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Silver sets new record for silver; gold heads to fourth consecutive monthly gain
Silver also hit a new record high. Spot gold rose by 1% on Friday to a 2-week high, amid expectations that the Federal Reserve would cut interest rates in the coming months. By 12:10 pm EST (1710 GMT), spot gold had risen 1.3% to $4210.49 an ounce, its highest price in two weeks. It was also set for a weekly gain of 3.4%. Bullion is on course to record a 5% increase this month and is set for a fourth consecutive monthly rise. Silver reached a new record high of 56.41 dollars per ounce. This is a 5.3% gain for the session, and a 15.2% increase for the month. After an outage that lasted for several hours at CME, trading in the currency platform, as well as futures covering foreign exchange, commodities and Treasuries, resumed around 8:15 a.m. U.S. Gold futures for delivery in February rose by 1%, to $4245.70 an ounce. INVESTORS FOCUSED UPON FED Bart Melek is global head of commodity strategies at TD Securities. He said that some investors are returning to gold because they believe the Federal Reserve will cut rates. Gold does well in environments with low interest rates. Recent dovish comments from Fed Governor Christopher Waller, New York Fed president John Williams and softer economic data after the recent U.S. Government shutdown have increased expectations that the central banks will reduce rates next month. The traders now see 87% of a chance that the rate will be cut in December. This is up from 50% just last week. Jim Wyckoff is a senior analyst with Kitco Metals. He said that "the technical charts of silver have become more bullish over the last week or two, which invites chart-based traders to be on the long side in the silver market." The demand for gold was muted across the major Asian markets during this week as high prices discouraged retail purchases despite India's wedding season. The removal of the tax exemption for gold purchases in China has slowed consumer demand. Platinum rose 3.2%, to $1659.02 and was up 10% on the week. Palladium rose 1.3%, to $1456.68, for a gain of 6%. (Reporting from Pablo Sinha, Bengaluru Editing done by Rod Nickel and Paul Simao.)
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Eskom's South Africa sees its annual profit match last year after a strong first half
Eskom, the South African power utility, said that it expects this year's profits to be similar to those of last year. This is after a good first half-year helped by higher rates and lower financing costs. Eskom's profit was 16 billion rands after taxes last year. This is its first profit for a full year in eight years. The profit came after Eskom drastically reduced the number of recurring blackouts, which have been holding back Africa's largest economy for over a decade. A multi-year bailout by the government and a dramatic turnaround in performance at its coal-fired energy stations have been key factors in its financial recovery. Eskom made a profit of 24.3 billion rand (1.4 billion dollars) in the first six months of the current financial year. This coincided with winter months in the Southern Hemisphere, when Eskom sells a lot more electricity and performs less maintenance on its plants. Eskom stated that the results showed that last year's profits were not an isolated event. The average tariff increased by 12.7%, helping to boost revenue to 191.3 billion rand in the six-month period ending September. Due to lower interest rates, and debt levels, net finance costs dropped by 14% to 15,3 billion rand. The amount of money owed to struggling municipalities has increased from 90.1 billion rand in the previous year to 105 billion. Eskom reported that power cuts only occurred on four days during the six-month period covered in its latest results. When power cuts in 2023 reached record levels, outages occurred on more than 300 of the 365 days. Former state monopoly still dominates the electricity market in the country. It generates most of its power through coal-fired facilities, but also has a small number of smaller plants that use diesel or water to produce energy.
