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Gold falls to a three-week-low due to US-China trade developments
The price of gold fell to its lowest level in three weeks on Tuesday, as investors shifted their focus to the Federal Reserve interest rate announcement this week. As of 9:31 am EDT (1331 GMT), spot gold was down by 1.2% at $3,932.33 an ounce. It had previously reached its lowest level since the 6th of October. U.S. Gold Futures fell 1.8% per ounce to $3,946.40. Gold, traditionally a hedge in times of uncertainty, and an asset that does not yield, has gained over 51% this past year. This is due to ongoing geopolitical tensions and trade wars as well as the expected U.S. rate cuts. The U.S. and China trade tensions are easing, with a potential trade deal this week following a meeting between Presidents Xi & Trump. This is bad news for safe-haven precious metals, said Jim Wyckoff. Senior analyst at Kitco Metals. This weekend, top Chinese and U.S. officials in the economic field finalized a framework for a possible deal that President Donald Trump will review with Chinese President Xi Jinping at their Thursday meeting. The hopes of an easing in trade tensions has stoked global optimism, and U.S. index futures are hovering at record highs following the rally over the last two sessions. Investors are also awaiting the Fed's policy meeting, which will last two days on Wednesday. It is widely believed that the U.S. Central Bank will cut interest rates by one quarter of a percent. Analysts are divided on the outlook for safe-haven metals. Some see continued highs while others remain cautious. London Bullion Market Association (LBMA)'s annual gathering forecast prices at $4.980 per ounce in the next twelve months. Citi and Capital Economics lowered gold price predictions on Monday. Bank of America stated in a report that the market had become overbought and this was what led to this week’s correction. Gold is now approaching its bearish prediction of $3,800 an ounce for the fourth quarter. After touching its lowest level since September 26, spot silver dropped 0.5% to $46.68 an ounce. Platinum fell 1.1% to 1,575.43, while palladium declined 3% to 1,366.75. Reporting by Anjana Anil in Bengaluru and Pablo Sinha; editing)
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China's ESPO oil is now cheaper due to sanctions against Russia
Four trade sources said that the price of Russia's Asia bound ESPO blend crude at Chinese ports has dropped to a discount compared to Brent for the first time since about a year. This is due to new Western sanctions as well as a lack import quotas from Chinese independent refineries. The price drop highlights the impact of sanctions, which are affecting Moscow's key revenue source from oil. Last week, the United States imposed sanctions against Russia's two largest oil companies, Lukoil, and Rosneft. Both are major exporters of ESPO-grade crude. Chinese state oil companies have responded by suspending purchases of Russian oil shipped via sea, according to reports. Discounts on Cargoes As they rush to create compliant supply chain following the sanctions, some independent Chinese refiners known as "teapots", and historically heavy buyers of ESPO have also paused their purchases. China controls crude imports from independent refiners through a strict system of quotas. Sources said that cargoes of ESPO blend for loading in November were offered with discounts or at parity to ICE Brent. Some deals reached at discounts as low as $0.50 per barrel. Recent bids are now $0.50-$1 per barrel lower than ICE Brent. One source said that the price of ESPO Blend has dropped to a negative level. The cargoes that were scheduled to be loaded in the Far Eastern port Kozmino during the first half November had been sold with a premium of about $1.70 per barrel to ICE Brent, on a delivery-basis to Chinese ports. Traders said that the market has not been active for December-loading ESPO Crude due to a lack of demand and a lingering supply of barrels from November. Aizhu Liu and Siyi Chen in Singapore and Moscow, and David Holmes in the editing)
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Wall St. to open slightly higher, with focus on corporate earnings
Wall Street's major indexes are on track to start slightly higher on Tuesday. This is due to the positive forecasts of companies like UnitedHealth and UPS. Investors also analyzed a private survey on employment for insight into the U.S. economic climate. The third quarter earnings season has begun. AI-related updates will be scrutinized in order to justify high valuations, and large investments. Microsoft, Alphabet (Apple), Amazon, Meta and Amazon are all scheduled to release their results in the coming week. UnitedHealth shares rose by 4.3% in premarket trading after the healthcare giant increased its annual profit outlook - an indication that turnaround efforts are gaining steam. Peers Elevance Health and Centene each gained more than 2 percent. United Parcel Service, a global economic leader, climbed 12.2% following its fourth-quarter revenue forecast that exceeded Wall Street expectations. FedEx, the rival company, added 3.5%. Around 87% of the 143 S&P 500 companies that announced earnings last week have so far surpassed analyst expectations. Robert Pavlik is a senior portfolio manager with Dakota Wealth. He said, "The earnings have come in better than expected, and the guidance has been good too. This helps support the market in the face of the shutdown and tariff talk." At 8:56 am. At 8:56 a.m. ET, Dow E Minis rose by 218 points