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Gold's record run is paused as dollar firms and investors book profits
The dollar rose on Tuesday and investors took profits. Gold had reached a new high the previous day on the hope of more interest rate reductions from the U.S. Federal Reserve, and on strong demand for safe-haven assets. As of 0634 GMT spot gold was down by 0.7%, at $4,323.69 an ounce. It had reached a record high of $4.381.21 per ounce on Monday. U.S. Gold Futures for December Delivery fell by 0.4%, to $4340.10 an ounce. Gold is now more expensive to other currency holders due to the 0.2% rise in the dollar index. Tim Waterer, KCM Trade's Chief Market Analyst, said that profit-taking and a decline in safe-haven flows have combined to take the edge of the gold price. Any pullbacks will be seen as opportunities for buying gold while the Fed continues on its current rate-cutting path. According to the CME FedWatch Tool, markets are pricing in a quart-point Fed rate reduction this month and another in December. In a low-interest rate environment, gold, which is a nonyielding investment, does well. Waterer stated that the current gold rally still has room to rise, provided U.S. CPI figures released later this week don't reveal any unpleasant surprises. According to economists surveyed by the, the data is scheduled to be released on Friday, after a delay caused by the government shutdown. The index should have risen 3.1% year-over-year in September. On Monday, the U.S. shutdown reached its 20th consecutive day after senators failed to resolve the impasse for the 10th time in a row last week. Kevin Hassett, White House's economic adviser, said that the shutdown would likely end this week. The shutdown has caused key economic data to be delayed, leaving investors and policymakers with a data vacuum ahead of next week's Fed policy meeting. In Malaysia, U.S. Treasury secretary Scott Bessent will meet Chinese Vice Premier He Lifeng this week in an effort to prevent a rise in U.S. tariffs against Chinese goods. Spot silver fell 1.8%, to $51.54 an ounce. Platinum dropped 1.8%, to $1.608.35, and palladium declined 0.9%, to $1.483.14.
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IMF: Global uncertainty is a major factor in the risks of Middle East outlook.
The International Monetary Fund (IMF), which last week raised its growth forecast for 2025 for the Middle East, North Africa, and the Levant, said that the risks in the region remain to the downside despite recent improvements in geopolitical conflicts. The IMF raised its forecast of GDP growth in 2025 for the MENA Region to 3.3% from 2.6%, which it projected in may. The outlook for this year was a resilient one, despite the fact we are living in a time of global uncertainty, where trade tariffs affect most of the world, and geopolitical tensions still exist, according to Jihad Azour. Jihad Azour is the director of IMF's Middle East & Central Asia Department. Oil exporters in the region benefit from increased oil production, as well as public investment and structural reforms implemented as part of efforts to diversify their economies. The lower commodity prices, the rebound in tourism, and increased remittances all contributed to the improvement of growth among oil-importing countries. Improved access to financial markets, and a moderated inflation, also helped. Azour, speaking in Dubai ahead of the IMF Regional Economic Outlook report launch, said: "Of Course, these developments are taking place in an environment where the uncertainty is high and risks are skewed to the downside." There were also increased tensions in the global economy, even though the region was less affected by this than other regions. The geopolitical tensions have improved in the past couple of weeks, but we must remain vigilant. TOURISM AND REMITTANCES BOOSTER EGYPT'S GDP FORECAST The growth rate in Egypt has been revised upwards to 4.3% in 2025 from the 3.8% forecast in May. This is due to an increase in tourism revenues and strong remittances by Egyptians living abroad. The IMF bailout program in March 2024 helped to reduce inflation from nearly 40% in 2023 down to 11.7% in Septembre. Azour stated that "we encourage the authorities" to speed up the implementation of these two milestones: divestment, and increasing the level of transparency in some state-owned companies. He stated that IMF talks with Egypt are ongoing and will be completed in the fourth quarter. Since 2020, the IMF approved $55.7 billion for financing in the region. Of this amount, $21.4 billion has been approved for Egypt, Jordan and Morocco since early 2024. Reporting by Rachna uppal, editing by Kim Coghill
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The Spanish market regulator has approved changes to control voltage fluctuations
The Spanish market regulator said on Monday that it had approved some of technical changes requested by national grid operator, after it detected sharp voltage swings across the country following a massive blackout last April. Initial measures are for 30 days, but they can be extended up to 3 months. The CNMC has approved some technical measures requested from grid operator REE with minor tweaks, but it has postponed a decision on a major proposed measure that would change the power grid voltage requirements for both conventional and renewable power plants. The CNMC stated that the modification of this measure "requires a deeper analysis" after feedback from generators who raised doubts about the ability to meet the new obligations. It said: "Therefore its immediate adoption is inappropriate until the evidence provided during the hearing process by the parties and its implications has been properly analysed." The grid operator requested these measures in early April, warning of "rapid voltage fluctuations" that could "potentially cause demand and/or production disconnections which end up destabilizing the electrical system." In a report published this month, the European network of electricity transmission systems operators stated that the power outage on the Iberian Peninsula that occurred on April 28th was the first blackout known to be caused by excessive voltage. (Reporting from Pietro Lombardi in Madrid and Joan Faus; editing by Matthew Lewis.)