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Silver sets new record for silver; gold heads to fourth monthly gain
Gold spot rose 1% on Friday to a new two-week-high, amid expectations that the Federal Reserve would lower interest rates in the coming months. Silver also hit a record high. By 10:09 am, spot gold had risen 0.9% to $4.192.78 an ounce. ET (1510 GMT), was at its highest level since November 14. It was also on track for a weekly gain of 2.9%. Bullion is set to rise 4.6% this month and will be on course for its fourth straight monthly gain. Silver reached a new record high of $55.33 an ounce. This is a 3.5% increase for the session, and 12% for the entire month. After an outage that lasted for several hours, trading in the currency platform, as well as futures covering foreign exchange, Treasuries, and stocks, resumed at around 1330 GMT. U.S. Gold Futures for February Delivery rose by 0.61%, to $4,227.60 an ounce. FED RATE IN FOCUS Bart Melek is the head of commodity strategy at TD Securities. He said that some investors are returning to gold because they expect a continued slowdown in the economy. Gold does well when interest rates are low. Recent dovish comments from Fed Governor Christopher Waller, New York Fed president John Williams and softer U.S. data after the government shutdown have increased expectations that the central banks will reduce interest rates next month. The traders now see 89% of the chance that a rate reduction will occur in December. This is up from 50% just last week. Jim Wyckoff is a senior analyst with Kitco Metals. He said that "the technical charts of silver have become more bullish over the last week or two, which invites chart-based traders to be on the long side in the silver market." The demand for gold was muted across the major Asian markets during this week as high prices curbed consumer buying, even as India began its wedding season. The removal of the tax exemption for gold purchases in China has slowed consumer demand. Palladium rose 5.6%, to $1.519.37, and is set to gain 10.7% on a weekly basis. Platinum was up 2.9% at $1,655.14, a 9.7% increase for the week. (Reporting and editing by Rod Nickel in Bengaluru)
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Investors were rattled by exchange outages before CME's collapse
CME Group, one of the largest exchange operators in the world, suffered an outage lasting several hours on Friday. This affected trading on its currency platform, as well as futures including foreign exchange, commodities and Treasuries, and stocks. Market participants reported that the outage began early in Asia and ended mostly by morning U.S. trade. It was one of longest in recent years. Since the early 1980s, exchange outages caused by bugs in software, hardware failures and cyberattacks have caused disruptions to markets and undermined investor confidence. Check out some of the major outages that have occurred: A power outage on August 14, 2024, caused the Moscow Exchange to stop trading for over an hour. The Swiss SIX Stock Exchange experienced its worst outage in recent history on July 31st, 2024. A technical glitch caused the trading to be halted twice for several hours across stocks, bonds and mutual funds. Data and services of LSEG Group were unavailable on July 19, 2024, causing some disruptions in the financial markets. On that same day, a broader tech failure also caused a global uproar. On June 3, 2024, a glitch at the New York Stock Exchange caused massive swings of shares in Berkshire Hathaway (Berkshire Hathaway) and Barrick. Trading halted in dozens of companies. London Stock Exchange reports an incident on October 19, 2023, which forced them to stop trading in smaller UK shares. However, blue-chip stocks were not affected. Refinitiv's news and data platform Eikon, which is operated by the London Stock Exchange Refinitiv, experienced a prolonged outage on August 2, 2021. This was its third such incident that year. * Euronext, the pan-European financial market operator, experienced technical glitches that knocked index derivatives trading out for almost four hours on June 17, 2021. The Australian stock exchange had to stop trading for 20 minutes due to a software issue on November 15, 2020. ASX, the operator of the bourse, re-opened trading one day later. Qontigo, the index operator, informed its clients that Europe's STOXX key indexes would open more than an hour later on November 2, 2020 due to an "input data problem". A hardware failure brought the Tokyo Stock Exchange to a halt on October 1, 2020, the worst outage ever for the third largest equity market in the world. New Zealand stock exchange resumes trading on August 28, 2020, after four days of disruptions due to cyberattacks. In July 2020, a software glitch caused the trading to be temporarily halted on Germany's electronic trade platform Xetra. This was the second time that the system had been down since April. May 8, 2020: A software error caused the Moscow Exchange to suspend stock trading for 42-minutes. TMX Group (Canada's largest stock exchange operator) experienced its second outage within two years when a hardware problem caused order entry problems, resulting in a shutdown of trading for almost two hours across three local bourses. Nasdaq Inc.'s Nordic stock market and Baltic stock market were shut down twice by technical issues in one day, due to connectivity problems. Hong Kong Exchanges and Clearing has suspended trading in derivatives for the afternoon on September 5, 2019. This is due to a bug that caused connectivity issues with the Hong Kong Futures Automatic Trading System. August 16, 2019: The longest trading outage in the history of the London Stock Exchange was caused by a software problem that delayed the start for nearly two hours. A technical problem with trade reporting caused the New York Stock Exchange of Intercontinental Exchange to suspend trading for a portion of April 25, 2018. This affected five stocks including Alphabet and Amazon. Singapore Exchange has suspended trading in securities for the second half of the day because duplicate confirmation messages were generated. A technical problem caused the NYSE to suspend trading on July 8, 2015. March 31, 2015: ICE’s NYSE Arca suffered a technical problem that caused some of the most popular Exchange-Traded Funds to be temporarily unavailable for trading. Some investors paid more for their stocks than they would have otherwise. A software bug caused connectivity problems to a data feed for the industry. May 18, 2012: Facebook’s $16 billion initial publicly offered on the Nasdaq market was marred with technical glitches, which resulted in an opening that was delayed and left many traders in the dark about the trades that had been completed for several hours. This led to significant losses at a number of firms. Bats Global Markets was forced to cancel their IPO after a series glitches due to a software bug. May 6, 2010: Uncertain market conditions coupled with an aggressive, massive sell order of a popular futures product triggered a “flash crash” that sent the Dow Jones Industrial Average plummeting over 1,000 points and temporarily wiping out almost $1 trillion worth of market value. On August 2, 1994, a squirrel chewed a power cable in Trumbull (Connecticut), where Nasdaq's servers were located. The backup power system of the exchange failed to kick in and caused a half-hour outage. On December 9, 1987, a squirrel had chewed through the power cable of Turnbull. This set off a series of events which shut down Nasdaq trading for almost an hour and half. * LSEG pays news.