or 0.46%. S&P 500 E Minis increased by 7.5 points or 0.11%. Nasdaq E Minis gained 43.25 or 0.17%. The U.S. Government has been closed for almost a month. This delays important economic data, and forces traders to rely solely on corporate and private announcements. ADP National Employment Report According to preliminary estimates, the U.S. Economy added 14,250 jobs on average in the four-week period ending October 11. The last official nonfarm payrolls reports was published in early September. Investors are also struggling with reports of layoffs from companies such as Amazon Paramount United Parcel Service Pavlik stated that the lack of data by the United States Government was not good for the economy. Fed officials will discuss interest rates, and the plans to end "quantitative tightening", later that day. Wednesday is the day when the central bank will announce its decision on interest rates. The markets are pricing in the expectation that the U.S. Central Bank will reduce borrowing costs by 50% by year's end. On Tuesday, the Richmond Federal Reserve and Texas Federal Reserve are both expected to release surveys on consumer confidence. PayPal was the top mover, up 11.2%. The payments company announced a partnership OpenAI that would allow ChatGPT customers to checkout instantly. Royal Caribbean Group fell 9.8% following a disappointing profit forecast for the fourth quarter. D.R. Horton's shares fell 5.9% after it reported a lower quarterly profit. Investors believe that Donald Trump, the U.S. president, will sign a long-awaited deal with China on his Asia tour. Trump signed a contract with Japan for the mining and processing of rare earths and critical minerals. Reporting by Johann M Cherian in Bengaluru and Twesha Dkshit; Editing and production by Devika S. Syamnath, Pooja Desai
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Westinghouse, Cameco, and Brookfield to invest $80 billion in US nuclear power drive
Westinghouse Electric will partner with Cameco, Brookfield Asset Management and the US government to build new nuclear reactors worth at least $80 Billion in the United States, they announced on Tuesday. The plan is one of the largest investments in atomic power in recent decades and highlights President Donald Trump's agenda for "energy dominance", which focuses on oil, coal, gas and nuclear. The momentum around nuclear energy has grown. NextEra Energy, Google and other companies struck a deal on Monday to restart a nuclear plant that was idle in Iowa. The shift is largely being driven by surging round-the-clock power demand from the so-called hyperscalers that operate massive cloud-computing infrastructure to manage rising artificial-intelligence processing. The companies stated that as part of this new partnership, the federal government could also force Westinghouse to become public if the participation interest vests, and if the company's valuation reaches $30 billion by January 2029. Cameco Renewable Partners and Brookfield Renewable Partners acquired Westinghouse for $7.9 billion in 2023. This includes debt. Brookfield Business Partners acquired the company in 2018 from Toshiba Corp. for $4.6 billion. The U.S. listed shares of Cameco increased by more than 15 percent in premarket trading. AI BOOM - ALL YOU NEED TO KNOW The agreement is a follow-up to Trump's executive order of May promoting nuclear power and targets an increase of 5 gigawatts in reactor capacity by the year 2030. The advanced nuclear technology of Westinghouse will be used in the new units. Google, Microsoft and Amazon, among others, have already signed deals to use power generated by next-generation nuclear technology, including fusion and small modules reactors. Constellation Energy has partnered with Microsoft to revive an old unit at the Three Mile Island power plant in Pennsylvania. This will be used to power Microsoft data centers.
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Brazil's Bamin attracts interest from three potential investor, according to CEO
Eduardo Ledsham, the CEO of Bamin, a Brazilian iron ore producer controlled by Kazakhstan's Eurasian Resources Group (ERG), told reporters late Monday that three new investors are interested in becoming shareholders. Ledsham, speaking at the Exposibram Mining Conference, said that the parties were considering either a stake in the company or acquiring full control. The firm is currently developing a major project for expansion, requiring an investment of around $6 billion. He added that Bamin, located in the northeastern Bahia state, anticipates the strategic investor joining the company as early as 2026. The company currently operates the Pedra de Ferro iron ore mine with a capacity of 2,000,000 metric tons per year. The company's broader development plans include completing Porto Sul and the FIOL Railway Ledsham refused to identify the investors interested, stating only that they are interested in the integrated minerailwayport project. He said that it is still not clear whether Eurasian Resources Group will sell its entire stake or retain only a part of the company. Vale, the Brazilian mining giant, had revealed previously that it was Studying The potential acquisition of Bamin was discussed, but any move forward would depend on finding a way to develop the project in a financially viable manner despite infrastructure challenges. When asked about this at the Exposibram Conference, Vale CEO Gustavo Pimenta stated that the company continues its analysis of Bamin but did not provide any further details. Ledsham refused to comment on Vale’s interest.
