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Gold drops as Fed cuts fade amid hawkish Fed comments
Gold prices reverted earlier gains on the Friday, as hawkish remarks from U.S. Federal Reserve officials lowered prospects for a rate cut in December. However, they remain set for a week-long gain due to wider economic uncertainty. Gold spot fell 0.6%, to $4145.49 an ounce at 1153 GMT. It had been $4211.06 per ounce earlier in the session. Bullion has risen 3.7% this week. U.S. Gold Futures for December Delivery fell by 1.1%, to $4.149 per ounce. The cautious mood on financial markets is helping to support gold prices. However, there are growing doubts that the Federal Reserve will cut rates in December due to the lack of new economic data, said ActivTrades Analyst Ricardo Evangelista. After a 43-day record shutdown, which disrupted the flow of important economic data, the U.S. Government reopened. White House tempered expectations for clarity about the economy by stating that it may not be possible to get October's unemployment statistics. Evangelista stated that "Gold could also face pressure from the closing of positions to meet margin demands triggered by falls in equity markets." The equity markets fell on Friday following a global selloff caused by Fed hawkish signals. Some Federal Reserve officials, in weighing on expectations of rate cuts, have cited inflation fears and relative labor market stabilization following two rate reductions earlier this year. CME Group's FedWatch tool shows that traders see a probability of 49% for a rate cut by a quarter point in December. This is down from 64% this week. Alex Ebkarian is the COO of Allegiance Gold. He noted, however, that as the shutdown costs become clearer and spending increases, "the inflation plus uncertainty growth regime favors precious metals". Gold that does not yield a return tends to do well in periods of economic instability and low interest rates. The physical gold market in major Asian markets has been subdued as high prices have curtailed purchasing activity. In India, discounts reached their highest level for five months. Silver spot edged down by 0.1%, to $52.26 an ounce, and is on course for a 7.8% weekly gain. Palladium fell 1.7%, to $1402.75, while platinum dropped 2%, to $1548.80. (Reporting and editing by Philippa Feletcher, Harikrishnan Nair; Anmol Choubey from Bengaluru)
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Buy the Rumor and Sell the News with MORNING BID AMERICAS
By Anna Szymanski 14 Nov - Hello Morning Bid readers! Wall Street's decline on Thursday, after a rally earlier in the week, may have been an example of Wall Street "buying rumor and then selling news" as the end of the U.S. shutdown was announced. The major issues that are driving the markets remain the "AI bubble" concerns and the direction of policy easing, even though Nvidia, Intel, and other AI leaders recorded significant losses yesterday. The end of the 43-day longest government shutdown, according to those who counted, had only a small impact on the markets. This is because investors are unlikely to be able to get clarity about the economy, which was one of their biggest concerns. Mike Dolan says that the lack of clarity for Fed chair Jay Powell is bad and could explain why the U.S. Central Bank may pause its rate hikes next month. In Asia, on Wednesday the yen dropped to its lowest level in nine-months, edging up against the critical 155 level. Jamie McGeever says that while government intervention in order to support the yen is not a certainty, investors should remain alert. In Japan, there is a striking similarity between the new prime minister Sanae Takaichi (and U.S. president Donald Trump). Both seem to be aiming to use fiscal stimulus to combat concerns about cost of living - as Jamie McGeever says, this is like trying to put out a fire by dousing it in gasoline. In the meantime, on energy markets, Wednesday, the International Energy Agency published its World Energy Outlook. It introduced a scenario that showed, given current policies, oil consumption will not plateau by 2030, as was previously predicted, but instead will continue to rise until mid-century. Ron Bousso, ROI's energy