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China's BYD recalls 89,000 plug-in hybrids due to battery safety hazards
BYD is recalling 88,981 hybrid plug-ins due to a possible battery safety issue, China's regulator of the market said in an announcement on Friday. This comes weeks after BYD's biggest recall. The Qin PLUS DM i models that were affected were manufactured between January 2021 to September 2023. "There may be limited power output because of problems with consistency during production", said the notice. The market regulator stated that in extreme cases they would not be able drive in pure-electric mode. It added that the recall was the result of an investigation into a defect it initiated. BYD has recalled over 210,000 vehicles in the past year. This includes nearly 7,000 plug-in hybrid SUVs. BYD announced in mid-October its largest recall to date of over 115,000 Tang and Yuan Pro cars produced between 2015 and 2020 due to design defects, battery safety risks and other issues. BYD sales in October dropped by 12% compared to the same period a year ago, following a 33% decline in profit for the third quarter. BYD recalled 97,000 Dolphin and Yuan Plus electric vehicles in September 2024 due to a defect involving the steering control unit, which could have caused a fire. (Reporting and editing by Beijing Newsroom; Joe Bavier, Alexander Smith).
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Stocks finish November with a strong performance, boosted by Fed's cut in bets. Trading outage affects futures.
The global stock market entered a volatile final session on Friday as an outage in the exchange operator CME Group disrupted trading of a wide range of futures contracts on currencies, commodities and Treasuries, further reducing liquidity. CME's datacentres were down when U.S. investors returned from Thanksgiving for a short session on Friday. CME's EBS platform had resumed some currency trading by 1305 GMT. The STOXX 600 index in Europe was essentially unchanged for the day. It had gained 0.5% during November, its lowest monthly performance since June. The S&P 500 will experience its first monthly drop since April. It fell 0.4% in November. However, it recovered from a two-month-low a week earlier, which implied a 5% month-to date decline. Choppy November The global equity markets were unusually volatile in November of this year. Concerns about the sky-high valuations of tech stocks shook the markets, while a U.S. shutdown ended after 43 days. Bitcoin, which is a good indicator of risk appetite among investors, fell 16% in November. Federal Reserve officials are cautious because the shutdown of the federal government has not produced any economic data. However, heavyweights such as New York Fed President John Williams and Fed Governor Christopher Waller have expressed support for a cut in rates next month. This has been a key factor to the recovery of stocks. Samy Chaar, an economist at Lombard Odier, said that volatility is usually expected in September and October. We've seen it in November but have recovered the majority of it. "We had estimated a December cut of 30%, but now we are at over 80%. "I think that's a very good reason for the rally at month's end," he said. CME FedWatch shows that Fed funds futures indicate an 85% probability of a rate reduction next month. This is a dramatic change from the 30% chance a week ago. BOJ HIKE IS IN VIEW The dollar gained a little ground against a basket major currencies but was heading for its biggest weekly drop since July. It was almost unchanged over the course of the month. The Japanese yen was slightly stronger and the dollar fell 0.24% to 156.11yen. Last week, the yen reached a 10-month-low of 157.9 yen. Investors are now watching for any signs of intervention by Japanese authorities following weeks of verbal attempts at stopping its relentless decline. The data showed that Tokyo's core consumer prices rose by 2.8% from November of last year, which was above the forecasted 2.7% increase. This is just one of a number of data points that has kept the bets on a Bank of Japan rate hike alive. In a recent note, MUFG strategists stated that "today is also the end of the month and FX performance will often be determined by these less predictable flows." Markets bet on the end of rate-cutting cycles for both the Aussie and kiwi. The minutes of the European Central Bank meeting show that policymakers were also not in a hurry to reduce rates. The euro slipped 0.2%, to $1.157. This represents a 0.3% gain for the month. OIL, GOLD Up The U.S. continued to push for the peace plan in the Ukraine conflict, which led to a drop in oil prices on Friday. Brent crude futures reversed gains and traded down 0.25% to $63.18 per barrel. This is down nearly 2.5% from November. The spot gold price was up 0.5%, at $4,177 per ounce. This brings the monthly gain of around 4.5%.
