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Copper nears record high on weaker Dollar and Supply Outlook
The copper price rose on Tuesday. It was near the'record highs' that were reached in the previous session. A?weaker? dollar and concerns about tighter supplies fueled speculative purchases. By 0957 GMT, the benchmark three-month copper price on London Metal Exchange had risen 0.4% to $11,971 per metric tonne. On Monday, it reached a new record high of $11,996. Copper is on track to achieve its biggest annual gain in 2009 after disruptions to mine supply and the outflow of stocks into the United States. Bets on the fact that copper demand will be boosted by the green energy shift. There is no shortage from the perspective of global supply. According to the International Copper Study Group, the market was in surplus for the first 10 months of this year. Copper has been flooding the United States. The prospect that President Donald Trump will impose an import tariff on copper refined from 2027 is a major factor in the tightening of availability for traditional consumers. Exports of copper refined from China, the world's largest metal consumer, soared in November to reach their second highest monthly level ever. More than a third were bound for the United States. Goldman Sachs predicts that the copper price will average $11,400 in 2026, with tariff uncertainty still lingering. According to the bank's base-case scenario, prices will begin to fall in the second half of 2026 and the early part of 2027 as the U.S. begins to reduce its stockpiles. Nickel, among other LME metals rose 1.7% to $15530 per ton, after reaching its highest level since October 9, on bets Indonesia would reduce its mine production in 2026. Aluminium rose by 0.5%, to $2,957 per ton. Zinc gained 0.9%, to $3,112,50. Lead was up 0.9%, at $1,988, and tin increased 0.7%, to $43,400. (Reporting and editing by David Goodman.)
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What drives the gold market and how investors buy it?
Gold prices hovered just below $4,500 an ounce on Tuesday. This was due to expectations of a looser U.S.monetary policy, and the lingering geopolitical conflicts that have driven gold prices up to record highs. Bullion, the classic safe haven in times of economic and/or political uncertainty, reached a new record high earlier this session, reaching $4,497.55. Yellow metal prices have risen more than 70% this year. This is the biggest annual increase since 1979. The rise has been driven by a combination of safe-haven demands, bets made on U.S. interest rate 'cuts,'?robust Central-Bank buying, dedollarisation trends, and ETF purchases. What are the different ways you can invest in gold? SPOT MARKET Big banks are usually the gold buyers for large investors and large buyers. The spot market is determined by the real-time dynamics of supply and demand. London has the largest influence on the spot gold markets, thanks to the London Bullion Market Association. The association establishes standards for gold trading, provides a framework for over-the counter trade, and facilitates transactions between banks, dealers and institutions. China, India, Middle East, and the United States, are also major gold trading centres. Futures Market Futures exchanges are another way for investors to get exposed to gold. They allow them buy or sell commodities at a set price, on a specific date in the future. COMEX, part of the New York Mercantile Exchange (NYMEX), is the world's largest gold futures exchange in terms of volume of trading. Shanghai Futures Exchange is China's largest commodities exchange and offers gold futures contracts. Tokyo Commodity Exchange (TOCOM) is another major player on the Asian gold market. EXCHANGE TRADED PRODUCTS Exchange-traded product or exchange-traded fund issue securities that are backed by actual metal, allowing people to get exposure to gold without having to take delivery of it themselves. The exchange-traded fund market has become the largest category of investment for precious metals. According to data from the World Gold Council, inflows into gold-backed exchange-traded fund totaled $64 billion year-to-date by October. A record $17.3 billion was added just in September. BARRES AND COINS Metals traders can sell bars and coins to retail consumers in shops or online. Both gold bars and coins can be used to invest in physical gold. DRIVERS: Investor Interest and Market Sentiment The price of bullion has been affected by the rising interest in investment funds over recent years. Speculative gold buying and selling can be fueled by the sentiment generated by news, market trends, or global events. FOREIGN CHANGE RATE Gold is an excellent hedge against the volatility of currency markets. Gold has historically moved opposite to the U.S. Dollar, as a weakening dollar makes gold priced in dollars cheaper for holders other currencies. MONETARY POLICY & POLITICAL TENSE Precious metals are widely regarded as a safe haven in times of uncertainty. Donald Trump's tariffs on Chinese goods and the imposition of extra duties have ignited a global war of trade, shaking currency markets and causing fears of an increase in U.S. prices. Trade war that has rattled financial markets and raised recession fears is intensifying. Trump has increased tariffs for Chinese imports from 84% to 145% while China has increased tariffs for U.S. products from 125% to 84%. Gold's trajectory is also affected by the policy decisions made by global central banks. Gold's opportunity cost is reduced by lower interest rates, since it does not pay interest. CENTRAL BANK GLOBAL GOLD RESERVES Gold is held by central banks as reserves. The demand for central bank reserves has been strong in recent years due to macroeconomic and political uncertainties. The World Gold Council's annual survey, conducted in June, revealed that more central banks intend to increase their gold reserves in the next year, despite the high price of the metal. The World Gold Council reported in late October that global gold demand increased 3% on an annual basis to 1,313 tons in the third quarterly of 2025. This was the highest quarter-total ever recorded, due to a surge in investment demand. China continued to add gold to its precious metal reserves, increasing its holdings from 74.09 millions fine troy-ounces at the close of October to 74.12 at the end November, continuing its buying spree.