columnist, examines why the reading is sobering for world leaders who will be meeting in Brazil at COP30. Gavin Maguire, ROI's energy transition columnist, examines what has changed - and not changed - since the historic COP21 Paris accord ten years ago. Chevron released its latest strategy update on Wednesday, which reflected the growing optimism about oil and gas demand. Ron Bousso says that the strategy update dismisses long-term worries about the transition to low-carbon energy, as well as immediate concerns about an upcoming oversupply. Clyde Russell, ROI Asia's commodities columnist, wrote this week about the LNG market bracing itself for an increase in supply. However, it is unclear how low the spot price will need to fall to clear these additional volumes. Andy Home, ROI's metals columnist, notes that the U.S. government has added copper to its list of critical mineral, despite the fact that the U.S. holds the second largest stockpile of copper in the world. Check out what the ROI team recommends you read, watch, and listen to as we enter the weekend. Stay informed and prepared for the coming week. Please contact me via This weekend we are reading... This new, in-depth report from examines the growing trade between Middle East Gulf countries and Asia. It notes that for the first ever time, trade between the Gulf region and China has surpassed the trade of the Middle East Gulf with the West. Energy remains at the core of the relationship but it is also expanding to other sectors, such as electronics and construction. The article by Economic Historian magazine gives a good overview of economic history. It compares current attempts to rollback globalization to previous free trade waves dating back to the 18th and early 19th centuries, and the periodic, and sometimes disastrous, retreats into economic nationalism. This piece questions whether we are at a unique moment or if it is just another cyclical trend. The Center for Public Enterprise's "Bubble or Nothing", a deep dive into the AI boom, examines its funding, energy requirements, 'circular financing', revenues that it could or might not generate, as well as the economic risks associated with a bubble burst. The graphics are simple and excellent. The IEA’s recent report, which stated that fossil fuels would remain in the global energy mix longer than previously predicted, may have caught the attention of many. However this outlook by Ember predicts that clean energy will continue to overtake coal and gas as the world’s primary source of electricity. Listening to... How effective are U.S. Sanctions on Russia's Oil and Gas Industry? Answer: The picture is mixed. Edward Fishman's This is a great show. Sign up for the newsletter to receive Morning Bid every morning in your email. Subscribe to the Morning Bid newsletter Website You can find us on LinkedIn. The opinions expressed are solely those of their authors. These opinions do not represent the views of News. News is bound by the Trust Principles to maintain integrity, independence and neutrality. (By Anna Szymanski.)
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Brazilian protesters barricade the entrance to the COP30 Climate Summit
On Friday morning in Brazil, dozens of indigenous protesters blocked the entrance of the COP30 Summit venue. They staged a sit-in which forced delegates into a side door to resume their climate change negotiations. Security was stepped up during the peaceful protest and long queues of delegates waited to enter the sprawling complex, built on the former site of the old airport of the Amazonian city of Belem. The protesters demand that the Brazilian Government halts all development projects within the Amazon region, including mining, oil drilling, logging and building a new railroad for the transportation of mining and agricultural goods. On Tuesday, dozens Indigenous protesters forced themselves into the COP30 venue. They clashed at the entrance with security guards. Later, they defended their actions by saying that they wanted to show the desperation in their fight for forest conservation. The Brazilian president Luiz inacio Lula da S Silva highlighted Indigenous communities as being key players at this year's COP30.
