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ASIA GOLD - Gold rally hit demand as India's discount widens, China's reach a five-year high
Gold discounts in India reached a new high of more than one month as record bullion price dampened retail demand, even during peak wedding season. Markdowns in China also hit their highest level since late August 2019. This week, Indian dealers are offering discounts Discounts of up to $37 an ounce on official domestic prices, inclusive of 6% import duties and 3% sales taxes - compared to last week's discount of $34. A Mumbai-based dealer for a private bank stated that the rally in gold prices has dampened wedding season jewellery purchases. This has undermined jewellers' hope of maintaining momentum, despite higher prices. This week, domestic gold prices reached a new record high of 135,590 rupies ($1,503.76) for 10 grams, compared to last week's record price of 132 776 rupies. Amit Modak said that demand was about a quarter below normal and prices were continuing to rise. In India, weddings are the main driver of gold demand. Family and friends often gift bullion to mark these occasions. Data shows that in China, the top consumer of bullion, prices are at their highest level since over five years. Chinese discounts on physical gold reached a "record" of $87.50 by August 2020, as the retail appetite for gold plummeted due to the COVID-19 pandemic. Independent analyst Ross Norman stated that "higher prices are having a negative impact on domestic consumption, wholesale and retail, because the demand for products is so low." Norman said, "The only positive area seems to be the ETF side. Institutional investors continue to buy (gold) along with the PBOC." In Singapore In Hong Kong, gold was sold at a discount ranging from $0.5 to $2.2 It traded at par or a $1.8 markup over spot prices. In Japan A Tokyo-based trader stated that bullion was trading at a discount of up to $6 to a premium of $0.5 over spot prices, as retail shops had run out of stocks of gold bars. However, there may still be a good demand for buying if a dip occurs. ($1 = 90.1675 Indian Rupees) (Reporting and editing by Leroy Leo; Ishaan Jadhav, Bengaluru)
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Putin makes clear that he will not compromise on Ukraine during the annual press marathon
Vladimir Putin stated on Friday that Russia’s terms to end the war in Ukraine are unchanged from what he outlined in June 2024. This is a sign of no compromise, as the United States continues to push for a resolution. Putin outlined the Kremlin stance at the start of his annual press conference that lasts for four hours. He said he didn't see any readiness from the Ukrainian side for a peace agreement, but that there were "certain signs" of a willingness to engage in dialogue. Putin stated: "The only thing that I would like to say is we have always been clear that we were ready and willing for this conflict to be resolved peacefully based on principles that I laid out last June in the Russian Ministry of Foreign Affairs and by addressing root causes which led to the crisis." Assessment of Battlefield Situation He was referring back to a recent speech in which he called on Ukraine to abandon its desire to join the NATO military alliance and withdraw from four areas that Russia claimed as its territory. Putin gave a detailed analysis of the battlefield, stating that Russia advanced along the entire frontline and Ukrainian forces are?in retreat'. Ukraine claims that Russian gains have been incremental, and come at a cost of massive casualties. It claims to be fighting back at locations like Kupiansk, in the northeast. Russia claimed it had taken Kupiansk last month. Kyiv has long called for ceasefires and stated that it doesn't believe Putin is sincere about his desire to bring peace. Russia claims that Ukraine is the one refusing to sit down at the table. The war is at a critical juncture after nearly four years. U.S. president Donald Trump wants a peace agreement on terms that Ukraine, its European allies and the United States fear are slanted toward Russia. Russia is awaiting to hear how the United States has modified its draft peace proposal following consultations with the Europeans, Ukraine, and the United States. After eight years of fighting, Russia invaded Ukraine on February 20, 2022. This was the largest confrontation between Moscow, the West and the Cold War. Trump, who wants to be known as a peacemaker in history, complained that the end of the war in Ukraine was one of his elusive foreign policy goals. UKRAINE CONTROLS PRESS CONFERENCE IN EARLY STAGES The first phase of the annual "Results of the Year", which Putin has organized in various formats since 2001, was dominated by the state of the conflict and the question of its end. He uses it for dozens of questions about everything from price increases to nuclear weapons. Some questions are submitted by journalists, while others come from ordinary Russians who submit them by phone or online. The Kremlin announced that it received over 2.6 million questions ahead of the event on Friday. The COVID test was administered to all attendees. This is a routine procedure for Putin's meetings, even 73 years after the pandemic ended. The decision was welcomed in Moscow. Instead of using frozen Russian assets to fund Ukraine's defense against Russia, the European Union decided to borrow money to pay for it. This avoided divisions about an unprecedented plan to use Russian sovereign cash to finance Kyiv. They said that they reserve the right to use Russian assets as repayment if Moscow does not pay Ukraine's war reparations. Putin?casts this war as a watershed in relations with the West. He says that the West humiliated Russia in 1991 after the Soviet Union collapsed by expanding?NATO, and invading what he believes to be Moscow's sphere. A ceasefire could reunite Russia, which has some of the largest reserves of natural resources in the world - from diamonds to oil to rare earths and even rare earths themselves - with the U.S. at the same time that it is focusing on the competition with China with whom Putin formed a "no limitations" partnership. The continuation of this war could result in many more deaths and drain the economies of Ukraine and Russia, as well as European powers. It also increases the likelihood of war escalation. U.S. officials claim that Russia and Ukraine has suffered over 2 million casualties since the beginning of the war, including dead and injured. Russia and Ukraine do not provide credible estimates on their losses.
