preparing to raise debts of $1.5 billion after RBI liquidity boost.
Indian companies have increased their plans to borrow money from the market, led by the state-run companies. The central bank's new bond purchasing scheme has surprised the markets and driven borrowing costs down. Four Indian state-run companies - Power Finance Corp., NHPC. IREDA. and HUDCO – are set to raise a total of 125 billion Rupees ($1.5billion) and have invited offers on Wednesday and Friday. They didn't immediately respond to an email asking for comment. In the first week of this month, state-run companies raised 393 billion rupees through bonds. Suresh Darak is the founder of Bondbazaar.com, an online trading platform for bonds. He said: "The recent rush of state-run companies issuances looks like a timely move to take advantage of softening yields following Reserve Bank of India’s announcement of bond buying." The RBI announced on Monday night that it will buy bonds worth 1,25 trillion rupees via open market purchases. In April, they bought bonds worth 1,20 trillion rupees. Since then, AAA-rated corporate bonds yields across curves have eased around 5-10 basis point and spreads between government bond yields has shrunk. Darak stated that "by front-loading their borrowings, companies lock in lower funding costs. (It) reflects intelligent liability management." State-run companies have raised 518 billion rupees including these issuances. This is more than five-times the 100 billion rupees they raised in April 2024. In the first five weeks, the companies raised more than half of their total funding. "Issuers are eager to take advantage the falling yields and this is why they are so rushed to issue debt," Umesh Kahandelwal, chief executive officer of Tipsons Group, said. To put things in perspective, the total amount raised by debt fundraises during the first five weeks fiscal 2025 was 450 billion rupees. Non-banking finance firms such as Shriram Finance, Bajaj Finance, and others have been major issuers. PFC, one of the many borrowers to hit the market in the past week, is raising 35 billion rupees via zero-coupon deep discount bonds with a maturity of 10 years and 1 month. The traders are expecting a strong demand for this issue. $1 = 85,141 Indian Rupees
First Quantum has suspended mine arbitration, says Panama President
Panama's president Jose Raul Mulino stated on Thursday that First Quantum Minerals, a Canadian miner, has not yet notified his government that it has suspended arbitration regarding its closed copper mine.
A memo sent by the local Cobre Panama unit last Friday revealed that the company had told its lawyers to begin work on suspending arbitration against Panama. The memo was referring to the cases the company filed following the 2023 government shutdown of the mine due to protests about environmental concerns.
Mulino stated that the government will not be able hold discussions with First Quantum before the suspension of arbitration is finalized. However, he believes the miner has taken the right legal steps.
He told a news conference that he had not been informed of the suspension. "But in good faith I assume it is a process... that takes time," he said.
There will be no formal conversation until we are notified.
Mulino said that he would begin discussions with his team, the mining chamber of Panama and other officials next week about Cobre Panama.
At 1501 GMT, shares of First Quantum were down 0.6%. Reporting by Elida Morland, Daina Beth Solon and Frances Kerry. Editing by Sarah Morland & Frances Kerry.
(source: Reuters)