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Andy Home shares five key takeaways for London Metal Exchange Week.
Metals are a hot topic these days. Silver is catching up to gold in terms of record-breaking prices. Rare earths are at the center of the U.S.-China trade dispute, and the industrial metal supply chain is bending under the new global order of tariffs. The London Metal Exchange Week (LME Week) seminars and parties this year were full of interesting topics. The annual metals conference in London last week was a great success. Here are five key takeaways. GREEN PREMIUMS Hong Kong Exchanges and Clearings (HKEx), the owner of LME, surprised LME Week by announcing a new Dubai-based subsidiary. Commodity Pricing and Analysis Ltd. (CPAL), a subsidiary of Hong Kong Exchanges and Clearings, will be the pricing administrator in the roll-out for "green" premiums. CPAL will use the LME's criteria for responsible sourcing and data from the digital platform Metalshub. Metalshub traded more than $220 millions of Class I refined Nickel in 2023. Since March 2024, it has traded 488 tonnes of greenish nickel. Green-ish nickel is defined as metal that has a carbon footprint of less than 20 metric tons for every ton of metal. Metalshub's prices will be used to create a nickel premium that is sustainable, and this template can then be applied to other metals like copper and aluminum. CPAL, assuming that premiums are always available, will "apply structured expertise judgment" if there are not enough trades. It's an interesting venture into the worlds of price reporting agencies like Fastmarkets Media, Argus and S&P Global Platts. The pivot towards Dubai is also significant. HKEx presents it as a means of enhancing the connectivity between China's metal markets and those in the Middle East that are growing rapidly. SMELTERS VERSUS MINERS "You can't be secure if all you have is stuff in the earth." Richard Holtum said that smelting was more important than mining at the LME Seminar. Holtum stated that if the West is to break China's monopoly on exotic metals like gallium and Germanium, they will need to build base metal smelters in order to produce these metals. This argument has been echoed by the Australian government which has committed A$135m ($87.4m) to keep Trafigura's two plants operational. A collapse in the smelting fee for zinc and copper is a major factor. China's aggressive expansion in processing capacity has squeezed profit margins elsewhere. Spot copper treatment conditions are negative and eroding the revenue streams of smelters. Japan, Spain, and South Korea released a rare statement on Wednesday to express deep concern over the current state of affairs in copper raw materials markets. As smelters consider bilateral agreements or tolling contracts, they may no longer be able to maintain the current benchmark pricing system. Everyone loves Doctor Copper Copper was voted the metal with most potential price growth at the LME Seminar. It always does. The bulls in London were in full force this year. The reasons for a higher price of copper include the reallocation of funds to hard assets, the dysfunctional raw material market and the low stock levels resulting from the redistribution to the U.S. Even the self-proclaimed contrarians, such as Ken Hoffman from Traubenbach Associates, admit that in the long-term there is a robust growth of demand and a challenged supply. Wood Mackenzie predicts a 24% increase in global copper demand by 2035. Wood Mackenzie warns that data centers and other disruptive industries could "amplify the demand for copper and increase price volatility beyond expectation." The bull story is reinforced by the sharp increase in producer premiums for deliveries next year to European customers. Codelco, a Chilean producer, will now charge $325 per tonne over LME cash price for shipments in 2026. This is an increase from $234 last year. Aurubis, a German producer, had announced an increase of $315 per tonne. This is a sign that we are in the tariff era. It's a sign of the times. ALUMINIUM: A CHANGE FOR THE BETTER Jorge Vazquez of HARBOR Aluminium, the head of the consultancy, graced the LME Seminar with a maroon sweater number. He surprised the audience by turning bullish about the light metal. Vazquez, who has consistently been bearish on aluminium in past years, now believes that the price will be above $3,000 per tonne, and possibly even $4,000 next year. This is compared to a current rate of $2,765 a tonne. The market has reassessed the dynamics of aluminum supply. Analysts are beginning to question whether the supply will be enough to meet demand for the first decade. GERMANIUM Theo Ruas is the head of global sales for specialty materials at Indium Corp. in the United States. He said that there was no germanium. China's chip-making materials exports have dropped this year, after Beijing tightened the export restrictions by the end of 2020. Project Blue says the price of this material has reached a 25-year high, but Ruas said that some buyers struggle to find it at any price. Gallium may be where germanium is now. Or any other mineral that is dominated by Chinese processing. Rare earths are a major source of friction between the U.S., China and other countries. Beijing recently added five more elements to the list of restricted exports. Most metal traders are unaware of the existence of holmium (also known as erbium), thulium (also called europium), and ytterbium. But they now hold the keys to global markets. These are the opinions of the columnist, an author for.