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World stocks are awash with festive cheer, but the yen is on watch
The yen rose after Tokyo's sternest warning to date about its willingness to support the battered yen currency. European shares were slightly higher in the early trading, while U.S.?futures remained?little altered on the day. Gold also reached a new record just short of the $4,500-per-ounce threshold. The U.S. economy, which was delayed by the record-breaking government shutdown, was the focus of a week that saw many countries on holiday. The U.S. third quarter growth numbers are expected to show that the U.S. continued to grow with a strong 3,3% clip. This would still be a slight drop from the previous quarter, due to the sharp decline in imports following a surge earlier in the year before the introduction of tariffs. James Rossiter of TD Securities, London's head of global macro-strategies said: "It feels like we can relax a little bit now that the holiday risk premium is down." "On GDP we are looking for upside risks, with a number as high as 3.5%. Consumer demand is growing at a good clip." It should be a day of good news. MSCI’s world stock index rose by 0.2% and is now nearing the record highs reached earlier in the month. MSCI’s broadest index for Asia-Pacific shares outside Japan also increased by 0.4%. Tokyo’s Nikkei closed flat. Nvidia shares rose overnight after a report that stated the company aimed to ship its second most powerful AI chip to China by the Lunar New Year holiday, which is mid-February. Novo Nordisk shares listed in Frankfurt opened Tuesday's early trading nearly 10% higher after the U.S. FDA approved its weight loss pill. This move gives the Danish company an advantage in the race for the market of a powerful oral medication to help people lose weight. It is also a way to gain ground on its rival Eli Lilly. As we near the end of the year, investors are increasing their equity and commodity exposures. This is according to Jose Torres senior economist at Interactive Brokers. For now, traders will take their cues from the general feeling among participants that little is standing in the path of a Santa Claus rally manifesting. China's blue-chip index CSI300 rose by 0.2%. According to the summary of a Tuesday housing policy conference, China will intensify its efforts to stabilize its property market and accelerate urban renewal in 2026. INTERVENTION RISK KEEPS YEN IN CHECK Investors weighed up the chances of an imminent intervention by Japanese authorities to support the currency. Satsuki Katayama, Japan's Finance Minister, said on Tuesday that Tokyo has the right to intervene in currency markets to stop sharp falls in the yen. This is the strongest warning yet about Tokyo's willingness to do so. The yen rose 0.7% to 155.88 against the dollar. The yen also gained against the euro and Swiss franc. The BOJ increased rates on Friday at the end of its December policy meeting. This was widely anticipated and Governor Kazuo ueda gave few hints about the future extent of rate increases. "Their message was so uninspiring... You hike, but you must hike with conviction." "They didn't hike with confidence," said Alicia Garcia Herrero. Chief economist for Asia Pacific, Natixis. The dollar fell against major currencies with the Euro up 0.2% to $1.1782, and Sterling 0.3% higher at $1.3500. Gold and silver spot prices also reached record highs. This was driven by the demand for safe havens due to escalating geopolitical turmoil, following news that the U.S. had pursued another oil tanker from Venezuela. The oil prices remained largely unchanged, with Brent crude futures trading around $62 per barrel and U.S. Crude at $58. (Reporting from Dhara Ranasinghe and Rae Wee, in London; editing by Frances Kerry).
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Vattenfall, a Swedish nuclear company, has applied for state assistance for the construction of new reactors.