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The Asian gasoline margin has reached its highest level since August 2023
Profit margins for Asia's gas refining The rally reached its highest level since August 20, 2023, due to unplanned outages at refineries and falling inventories in key trading hubs, despite the typical low-demand season. This quarter, the crack gained nearly 55% to $17.71 a barrel over Brent crude due to refinery outages both planned and unplanned and the strong demand of Indonesia as the region's biggest importer. An increase in margins was caused by a string of refinery shutdowns in the past two months, according to a Singaporean trader. Sinochem, a Chinese oil company, has closed one of its crude units in Quanzhou in Fujian Province in the southeast China after a fire on Thursday. The Energy Information Administration reported on Thursday that the U.S. gasoline stock is at its lowest level since November 2014. It stands at 205.1 millions barrels. The Singapore hub's stockpiles also dropped this week. Priti Mehta is an analyst with Wood Mackenzie. She said that while tight supplies were affecting margins, there was also a risk-premium due to the sanctions against Russia. (Reporting and editing by Joe Bavier, Shailesh Kumar, and Mohi Nrayan)
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Copper prices fall as demand worries rise due to weak Chinese data
Copper and industrial metals fell on Friday, after weak economic data in China's top consumer fueled concerns about demand. Hopes of another Federal Reserve rate reduction this year also faded. The benchmark three-month price of copper at the London Metal Exchange fell 0.6%, to $10,890 a metric ton, as of 1026 GMT. It had fallen as low as $10,000.25 earlier in the day. Metal used in construction, manufacturing and power was still on track for a gain of 1.6% per week, after briefly crossing the $11,000 mark Thursday. On October 29, copper reached its all-time high of $11,200. Analysts at brokerage Sucden Financial wrote in a report that they expect previous highs to act as strong resistances as the markets struggle to find fundamental catalysts powerful enough to sustain an ongoing breakout. "We anticipate a short-term period of consolidation, especially if fundamental conditions do not change." In October, China's factory production and retail sales increased at the slowest pace for over a decade. This put pressure on policymakers who are responsible for revamping this $19 trillion export driven economy. The Shanghai Futures Exchange reported on Friday that copper inventories in warehouses it monitors fell 4.9% compared to a week earlier, reaching 109,407 tonnes. As a result, the chances of an interest rate reduction in December have dimmed. A growing number of Fed policymakers are signaling reluctance to ease further. The entire LME Complex was in the red. Aluminium dropped by 1.4%, to $2,856.50 per ton. Zinc fell by 1.1%, to $3,021. Nickel dropped 0.9%, to $14,845, its lowest level since August 1. Tin fell 0.6% to $ 37,005 while lead dropped 0.4% to $1,069.50. Sucden Financial stated that "apart from tin, zinc and nearby spreads, near-by spreads are still in contango. This suggests availability of deliverable materials and limited tightness at the front end of the curve." Reporting by Tom Daly. Lewis Jackson and Dylan Duan contributed additional reporting. Subhranshu sahu, Mark Potter and Subhranshu sahu edited the article.
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The central bank of Romania has raised its inflation forecasts for 2019 and 2026
The Romanian central bank has raised its inflation forecasts both for this year as well as next, and said that discussions about an interest rate increase will not take place before the summer of next year. Bank of England expects the inflation rate to reach 9.6% in December. This is higher than its previous estimate of 8.8%, due to higher electricity costs and increases to VAT and excise duty earlier this year. Isarescu stated that power prices and tax increases would make up just under five percent of 2025's headline inflation. By 2026, the headline rate will fall from 3.0% to 3.7%. The benchmark interest rate was held at the European Union’s second-highest level of 6.50% by policymakers on Wednesday. They warned that inflation would only return to its target range of 1.5%-3.5% in the first quarter 2027. This is later than expected. Isarescu said to reporters that "talking about a rate cut or a rate reduction is not helpful at this time." "We won't make such a misstep. We'll see what happens with inflation. "We have a lot of uncertainty." He initially said that he thought the interest rate increase would be in the summer or spring of next year. Later, he stated that it was more likely to happen in the summer. The bank held its interest rates through this year, despite the fact that the EU's biggest budget deficit was reduced by tax increases and the rerun of an canceled presidential elections. The deficit-lowering measures helped to avoid a downgrade of the ratings from investment grade, and stabilized debt yields that are now lower than Hungary's. However, they also depressed demand, even though more fiscal corrections needed. Isarescu stated that the economic growth this year could be around 1% and that an imbalance in domestic demand was behind the bank's forecasts for inflation. It was difficult but relatively quick to regain the trust of international markets. "The correction programme must be continued." The correction programme must continue."
