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Stock indices mostly rise with tech shares, but euro and yen fall on fiscal concerns
The major stock indexes rose on Monday. Technology shares gained after AMD announced a deal to supply AI chips with OpenAI. Meanwhile, the Japanese yen, the euro and the French franc fell against the dollar as the ruling party in Japan elected a new president and the new government in France resigned. Bitcoin was near its all-time high on Monday as investors turned to alternative assets for a safe haven of value, as uncertainty over the U.S. shutdown kept them uncertain. The cryptocurrency last rose 1.61% to $124,755.87. The euro fell 0.2% to $1.1717. Sebastien lecornu, the new French prime minister, resigned Monday just 14 hours after his cabinet was appointed. Sanae Takaichi was chosen by Japan's ruling party as the country's first woman prime minister. The yen declined also after this decision. She supports the "Abenomics", a strategy of aggressive spending and easy money to boost the economy, which was developed by late prime minister Shinzo Abe. Wall Street saw the S&P 500, Nasdaq and Dow rise, while the Dow fell slightly, as the U.S. government shutdown that began last week continued. Last week, the S&P 500 closed at a record high. The market has extended its momentum bias. The market is ignoring the government shutdown in the United States and because of this, it's believed that the Fed will be more generous than what the market had expected. Federal Reserve rates are widely expected to be cut again by 25 basis point at their October 28-29 meeting. This is due to data showing a weakening of the labor market. Cardillo also said that "we are not far from the third-quarter earnings and it looks like it will be another good earning season." Stocks of other chip makers also rose on the back of optimism surrounding artificial intelligence deals. The Dow Jones Industrial Average dropped 76.88, or 0.1%, to 46.681.40. The S&P 500 rose 18.99 points, 0.28% to 6,734.64 while the Nasdaq Composite rose by 113.40, or 0.5%, to 22893.90. The MSCI index of global stocks rose by 2.57 points or 0.26 percent to 995.78. The pan-European STOXX 600 rose by 0.02%. Since Emmanuel Macron was re-elected in 2022, French political instability has increased. No party or group holds a parliamentary majority. Michael Brown, Senior Research Strategist at Pepperstone, said: "The market's biggest concern is what happens next. If Macron decides to name another PM, that will be the sixth Prime Minister in two years." Brown said that any newcomer to parliament would have the same arithmetic problems and challenges when attempting to pass a budget. The Nikkei rose above 48,000. This was the first time that Takaichi had beaten the more moderate Shinjiro. Koizumi, in the Liberal Democratic Party leadership vote. The yields of short-dated Japanese government bonds fell to their lowest level in two weeks as traders reduced bets about when the Bank of Japan would resume raising interest rates. The majority of other major stock markets in the region, such as mainland China, South Korea, and Taiwan, were closed on holidays. Gold reached a new high of over $3,900 an ounce. This was aided by the political and economic uncertainty in the U.S.A., France, and Japan. Spot gold increased 1.83%, to $3.957.25 per ounce. U.S. crude oil rose by 1.3%, to $61.67 per barrel. Brent was up to $65.47 a barrel on the same day. (Kevin Buckland, Tokyo; Lucy Raitano, London; Alison Williams and Nick Zieminski edited the article.)