Vattenfall, a Swedish utility, has requested state funding to build new nuclear reactors at Ringhals, the company announced on Tuesday. This is the first time a company has done so as part of a program the government hopes will bring about a revival in nuclear energy. Videberg Kraft, the majority-owned subsidiary of state-owned 'Vattenfall', plans to build small modular reactors at its Ringhals nuclear plant in south-west Sweden. In a press release, Desiree Comstedt said that the state's support would be crucial for this project. She is head of Vattenfall's new nuclear energy. The?government stated that the amount and conditions of any financing will be subject to negotiations with?Videbergkraft. The European Commission will have to approve the financing. Sweden's right-of centre government has pledged to revive Sweden's nuclear power sector. The government is aiming to build 10 full-size nuclear reactors by 2045, in addition to the six currently operating. Ulf Kristersson, Prime Minister of Sweden, said on X that "new fossil-free electricity production is crucial for the electrification" of Sweden's industry and transport. The industry and power sector are wary about investing billions in projects that may prove unprofitable, as the costs of renewable energy such as solar and wind continue to drop. The government will share in the risk and cost of building a new capacity of around 5,000MW through a combination?of cheap loans of up to 440 billion crowns (47.76 billion dollars) and price guarantees. Vattenfall has shortlisted Rolls-Royce 'SMR' and GE Vernova (US) as possible suppliers for the reactors. It will choose either three BWRX-300 GE Vernova reactors or five Rolls-Royce GE Vernova BWRX-300 GE Vernova?reactors, totaling 1,500 MW. The government will choose one by the end of next year. However, it has stated that a final decision regarding new nuclear reactors?will not take place until 2029. All of Sweden's reactors today were built between the 1970s-80s. The electricity produced in Sweden is almost completely fossil-free. Hydropower accounts for about 40%, nuclear power 30%, and wind energy 20%.
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Silver joins the rally for new highs as gold extends its record run
Silver continued to rise, reaching a new record, and gold reached a new high. A weaker dollar, coupled with persistent geopolitical uncertainties, boosted the demand for this safe-haven. As of 0857 GMT spot gold was up 1% at $4,488.94 an ounce after reaching a session record $4,497.55. U.S. Gold?futures, for delivery in February, rose by 1.1% to $4.520.10. "Expectations of a dovish Fed; markets losing confidence in the greenback; geopolitical tensions; central bank purchases .... The lust for gold among investors is still massive due to all these factors," said Carlo Alberto De Casa. The U.S. Dollar extended its losses for a second day, and was on track to experience its largest annual decline?since 2017. On the geopolitical side,?U.S. Last week, President Donald Trump ordered a "blockade", which would prevent all sanctioned oil tanks from entering or leaving Venezuela. He also said that he did not rule out war with Venezuela. Markets are pricing in two rate cuts by 2026, as Trump's announcement of a new Federal Reserve Chair?early in the next year confirms expectations for dovish policy. Bullion prices have risen by more than 70% in the past year, as investors sought refuge from global tensions and lower interest rates. Silver spot rose 0.7%, to reach $69.51 an ounce. It had previously reached a record high of $69.98. White metal prices have risen by 142% in the past year due to a combination of supply shortages, industrial demand and investment inflows. Both gold and silver continue to attract strong buying. This behavior suggests that $4.500 and $70 is?being treated as more of a reference point within ongoing trends and less as a hard ceiling. Both metals are therefore firmly supported?for now and the holidays. The spot platinum price rose 3%, to $2,183.90. This is the highest level in 17 years. Palladium also rose 2.8%, to $1,811.20. These gains were accompanied by a rise in gold and silver. (Reporting from Pablo Sinha in Bengaluru and Arunima Kumar; editing by Subhranshu Sahu).
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Japan will test rare-earth mud mined from deep seabed
The government-backed project's head announced on Tuesday that Japan will test mine rare-earth rich mud off Minamitori Island in the deep oceanbed, 1,900 km (1,180 mi) southeast of Tokyo. This will be the first time in history that rare-earth mud has been continuously lifted from a depth around 6,000 metres onto a vessel. Tokyo and its Western allies are seeking stable supplies of vital minerals as China, the world's largest supplier of rare-earth minerals, tightens up export controls. Shoichi Ishii is the program director for the Cabinet Office’s national platform?for innovative ocean development. He told reporters that one of their?missions was to create a supply chain of domestically produced rare Earths in order to guarantee a?stable and reliable supply of minerals vital to industry. As part of its efforts to improve maritime and economic security, the Japanese government has pushed ahead with a major national project. The test in January will be focused on connecting the deep sea mining system, and confirm its ability to lift up to 350 metric tonnes of rare-earth-mud per day. The environmental impact will be monitored onboard the ship and?on the seabed during the entire operation. A production target has not been set. However, if the trial is successful, it will be conducted at full scale in February 2027. Ishii stated that the government-funded project spent around 40 billion yen ($256 millions) since 2018. However, estimated reserves were not disclosed. Ishii said that on June 7, a Chinese 'naval fleet' entered Japanese waters while their research vessel conducted rare earth surveys in Japan's Exclusive Economic Zone (EEZ) surrounding Minamitori Island between May 27 and June 25. He said: "We are deeply disturbed by the intimidatory actions taken against us, even though our activities were limited to surveys of seabed resources within our EEZ."