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Bulgaria and Rheinmetall sign 1 billion euro agreement to produce gunpowder
Bulgaria and European defence company Rheinmetall signed a deal on Tuesday worth more than one billion euros ($1.2billion) for the construction of a factory that will produce 155mm artillery and gunpowder. Officials have said that the project is important for Bulgaria, and Europe in general, because the region wants to upgrade its defense capabilities after Russia's invasion into Ukraine. Rheinmetall has been a major beneficiary from the increase in military spending. The project will be a partnership between Rheinmetall, a German company, and Bulgarian VMZ. Rheinmetall will own 51% of the joint venture and VMZ will hold 49%. Bulgaria will finance the stake through a loan from Europe's SAVE Mechanism to boost defense investment. At a ceremony held at the Council of Ministers, in Sofia's capital city, Ivan Getsov and Armin Papperger of Rheinmetall signed the contract. After the signing ceremony, Prime Minister Rosen Zhelyazkov stated that "with the signing of this agreement, we mark the start of a strategic relationship between the Bulgarian government and the German technology concern which will transform the future of Bulgarian defence industry". Papperger stated that the Bulgarian plant would be completed within 14 months and would significantly contribute to Europe and NATO's ammunition needs. Papperger stated that Bulgaria's speed was unprecedented. "With our second gathering, we create one of the most advanced factories in Europe." He was referring a meeting between Rheinmetall, the German steel company, and Boyko Boissov of Bulgaria's centre-right GERB Party in August, where they agreed on this project. The project will create around 1,000 jobs, and restore an important element of Bulgarian defence capability. Gunpowder, artillery shells of 155 mm and the latest modular charging systems will be produced. Rheinmetall has formed alliances with companies such as Italy's Leonardo, and the U.S. firm Lockheed Martin to increase its capacity in Europe.
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Gold drops over 2% at a three-week low amid signs of an easing US-China Trade Woes
Gold dropped more than 2% on Tuesday to a 3-week low, as investors focused their attention on the Federal Reserve's policy meeting. As of 1140 GMT spot gold fell 1.4% to $3,924.99 an ounce, its lowest level since the 6th. U.S. Gold Futures for December Delivery fell 2% to $3.940.20 an ounce. "Hopes that a full-out war between the U.S.... and China will not happen... are driving a rally in risky assets such as shares." Ricardo Evangelista, an ActivTrades analyst, said that the trade war is negatively impacting demand for safe haven assets such as gold. Donald Trump, the U.S. president, said on Monday that he believed a trade deal would be reached between China and the United States. He also announced a series of deals with four Southeast Asian countries on minerals and trade. On Sunday, top Chinese and U.S. economists hammered out the framework for a trade agreement that Trump and his Chinese counterpart Xi Jinping will decide upon when they meet Thursday. On Tuesday, Asian shares continued to consolidate recent gains as the risk appetite remained high amid hopes of a thawing in global trade tensions. Investors are waiting for any comments from Jerome Powell, Chair of the Fed, regarding the future. As gold is not a yielding asset, it benefits from low interest rates. Spot prices rose by 53% in the past year, peaking at $4,381.21 per pound on October 20. This week, they fell 3.2%. Citi analysts reduced their forecast of gold prices for the next three months to $3.800/oz (down from $4,000/oz), while Capital Economics lowered its forecast to $3.500/oz by 2026. The spot price of silver dropped 0.9%, to $46.47 an ounce. Platinum fell 1.6%, to $1565.20, and palladium declined 2.4%, to $1368.48. This is a three-week low. (Reporting from Ishaan Varghese and Sherin Arora in Bengaluru, and editing by Sherry J. Phillips, Subhranshu S. Sahu, and Sonia Cheema.)