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Putin hosts Hungary Orban to discuss energy and Ukraine
On Friday, Russian President Vladimir Putin welcomed Hungarian Prime Minster Viktor Orban to Moscow. This was a rare visit of an EU and NATO leader. He said he would be pleased for Budapest host a Russia-U.S. Summit with President Donald Trump. Orban called for detailed discussions on Russian oil and natural gas supplies. The Hungarian president, who met Putin for the fourteenth time, maintained close ties to the Kremlin, despite Russia’s war in Ukraine. This led to 19 rounds of EU sanction and a sharp reduction in the reliance on Russian oil. He has often questioned Western aid to Kyiv. Orban who has also warm relations with Trump was scheduled to host a Putin and Trump summit in October, but the U.S. president pulled out saying that he didn't want it to waste time. In televised remarks Putin thanked Orban for the offer of the venue and told him he still welcomed the meeting to Budapest. The talks took place as Trump's envoy Steve Witkoff prepared to meet Putin in Moscow in the next week to renew efforts to end this war. Orban stated that "we hope very much" that the peace offers on the table would lead to peace and a ceasefire. He had earlier posted on Facebook that he would be visiting Moscow to "ensure Hungary's supply of energy for the winter and in the next year." After Orban made a strong case for relief during an amicable meeting with Trump in Washington, the U.S. granted Hungary an exemption to sanctions so that it could use Russian oil and natural gas. A potentially unwelcome move for Moscow is that Hungary signed a nuclear cooperation pact with the U.S. for the purchase of fuel and technology to store spent fuel in Paks 1, a Russian-built facility south of Budapest. Rosatom, the Russian nuclear company, is building a new extension for its plant. The project was originally planned in 2014 but has been delayed by years. The Foreign Ministry of Hungary said that Hungary imported more than 7 billion cubic meters of natural gas and 8.5 million tons of crude from Russia in 2018. Putin said Hungary's position regarding the Ukraine war was "balanced". He also stated that bilateral trade fell by 23% due to "external sanctions" last year, but would recover by 7% by 2025.
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LME will lower client fees by 2026 to increase liquidity
London Metal Exchange announced on Friday that it will reduce transaction fees to its customers in order to increase liquidity on the LMEselect platform and support physical market trading. The LME announced that the electronic trading system's client trading and clearing fees will be reduced by 7.4% to 8.5 percent. The bourse announced that member electronic transaction fees would be subject to a "inflationary" increase of between 3.4% and 3.7%. However, it added that "all-in transaction costs" for an outright client trade on LMEselect will fall by 4.5%. The 148-year old exchange announced that the new fees would take effect on January 1, with the exception of client transaction fees which will be effective from March 1, 2026, to allow members time to implement any changes to procedures. In a statement, LME CEO Matt Chamberlain stated that "While we think that higher fees would be appropriate for inter-office trading that is more bespoke, we are committed to maintaining lower trade fees on physical markets, such as Ring Trades and short-dated Carry Trades, across all venues." (Reporting and editing by Joe Bavier; Tom Daly)
Adani, an Indian company, wants to invest up to $5 billion in Google's data centers to take part in the AI boom
Adani Group, owned by Alphabet, plans to invest $5 billion into Google's India AI Data Centre Project, an executive revealed on Friday. The company is looking to capitalize on the booming demand in data capacity across the world's largest nation.
Google announced in October that it would invest $15 Billion over five years in the state of Andhra Pradesh to build an artificial intelligence data center. This is its largest investment in India.
AI demands enormous computing power. This is driving demand for data centres with thousands of chips linked together in clusters.
Adani Group CFO Jugeshinder Singh stated that the Google project may mean an investment up to $5 billion in Adani Connex, a joint venture of Adani Enterprises with private data centre operator EdgeConneX.
Singh told reporters Friday that "It is not only Google. There are many parties who would like to collaborate with us, particularly when the capacity of our data centres goes up to gigawatts and beyond."
Google has committed to investing about $85 billion in expanding data centres capacity this year. Tech companies are investing heavily in infrastructure as they try to meet the demand for AI-based services.
The Indian billionaires Mukesh and Gautam Ambani also announced investments to build data centres.
The campus of the data centre in Visakhapatnam, a port city, will initially have a power capacity of one gigawatt. $1 = 89.3660 Indian Rupees (Reporting and editing by Kevin Liffey; Harshita Pandya, Dhwani Pandya)
(source: Reuters)