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Delhi air quality at hazardous levels after Diwali fireworks
According to Swiss company IQAir the air quality in India’s capital New Delhi deteriorated on Tuesday to dangerous levels, with the highest readings in the world. This is partly due to firecrackers used during Diwali, a Hindu festival of light. The Supreme Court of India relaxed its ban on firecrackers last week, allowing the use of "green crackers" in the city for three hours maximum each on Sunday and Monday, though witnesses reported that crackers were set off outside of the allowed times. The crackers emit emissions that are 30 to 50 percent lower than those of conventional fireworks. IQAir read New Delhi at 442, which makes it the most polluted city in the world. The PM2.5 concentration in New Delhi was 59 times higher than the World Health Organisation annual guideline. PM2.5 is particulate matter that has a diameter of 2.5 microns and less. This can cause deadly diseases or cardiac problems. The Central Pollution Control Board of India (CPCB), too, rated the air quality in the city as "very poor", with an AQI measurement of 350. CPCB considers AQI between 0-50 to be good. Delhi's air quality is not expected to improve in the next few days. The earth sciences ministry predicts that the AQI will be between 201-400. Every winter, the dense smog that blankets India's capital, and its surrounding districts, is caused by cold, heavy air which traps dust from construction, vehicle exhaust and smoke from fires in agriculture. This causes respiratory problems for many of India's 20 million residents. To combat the problem, in the past authorities have closed some schools, stopped certain building works and restricted private vehicles. India is not the only nation in South Asia that suffers from toxic air. The government of Pakistan's Punjab Province, which shares its border with India, has launched an "emergency" plan to combat pollution. This includes actions against farm fires, smoke-emitting cars, and the use of antismog guns in areas polluted. IQAir data revealed that the air quality in Lahore (the capital of Punjab) was 234 - the second highest reading in the world. Sajid Bashir is the spokesperson for Punjab Environment Protection Agency. He said that the main issue at the moment is the air pollution coming from Indian Punjab. (Reporting and editing by YPrajesh, Kate Mayberry and Mubasher Bukhari; Additional reporting from Mubasher in Lahore)
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MPOC: Crude palm oil price to remain above $1 042 per tonne in 2026
The Malaysian Palm Oil Council announced on Tuesday that the price of crude palm oil will remain above 4,400 Ringgit ($1,042) a metric ton through 2026. This is due to biodiesel and an uncertain outlook for stocks. Concerns about the effect on Indonesian stocks due to a tightening of supply of soybean oil in Argentina B50 biodiesel mandate In a press release, the Council stated that it would support palm prices. It said that sentiment was still cautious because of the low crude oil prices, large vegetable oil inventories in major markets like China and India and due to the U.S. China trade war. The Council stated that there was an increase in U.S. stocks of soybeans since the harvest started there last month. China had suspended its imports of U.S. beans in May, and now buys primarily from South America. The report stated that "although stronger domestic crushing activities and higher soybean oil usage in the U.S. will be expected under the 45Z policy in 2026 which prioritizes domestically produced feedstocks, these factors are not sufficient to offset the sharp drop in exports to China." The report also stated that the global vegetable oil market in the upcoming season will be heavily dependent on sunflower oil. This is because the exportable supply of soybean oil in the U.S.A. and Brazil, which was 2.7 million tonnes in 2024/25, should drop to 1.6 millions tons in 2025/26 as a result of domestic biofuel demands. The Council stated that soybean oil had traded at a lower price between April and September, but now palm oil is trading at a higher price. The Council reported that by mid-October, palm oil was $42 per ton and $26 higher than soybean oil on the global market.