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UK actress Prunella scales, 93 years old, died after a long illness.
Her sons released a statement Tuesday confirming that Prunella scales died at the age of 93. She was best known as Sybil Fawlty, the iconic character in "Fawlty Towers", a comedy series. Sybil was married to John Cleese’s Basil Fawlty in the two series of the show made in 1975-1979. It was a comedy set in a dysfunctional Torquay hotel. The popular culture continues to reference and broadcast it. Her two sons released a statement saying that "our darling mother Prunella scales died peacefully yesterday at home in London." She watched Fawlty Towers on the day she died. Scales and actor Timothy West were married for 61 years. He died last November. She was suffering from dementia. Radio Times magazine named Fawlty Towers as the best British TV sitcom ever in 2019. In 2016, it was adapted into a stage production in Australia, and then moved to London’s West End in the year 2024. Sybil's braying laugh was compared by Basil to that of "someone machine gunning a seal" in the show. She has a seven-decade long acting career that includes multiple roles, dating back to the 1950s. One of her most memorable roles was in "Marriage Lines", a 1960s sitcom. She appeared in "Howards End", an Oscar-winning 1992 film, with her son Samuel West. Scales and husband traveled on their narrowboat during the "Great Canal Journeys TV series" in the 2010s. She began her acting career in Bristol at The Old Vic Theatre School after she was born in Surrey. (Reporting and editing by Paul Sandle; Additional reporting by Sam Tabahriti; Sarah Young, additional reporting).
Wall St Futures Pause with Focus on Earnings Rush, Fed Decision
U.S. index futures hovered around record highs Tuesday after rallying the previous two sessions. Investors focused on corporate earnings, including UnitedHealth and UPS.
Amazon has announced that it will reduce its corporate workforce of 14,000 employees. Sources claim Paramount is also planning to begin job cuts.
The third quarter earnings season has begun. AI updates, particularly among major tech companies, are being scrutinized to justify their high valuations and large investments.
Microsoft, Alphabet (Apple), Amazon, and Meta will all report their earnings later this week.
UnitedHealth's shares rose by 2.7% in premarket trading after the healthcare giant increased its profit forecast for the year and reported better than expected quarterly earnings. Peers Elevance Health and Centene each gained more than 1 percent.
United Parcel Service, a global economic bellwether, climbed 9.6% following a forecast of fourth-quarter revenues that exceeded Wall Street expectations. Fedex, the rival company, gained 2.3%.
Around 87% of the 143 S&P 500 companies that reported last week beat analyst expectations.
Artificial intelligence is a major factor in the Wall Street bull market rally, which celebrated its third anniversary this month.
Fed officials will discuss interest rates later today and the plans to end "quantitative tightening", which Jerome Powell hinted earlier. The central bank will announce its decision on Wednesday.
The markets are pricing in the expectation that the U.S. Central Bank will lower borrowing rates by 50 basis points before the end of the year.
John Velis, BNY Mellon’s Americas Macro Strategist said in a report that "the rates view is fully priced into the market which assigns 100% probability of an increase this week."
We expect little in terms of clear guidance for the December meetings and beyond 2026 given the lack of data from the government due to the shutdown and the unlikely likelihood that it will be resolved anytime soon.
At 7:05 a.m. At 07:05 a.m. ET, Dow E Minis were up 53, or 0.1%. S&P 500 E Minis were down 0.75, or only 0.01%. Nasdaq E Minis were up 13,75, or just 0.05%.
The U.S. Government has been closed for almost a month. This delays important economic data, and forces traders to rely solely on corporate and private announcements.
On Tuesday, the Conference Board's Consumer Confidence Report, as well as surveys by Richmond and Texas Federal Reserves are expected to be published.
PayPal shares soared 12.7% among the top movers after the payments company announced a partnership to allow ChatGPT to users to check out immediately.
Royal Caribbean Group's shares fell 7.6% following a disappointing profit forecast for the fourth quarter.
D.R. Horton's quarter-end profit was lower, sending the shares down by 3.4%.
NextEra Energy increased by 2.1% following a nuclear deal reached with Google.
Investors believe that Donald Trump, the U.S. president, will sign a long-awaited deal with China on his Asia tour. Trump signed an agreement with Japan for the mining and processing of rare earths and critical minerals. Reporting by Johann M Cherian in Bengaluru and Twesha Dkshit; Editing and proofreading by Pooja Deai and Devika Syamnath
(source: Reuters)