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Investors fleeing uncertainty as gold blazes to new records at $3,900/oz
On Monday, gold prices soared to new records above $3,900 an ounce, as investors fled economic and political uncertainties and piled into this safe-haven metal. Spot gold has reached a record high of $3,958.57 per ounce, and is up 48% this year compared to last year. Gold is still playing the traditional role of a store value for investors, navigating through everything from changing Fed policy to political developments around the world. Joseph Cavatoni is a senior market strategist with the World Gold Council. In September, the Federal Reserve cut rates for only the first time in this year. The markets are pricing in at least two more reductions this year. The dollar is also weaker as a result of lower interest rates. Gold demand has also been driven by the conflict in the Middle East, Russia-Ukraine and concerns about the Fed's independent. The uncertainty was heightened by the resignation of France's Prime Minister Sebastien lecornu on Monday just hours after he took office. Meanwhile, the U.S. shutdown is now in its sixth day. The central banks' purchases and the increasing inflows of physical gold into exchange-traded fund (ETF)s have also contributed to gold's record high. Michael Haigh is the global head of commodities at Societe Generale. According to the WGC, global gold ETF demand increased to 587.8 tons between January-September, compared with a 6.8 ton outflow for 2024. SILVER'S BULLISH TASK Silver reached its highest price since May 2011 at $48.55 per ounce. The same factors that support gold are also behind the rally of silver, including strong industrial demand, a tight spot-market and a tight supply. Aakash Doshi is the global head of gold strategies at State Street Investment Management. He said that silver was a "catch-up" trade, as it had been outperforming gold in several quarters before mid-2025. Inclusion of the metal on a U.S. draft list critical minerals has led to speculation about potential tariffs and attracted close attention from market. Silver will experience a structural market deficit for the fifth consecutive year, with 117.6 millions troy ounces expected in 2025.
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Gold reaches record high of $3,900/oz due to Fed rate cuts and global uncertainty
Gold reached an all-time record high of $3,900 per troy ounce on Sunday, boosted by expectations that the Federal Reserve will cut rates this month as well as growing economic and political uncertainties in the U.S. As of 13:41 GMT the spot gold price was up 1.4% at $3,941.63 an ounce after reaching a session high of $3.949.34. U.S. Gold Futures for December Delivery rose by 1.5%, to $3.967.70 an ounce. Edward Meir, Marex analyst, says that the current U.S. shutdown, rising Japanese yields in response to inflation fears, and political developments in France are all factors contributing to gold's rise. Sebastien lecornu, the new French Prime Minister, and his cabinet resigned hours after taking up office on Monday. This deepened France's political crisis. After Japan's ruling party appointed fiscal and monetary dove Sanae Tachichi as its leader on Saturday, the yen came under pressure. The U.S. shutdown is now in its sixth day. White House officials are threatening to lay off large numbers of federal workers. The gold price has increased by 50% this year, a record-breaking run, fueled by the expectation of Federal Reserve rate reductions, central bank purchases and a resilient safe haven demand. In March, spot gold prices broke through the $3,000/oz mark for the first and reached $3,800 by late September. Meir said that the fact that we are so close to $4/oz suggests that some funds may be pushing it up in order to reach that mark. Gold that does not yield is a good investment in low interest rate environments and economic uncertainty. Investors now expect a 25 basis-point reduction at the Fed's meeting in this month. An additional 25 bp is expected in December. UBS stated in a report that they expect gold to reach $4200/oz at the end of the year. Spot silver rose 1.4% to reach its highest level since more than 14 year. Palladium rose 2.8% and platinum gained 2.3%, to reach $1,295.75. (Reporting and editing by Sharon Singleton in Bengaluru, Anushree Mokherjee, John Biju)
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Sources: Kirishi refinery in Russia shuts down its largest unit following drone attack