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Silver reaches new highs on demand for safe havens; gold reaches record levels
As 'investors' flocked to the safety of gold amid the U.S./Venezuela conflict, silver rallied to a new high. Gold spot rose by 0.9%, to $4,486.55 an ounce, at 0753 GMT. It had earlier reached a session record of $4,497.55. U.S. Gold Futures for February Delivery gained 1.1%, reaching $4,519.20. Tim Waterer is the chief market analyst for KCM Trade. He said that U.S.-Venezuela tense relations are keeping gold in investors' minds as a hedge against uncertainty. Gold has surged this past week, as part of a larger positioning shift, with U.S. rates expected to ease even further. Waterer stated that buyers continue to view precious metals as an effective means to diversify their portfolios and maintain value. He added, "I do not think we have reached the high watermark for?gold or?silver." Last week, U.S. president Donald Trump announced a "blockade", which would prevent all oil tankers subject to sanctions from entering or leaving Venezuela. Markets are pricing in two rate reductions for next year, amid expectations of a more dovish stance. Bullion has risen more than 70% this year. This is due to a powerful mix of geopolitical risk, central bank purchases, de-dollarisation and renewed exchange traded fund inflows. As the year ends, the thinner liquidity could intensify price swings, said Frank Walbaum. A market analyst for trading and investment platform Naga, Walbaum noted that gold may remain particularly sensitive to geopolitical headlines as well as changes in rate expectations. Silver spot?advanced by 0.8%, to $69.56 an ounce, after reaching a record high at $69.98. Its year-to date gains have exceeded 141%, outpacing the gold market on account of supply deficits and?industrial demand. Michael Brown, senior strategist at Pepperstone, stated that some consolidation could be possible during the holiday period, as liquidity?thinned. He said, however, that the rally would resume once the volumes return. The $5,000 level is a natural goal for gold in the coming year, and $75 for silver on a long-term basis. The spot platinum price rose 3.1%, to $2,185.05. This is the highest level in over 17 years. Palladium also rose 2.7%, to $1,806.25, a new three-year high, tracking gold and silver. (Reporting from Sherin Elizabeth Varighese in Bengaluru and Arunima Kumar; editing by Rashmi Aich, Subhranshu S.)
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Copper nears record highs due to supply constraints and rate cuts
Prices of copper were largely stable on Tuesday. They remained near the record highs set in the previous session as supply constraints, and bets that the U.S. monetary policy would ease, and China's, boosted?prices. As of 0727 GMT, the most active contract for copper on Shanghai Futures Exchange had closed daytime trading little changed, at 93 740 yuan per metric ton ($13 337.0). On Monday, it reached a new record high of 95,470 yuan. The benchmark copper three-month contract on the London Futures Exchange? grew by 0.2%, to $11,944.0 per ton. Markets are pricing in two rate reductions for next year, amid expectations of a more dovish stance. Supply-side factors were also supportive in China. According to a Chinese market data provider, the country's top copper smelters plan to reduce production by more than 10% in 2026 in order to "counter" overcapacity that has led to an increase in copper concentrate processing costs. Kunal Shah is the head of Nirmal Bang Commodities' research. He said, "The fundamentals of base metals are very positive (as China is likely to introduce another round of interest rates cuts) and also is looking to reduce excess melting capacity for base materials. This is very, extremely bullish." Nickel, among other SHFE base materials, rose 4.4%, to 123.040 yuan per ton. This is a higher price than two months. The London nickel benchmark also rose, rising 1.2% to $16,460 per ton. This is its highest level since October 10. Shah said that "LME copper is expected to reach $13,500/ton in the coming months, while aluminium will likely (reach $3200/t) within the next six-to-nine months. Zinc could also test $3200/t after the next quarter." Aluminium fell by 0.3% in Shanghai. Zinc rose by 0.1%. Lead increased 0.3%. Tin gained 0.5%. Aluminium, zinc, and lead all rose 0.3%. Tin gained 1.2%.
METI predicts a 1.7% drop in crude steel production for Japan between January and March.
The Ministry of Economy, Trade and Industry said that the?weak?demand in the construction and manufacturing sector will cause Japan's crude steel production to?fall 1.7% during the first three months of 2026.
Forecasts show that the third largest steel producer in the world will have a 'annual output' of 80.33 millions metric tons for the fiscal year which ends March 31, down 3.2% compared to a year earlier. This is the lowest production since fiscal 1968 when crude?output rose during Japan's high growth era.
Manabu Naboshima, Director of METI's Metal Industries Division, said at a "news conference" that Japan's 'crude steel' production peaked at 121.51 millions tons in fiscal 2007. Since then, it has fallen to two-thirds.
He said: "We do not make any production predictions for the next fiscal year. However, output in the January-March period is likely to be largely unchanged from current levels.
The ministry, citing a survey of the industry, said that demand for steel products, including those intended for export, will fall by 1.6% in January-March to 18.27 millions tons compared to a year ago.
The ministry has forecast a 0.5% drop in exports. (Reporting and editing by Tomaszjanowski)
(source: Reuters)