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Asian stocks soar after trade tensions and credit concerns ease
Asian shares rose Tuesday, as the prospect that trade tensions would ease between the two largest economies in the world boosted risk sentiment. Sanae Takaichi is set to be elected Japan's new prime minister. This will lift the Nikkei, but weigh on the yen. U.S. president Donald Trump said he expected to reach a fair deal with Chinese President Xi Jinping, and downplayed the risks of a conflict over Taiwan. In recent weeks, trade tensions between China and the U.S. have weighed heavily on the markets. Investors are now focused on Trump's meeting with Xi next week on the sidelines an economic conference held in South Korea. Investor sentiment was lifted by the lingering optimism that a solution could be in sight. MSCI's broadest Asia-Pacific share index outside Japan reached a four-and-a-half-year-high and closed the day up by 0.94%. China's stocks were up 0.2%, while Hong Kong’s Hang Seng rose 1% in early trading. Investors snapped up stocks of rare earths, critical minerals and other essential materials after Australia signed a deal to supply the United States. The Nikkei 225 index rose to an all-time high and was close to reaching a milestone 50,000 points, as the so called 'Takaichi trading' did not show any signs of slowing down. Takaichi was confirmed as the next Prime Minister of Japan by a parliamentary vote. INVESTORS BUY DIP Investor sentiment also suffered last week, as a series of bad loans in regional U.S. banks sparked concerns about credit risks which threatened to spill over into the wider markets. Risk assets were also affected by the prolonged U.S. shutdown. Investors have bought the dip this week, shrugging off concerns about trade tensions and focusing instead on the upcoming earnings of several large companies. Chris Weston is the head of research for Pepperstone. He said, "The market has easily overcome the wall of concern, as new capital was injected into risks and fresh air into the market's lung." The market was buoyed by the expectation that the Federal Reserve would cut interest rates at its next two meetings. Kevin Hassett, White House Economic Advisor, also commented on the likelihood of the shutdown ending this week. All three major U.S. indexes closed sharply higher overnight, with chip stocks reaching a new record high. Analysts now expect S&P 500 earnings to grow 9.3% on average year-on-year in the third quarter, a marked improvement from their estimate of 8.8% as of October 1. Mixo Das is Asia Equity and Quant Strategist for J.P. Morgan. "I believe the main driver is the aggressive policy easing we are seeing. The economy is nowhere near a recession and the policy is still being eased very aggressively. TAKAICHI WINS VOTE IN THE LOWER HOUSE TO BECOME JAPAN’S PM Sanae Takaichi, a conservative hardliner, was on track to become Japan's very first female Prime Minister after winning an important vote in the lower house of parliament. Analysts expect Takaichi will be pro-stimulus, and against any further increases in interest rates. This is a negative for the Japanese yen and for bonds, but positive for stocks. Last week, the yen fell by 0.4% to 151.39 dollars per dollar. It also suffered against the euro and sterling. Next week, the Bank of Japan will meet. Traders are pricing in a 20% chance of an increase. However, Governor Kazuo Ueda Has so far kept his options open, by giving few clues about the timing of an interest rate increase. Gold prices fell 0.8% in one day, but they were still close to the record highs that have been seen recently.