Two industry sources reported on Monday that the Kirishi oil refining plant, one of Russia’s largest, had halted its most productive crude distillation unit (CDU-6), following a drone strike and fire on October 4. The unit’s recovery is expected to take a little over a month. The shutdown could cause a slight decline in oil production, amid a fuel shortage in Russia. It is currently dealing with a lack of popular gasoline types due to the persistent drone attacks by Ukraine on its energy infrastructure. Sources claim that CDU-6 can process 8 million metric tonnes per year or 160,000 barrels a day. This is around 40% of total plant processing capacity. The plant controlled by Surgutneftegaz is also putting its other primary unit back in operation, which was damaged mid-September by drones. Surgutneftegaz didn't immediately respond to a comment request. Sources said that the CDU-6 will operate at 70% capacity due to the participation of other units which will exceed the nameplate capacity. According to sources in the industry, the refinery will process 17.5 million tonnes of oil by 2024. This is 6.6% of Russia’s total refining volume. Last year, the country produced 2 million tonnes of gasoline, 7 million tons diesel, 6 million tons fuel oil, and 600,000 tones of bitumen. (Reporting and Editing by Tomaszjanowski)
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Ukraine claims it has struck a major Russian oil terminal and explosives factory
Ukraine's military announced on Monday that it had hit one of Russia's major factories that produce explosives used in various types of ammunition for the Russian army, as well as a terminal for oil fueling Moscow's warfare effort. As diplomatic efforts to bring an end to the war, which has lasted for more than three-and-a-half years, have failed, Ukraine's military forces have intensified their long-ranged attacks against strategic Russian targets. This includes oil facilities. Ukraine's General Staff issued a statement in which it said that "numerous explosive explosions" had been reported following the strike on the Y. M. Sverdlov bomb factory in western Russia. A fire also broke out after the attack on an oil depot in Feodosia, eastern Crimea. Gleb Nikitine, the regional governor, said that air defence forces had defeated an attack overnight by 20 drones near Dzerzhinsk where the factory was located. He claimed that one person was hurt by falling debris. Nikitin stated that there were some residential fire damages but "no damage has been caused to industrial installations". Some residents in a VK chat room reported hearing loud blasts at night. According to a Ukrainian intelligence officer and the Council of the European Union (which sanctioned the firm in 2023 due to its role in the Ukraine War), Sverdlov Plant was the only significant Russian manufacturer of the high explosives RDX & HMX. Ukraine has targeted Dzerzhinsk before, which is located about 360 km east from Moscow. In addition, the Ukrainian General Staff stated that Ukrainian forces also attacked an ammunition depot located in Crimea. (Reporting and writing by Yuliia Dyesa; editing by Gareth Jones, Huge Lawson and Dan Peleschuk)
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ADNOC: EU approval for Covestro $17 billion deal should be secured by robust remedies
ADNOC, the Abu Dhabi state oil company's international investment arm, has said that it submitted robust remedies to win EU approval for the 14.7 billion-euro (17 billion-dollar) bid for Germany’s Covestro. ADNOC has submitted robust remedies that should win EU approval for its 14.7-billion-euro ($17 billion) bid for Germany's Covestro, the international investment arm of Abu Dhabi state oil giant, said on Monday. The European Commission is currently examining the deal. It is ADNOC’s largest acquisition ever and one of the biggest foreign takeovers by an EU company from a Gulf State. In the case of Covestro, it is the issue of a guarantee from the state and the possibility that foreign aid could be involved. In a press release, a spokesperson from ADNOC’s XRG stated that "we have submitted a robust package of proposed engagements", without giving details on the remedies. "They demonstrate our long-term investment and show the strength of the transaction. We are confident that this will result in a timely clearance." ADNOC offered two remedies, which were proposed changes to the articles of association in order to eliminate EU concerns over the state's unlimited guarantee, and a promise to retain Covestro’s intellectual property throughout Europe. They said that the Commission had no further concerns with Covestro's capital increase of 1.2 billion euros. Separately, on September 3rd, a day following the submission of remedies to the EU watchdog, it paused the investigation. In an email, a spokesperson from the EU executive stated that "the Commission can stop time if it does not receive in a timely manner a material piece information requested by the parties." Once the missing information has been provided by the parties, then the clock will be reset and the deadline for the Commission to make a decision will be adjusted.