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Japan bond yields rise after BOJ hike; Wall Street poised to gain
The yen and Japanese government bond yields both fell on Friday after the Bank of Japan increased interest rates to the highest level in three decades and left the door wide open for further tightening. European stocks rose 0.1% overnight, but they were not able to match the trading sessions that took place in Asia and America. Wall Street futures indicated gains between 0.3% to 0.5% after Thursday's rally on the back of stellar results by chipmaker Micron Technology. Investors digested the news that the European Union will provide Ukraine with 90 billion euro ($105.4 'billion) in support over the next 2 years. However, they failed to agree on a plan to use frozen Russian funds to finance this. Investors sold the yen in response to the BOJ's rate hike, which was widely anticipated. This led to some profit-taking. The dollar last rose?as high as 1% against the yen, at 157.07, while Japan's 10-year bond yield reached a 26-year high and the Nikkei closed 1% higher. The BOJ decision to raise short-term interest rates from 0.5% to 0.75% is another step towards ending the decades-long monetary aid in Japan. Analysts say that the BOJ will need to "plot a careful course to manage inflation" as Japan's government prepares for major fiscal stimulus. Shaniel Ramjee is co-head of Pictet Asset Management's multi-asset division. "Markets anticipate the Bank of Japan to have to increase rates even more," he said. "That extra fiscal expenditure might continue to weaken yen and exacerbate inflation." Abhijit Suriya, senior economist at Capital Economics, said that he expects BOJ rates to reach 1.75% in 2027. ECB AND BoE OFFER DISTINCT LEVELS OF HAWKISHNESS The wider sentiment was boosted by a'surprise slowdown' in U.S. Consumer Price Inflation to 2.7%. However, analysts warned that the data had been distorted downwards due to the government shutdown, and therefore could not be taken as a true reflection. The Federal Reserve's pricing moved very little, with an implied rate cut of just 27% in January, and 10-year Treasury yields at 4.1354%. This is a far cry from the recent high of 4.209%, which was reached three-and-a half months ago. British bonds took a big hit overnight after the Bank of England's rate cut, as expected. However, it was only after a 5-4 vote. The policymakers have also expressed caution over the pace of future easing, and another cut is not fully priced until June. The European Central Bank, which held rates at 2.0% and indicated a probable end to the easing cycle, was even more hawkish. The markets indicate that there is only a small chance of a 2026 cut. Gold fell 0.1% on the commodity markets to $4,329 per ounce, still below its October high of $4,381. Brent crude oil fell by 0.5%, to $59.51 per barrel. U.S. crude oil declined 0.5%, to $55.89 a barrel.
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Investors weigh US interest rate outlook and AI bubble as they raise copper prices
The copper price rose on Friday as investors looked at the possibility of U.S. rate cuts in 2019 following lower consumer inflation in the United States. However, a possible artificial?intelligence bubble tempered?gains. The most-active contract for copper on the Shanghai Futures Exchange ended daytime trading 0.46% higher at 93180 yuan (US$13,234.86) per metric ton but finished the week 1.07% down. It reached a record of 94.030 yuan last week. As of 0714 GMT the benchmark three-month Copper on the 'London Metal Exchange rose 0.29%, to $11,812 per ton. The week is expected to end 2.53% higher. According to data released Thursday, the U.S. consumer price index rose less than expected in the year ending November. This gave some hope for rate cuts next year. Federal Reserve announced a rate cut of 25 basis points last week but indicated that it may not be doing so in the near future. The 43-day shutdown of the government has left statistics in a state of ambiguity. This has affected the financial markets and the bank. The skepticism surrounding AI trades is exacerbated by the recent tech stock crash and Oracle's partner in data centres, Blue Owl Capital?, pulling out of an agreement worth $10 billion for its next facility. Copper is widely used in data centers. Among SHFE ?base metals, nickel rose 3.17%. The London nickel benchmark rose 1.36%. Nickel ore, which is used in stainless steel and batteries, has recovered from a slump that occurred earlier this week, after the mining association of Indonesia, the country's top producer, announced that government plans to reduce annual nickel production?to about 250 million tons. Aluminium rose by 0.89% in Shanghai. Zinc advanced by 0.17%. Lead gained 0.42%. Tin increased?2.40%. The LME also saw gains in zinc, lead, and tin. $1 = 7.0405 Chinese Yuan Renminbi (Reporting and editing by Sherry Jackson, Harikrishnan Nair and Sherry Jacob Phillips)
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Gold prices fall on lower US inflation figures and a firmer dollar