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ADNOC's Covestro deal gets conditional European Commission greenlight
The European Commission announced on Friday that ADNOC, the state oil company of Abu Dhabi, has received conditional approval from the EU for its bid of 14.7 billion euros ($17 billion) for German chemicals firm Covestro. The approval was conditional on the full compliance of the commitments made by both parties, which included ADNOC's proposal to adapt its articles of Association and the sharing of Covestro patents in sustainability with other market participants. Last week, people with direct knowledge of this matter said that they expect the deal to be approved. According to an update posted on the Commission's website last Wednesday, the Commission, the EU’s competition enforcer and regulator, restarted their investigation into the deal after stopping the clock September 3 while awaiting requested information. ADNOC offered last month to amend its articles of Association to address EU concerns about its unlimited state guarantees, and pledged to maintain Covestro’s intellectual property throughout Europe. The company then tweaked this element in response to feedback from customers and rivals. ADNOC has acquired Covestro, its largest acquisition to date. It is also one of the biggest foreign takeovers by a Gulf State of a company in the EU. This deal has raised EU concerns about the possibility that state subsidies were used.
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BHP is liable for the 2015 Brazil dam collapse: UK court rules on mammoth suit
The High Court of London ruled that BHP is liable for the collapse in 2015 of a dam located in the southeast region Brazil. This ruling was made in a case which lawyers representing the claimants had previously estimated at up to 48.32 billion pounds (36 billion pounds). BHP was sued by hundreds of thousands of Brazilians as well as dozens of local governments, and about 2,000 companies, over the collapsed Fundao Dam in Mariana (southeastern Brazil), which BHP's joint venture with Vale, Samarco, owned and operated. Brazil's worst ecological disaster released a toxic sludge wave that left 19 dead, thousands homeless, inundated forests, and polluted the entire length of the Doce River. In her ruling, Judge Finola O'Farrell stated that the continued raising of the height of dam even though it was unsafe was "direct and immediate" cause of its collapse. This means BHP is liable according to Brazilian law. BHP announced that it would appeal the ruling and continue the litigation. Brandon Craig, BHP's Minerals Americas President, said in a press release that "240,000 claimants" in the London case had already received compensation in Brazil. He added: "We think this will reduce the value and size of the claims in the UK collective action." ($1 = 0.7451 pound) ($1= 5.4039 reais). (Reporting and editing by Sarah Young, Kate Holton, and Sam Tobin)
Gold drops as Fed cuts fade amid hawkish Fed comments
Gold prices sawsawed Friday, as hawkish remarks from U.S. Federal Reserve officials lowered prospects for a rate cut in December. However, they were still set to make a gain for the week due to wider economic uncertainty.
As of 1044 GMT spot gold was down by 0.1%, at $4,166.91 an ounce. It had earlier reached $4,211.06 per ounce. Bullion has risen 4.2% this week.
U.S. Gold Futures for December Delivery fell 0.6% to $ 4,170.10 an ounce.
The cautious mood on financial markets is helping to support gold prices. However, there are growing doubts that the Federal Reserve will cut rates in December due to the lack of new economic data, said ActivTrades Analyst Ricardo Evangelista.
After a 43-day record shutdown, which disrupted the flow of important economic data, the U.S. Government reopened. White House, on the other hand, has tempered expectations for clarity in regards to the economy by stating that it is possible that October's employment data will not be available.
Evangelista stated that "gold may also face pressure from the closing of positions to meet margin demands triggered by falls in equity markets."
The equity markets fell on Friday following the global selloff caused by Fed hawkish signals.
Some Federal Reserve officials have given their opinions on the rate-cutting expectations by citing inflation concerns and the relative stability of labor markets following two rate reductions earlier in the year.
CME Group's FedWatch tool shows that traders see a probability of 49% for a rate cut by a quarter point in December. This is down from 64% this week.
Alex Ebkarian is the COO of Allegiance Gold. He noted, however, that as the shutdown costs become clearer and spending increases, "the inflation plus uncertainty growth regime favors precious metals".
Gold that does not yield a return tends to do well in periods of economic instability and low interest rates.
The physical gold market in major Asian markets has been subdued as high prices have curtailed purchasing activity. In India, discounts reached their highest level for five months.
Silver spot rose 0.8%, to $52.68 an ounce, and is on course for its best weekly performance since September 2024.
Palladium fell 0.5%, to $1420, and platinum dropped 1.3%, to $1559.70. (Reporting and editing by PhilippaFletcher, Harikrishnan Nair, and Anmol Choubey from Bengaluru)
(source: Reuters)