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Copper prices fall from 16-month peak as profit-taking takes place
Prices of copper fell on Monday, after reaching 16-month-highs earlier in session. Profit-taking due to a stronger dollar overshadowed concerns about supplies from Chile and Indonesia. Benchmark copper was trading 0.7% lower at $10.636 per metric ton, after reaching its highest level since May 22, at $10.800. Monday's peak was a nearly 25% increase since early April. The traders said that the absence of Chinese markets during Golden Week holidays was a major factor in the rapid rise of copper since last week. Chinese players sold LME Copper many times during this latest rally. Some traders and funds have squared long positions, betting on higher metal prices due to the strengthening of the U.S. dollar, which makes metals priced in dollars more expensive for buyers using other currencies. The supply issue is expected to remain a concern, however, due to the suspension of operations at Freeport McMoRan’s Grasberg mine in Indonesia following a mudslide, and other disruptions in this year including Kamoa Kakula in Democratic Republic of Congo, and Chile’s El Teniente Mine. Goldman Sachs analysts stated in a report that they were bullish on the copper price compared to historical averages. The copper market has a modest surplus at the moment, and we expect it to remain so in 2026 despite a drop in global refined production due to recent mine disruptions. We don't see a deficit until the end decade. The focus was also on lead in LME registered warehouses. Specifically, cancelled warrants or material earmarked for deliver, 0#MPBSTXLOC>, which at 22% means that more than 30,000 tonnes of battery metal could be leaving the LME system. The cancellation of the contract last week has reduced the discount on the cash contract for three months forward . Lead for the three-month period was down by 0.5%, at $2.009 per ton. Other metals saw aluminium gain 0.2%, to $2,715 per ton. Zinc lost 0.5%, to $3,018, while tin fell 2.2%, to $36,625; and nickel fell 0.5%, to $15,350.
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Palm slips due to profit-taking, but production worries cap losses
Malaysian palm futures fell for the second session in a row on Monday. Profit-taking weighed them down, but concerns about a fall in production supported prices. At the close, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for December delivery fell 6 ringgit or 0.14% to 4,436 Ringgit ($1,052.93) per metric ton. It closed Friday at 4,442 Ringgit, a 0.09% decrease. Anilkumar bagani, research head at Mumbai-based Sunvin Group, said that the fall in crude palm oil futures was due to profit-taking, amid market speculation about a possible increase in import duties for vegetable oils by India. Bagani also expressed concern about the lower than expected reduction in Malaysian production of palm oil. According to a survey, Malaysian palm oil production and stocks are expected to fall in September for first time in 7 months. On October 10, the Malaysian palm oil board will release its September supply and demand statistics. The oil price rose by more than 1%, as OPEC+’s planned production rise for November was less than expected. This eased some supply concerns, but a weak outlook for the near term is likely to limit gains. Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger. Chicago Board of Trade Soyoil Prices grew by 0.78%. Dalian Commodity Exchange will be closed on October 1-8 due to public holidays. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils. The dollar has weakened by 0.17%, which makes palm slightly cheaper to buyers who hold foreign currencies. $1 = 4.2130 Ringgit (Reporting and editing by Ashley Tang)
Barrick sells Tongon mine for up to $305 Million
Barrick Mining announced on Monday that it would sell its interest in the Tongon Gold Mine and certain assets in Ivory Coast, to Atlantic Group, for up to $305 million. The Canadian miner is looking to improve its balance sheet.
The shares of Barrick rose by 3% on the Toronto Stock Exchange in morning trading.
Barrick has been pursuing a strategy to monetize assets that are not core in markets where operational costs are increasing. This is a move it made after its merger with Africa's Randgold Resources.
Instead, the company is focusing on high-margin assets with a long-term life, and a growing emphasis on copper, as well as strategic operations in Africa, and the Middle East.
Gold prices are hovering around $3,900 per ounce. This is due to the fact that investors have been seeking safe havens in light of economic uncertainty and further Federal Reserve rate reductions.
Barrick said that the successful exploration has allowed Barrick to extend the life of Tongon beyond its original 2020 deadline.
Barrick said that the deal included a $192 million cash payment, which covered a $23million shareholder loan repayment due within six months after closing. The proceeds will help Barrick improve its balance sheet.
The transaction should be completed by the end of 2025.
(source: Reuters)