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Gold's record-breaking run is halted as investors book profits
The gold price fell on Tuesday as investors took profits following the bullion's recent high, which was fueled by the expectation of more interest rate reductions from the U.S. Federal Reserve. As of 0456 GMT spot gold was down by 0.3%, at $4340.99 an ounce. It had reached a record high of $4381.21 per ounce on Monday. U.S. Gold Futures for December Delivery were unchanged at $4,357.80 an ounce. Tim Waterer, KCM Trade's Chief Market Analyst, said that profit-taking and a decline in safe-haven flows have combined to take the edge of the gold price. Any pullbacks will be seen as opportunities for buying gold while the Fed continues on its current rate-cutting path. According to the CME FedWatch Tool, markets are pricing in a quart-point Fed rate reduction this month and another in December. In a low-interest rate environment, gold, which is a nonyielding investment, does well. Waterer stated that the current gold rally still has room to rise, provided U.S. CPI figures released later this week don't reveal any unpleasant surprises. According to economists surveyed by the, the data is scheduled to be released on Friday, after a delay caused by the government shutdown. The index should have risen 3.1% year-over-year in September. On Monday, the U.S. shutdown reached its 20th consecutive day after senators failed to resolve the impasse for the 10th time in a row last week. Kevin Hassett, White House's economic adviser, said that the shutdown would likely end this week. The shutdown has caused key economic data to be delayed, leaving investors and policymakers with a data vacuum ahead of next week's Fed policy meeting. In Malaysia, U.S. Treasury secretary Scott Bessent will meet Chinese Vice Premier He Lifeng this week in an effort to prevent a rise in U.S. tariffs against Chinese goods. Silver spot fell 1.2% at $51.83 an ounce. Platinum dropped 0.7% to 1,627.53 while palladium rose 0.1% to 1 497.62.
Goldman Sachs warns of possible disruption of supply of rare Earths and key minerals
Goldman Sachs warned of the risks that could be posed to global supply chains for rare earths, other critical minerals and metals, highlighting China's dominance over mining and refining and pointing out challenges to nations wishing to establish independent supply chains.
China increased export restrictions on rare earths, adding five new elements on October 9 and increasing scrutiny for semiconductor users before an expected summit between Donald Trump and Xi Jinping.
CHINA'S SUPPLY CHAIN LEVERAGE
Goldman Sachs reported in a Monday note that China controls 69% global rare earth mining and refining. It also said 98% of magnet production is done by China.
Rare earth elements have become a geopolitical flashpoint, because they are essential to the high-tech industry and used in everything from computer chips to defence equipment.
The bank said that while the rare earths market was worth $6 billion last fiscal year, it is only a fraction of the size of copper, which is 33-times bigger. It also warned that disruptions of 10% to industries dependent on REEs can result in a $150 billion loss in economic output. Inflationary pressures are also exacerbated by shortages.
MINERALS MAY FACE CURBS ON EXPORT
Goldman Sachs identified samarium as a particularly vulnerable metal to export restrictions.
Samarium is used in heat-resistant samarium cobalt magnets that are key to aerospace and defense. The GDP could also be affected by disruptions in the supply of lutetium or terbium, which are widely used.
Since China is the dominant player in mining and refining, light rare earths such as cerium, lanthanum and others are future targets.
Western producers such as Lynas and Solvay, could help ease the shortages. However, China is still a major supplier.
CHALLENGES FOR INDEPENDENT SUPPLY CHAIN
Goldman Sachs identifies a number of barriers to building independent REE and magnetic supply chains. These include geological scarcity, technological complexity, and environmental issues.
The report said that heavy rare earths are particularly scarce outside of China and Myanmar. Most known deposits are small, low-grade or radioactive.
The bank stated that the refining of REEs requires expertise and infrastructure. It takes five years to build a refinery.
The Chinese control over critical inputs like samarium also limits magnet production in other countries, including the U.S.A., Japan and Germany.
INVESTMENT RISKS AND COMMODITY RISE
Goldman Sachs suggests that investors can manage disruption risks by investing in equities. They cite Iluka Resources, Lynas Rare Earths and MP Materials Corp. as the key players.
The bank forecast a deficit in supplies of Neodymium-Praseodymium Oxide (NdPrO), critical for making magnets,
Goldman Sachs has warned that geopolitical tensions could lead to supply disruptions for commodities like cobalt, natural gas, and oil. (Reporting and editing by Clarence Fernandez in Bengaluru, Anmol Choubey)
(source: Reuters)