Gold prices fell on Friday as lower-than expected U.S. inflation data reduced the appeal of bullion as a "hedge" against price increases, and a stronger dollar added to that. As of 0615 GMT spot gold was down 0.1% at $4,328.24 per ounce, but it was expected to finish the week 0.6% higher. U.S. Gold Futures dropped 0.2% to $4356.80. Spot silver increased 0.8% to $65.93 per ounce. It appears poised to finish the week at a?6% higher level after reaching an all-time high of $66.88 an ounce on Wednesday. Silver is up 128% this year, surpassing gold, which has seen a rise of 65%. The dollar remained near its 'one-week-highs,' making precious metals priced in greenbacks more expensive to other currency holders. Tim Waterer, KCM Trade's Chief Market Analyst said: "The softer inflation prints were a double-edged blade (for gold and Silver) in that they help justify a more dovish Fed but also means that their appeal as inflation hedges is diminished." The dollar is also creating resistance. U.S. consumer price index rose 2.7% in November, a far lower rate than the 3.1% increase predicted by economists. After the data, the Fed funds rate futures showed a slight increase in the likelihood of reducing rates at the January meeting. Goldman Sachs believes that gold prices will rise 14% by December 2026 to $4,900/oz in its base scenario, according to a note released on Thursday. However, it also cited upside risks due to the potential diversification of private investors. Waterer said that "precious metals have become a rage, and platinum and palladium are now following gold and silver in the trend." Platinum climbed 1.1% to reach $1,937.20 on Friday after reaching a 17-year high. Palladium rose 0.6% to $1706 after reaching a near three-year high in the previous session. Palladium is on course for its best weekly gain since September 2024.
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Investors on edge as rate hike bets and financials boost Australia shares
Australian shares recorded modest gains on Friday. The majority of sectors were in the green and banking stocks, at the top at the end of a week that was otherwise depressing as investors considered the Reserve Bank’s rate hike trajectory for 2026. The S&P/ASX 200 index closed the day 0.5% higher, at 8,628.20. The benchmark index, however, ended three consecutive weeks of gains by losing 0.8% on Friday. Investors are betting on rate increases in the first half 2026, after a stubbornly high inflation and a hawkish stance at a central bank meeting last week. The markets are still betting on a Reserve Bank of Australia's cash rate of?3.6% next year. Odds of an increase in February? are priced at 25%. They rise to 45% by March, and 75% by May. After a nice rebound from their lows in November, shares are now under pressure. "Our view is that the renewed weakness over the past two weeks was a correction," said Shane Oliver. He is the head of investment strategy at AMP and the chief economist. The Reserve Bank of Australia minutes for its December meeting will be released next week. A key reading of monthly inflation is scheduled to be released early in January. All four "Big Four" banks ended in positive territory, as the financial sector advanced by 1.1%. The sub-index's performance in 2026 will be closely monitored after concerns over frothy values and soft earnings growth put it on track for a 7% annual gain, which is sharply below last year’s 28.2% surge. Stocks of rate-sensitive consumer discretionary and real estate added 0.8% each. The only exception was the mining industry, which lost 0.6%. BHP and Fortescue fell 1.2%?and 3.2% respectively. The sub-index fell 1.7% on a weekly basis, ending three weeks of gains. The S&P/NZX 50 closed at 13,333.40, up 0.6%. The benchmark index, however, fell 0.6% in its third week of losses. (Reporting and editing by Ronojojo Mazumdar in Bengaluru. Nikita Maria Jio is based in Bengaluru.
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MORNING BID EUROPE - Japan's savers can party like it is 1999
Wayne Cole gives us a look at what's ahead for the European and global markets. After 30 years of waiting, Japanese savers are finally able to get 0.75% on their money. Just don't spend all your savings at once. Bank of Japan raised rates by a quarter-point to 0.75%, as was expected. The market's knee-jerk response was to sell the yen and the dollar shot up as high as 156.19 before stabilizing at 156.00. The Nikkei gained 1.2% in the first hour, largely due to a Wall Street rally sparked by stellar Micron Technology results. The BOJ was not dovish. The BOJ noted that real rates remained at "significantly low" levels, even after the increase. It also pledged to continue tightening if the economy and inflation progressed as expected. The policymakers also seemed more confident in the ability of firms to continue raising?wages and maintain inflation at around 2%, a cycle they have spent decades trying create. The bond market took them at their word and 10-year yields climbed by 5 basis points, to 2.115%. This is the highest level since August 1999, when 'Genie in a Bottle' was ranked?No.1 in the charts. 1. Investors now await BOJ Governor Ueda's post-meeting press conference. His comments have previously moved the markets. His thoughts on terminal rates will be one of the main topics. He has long said that neutral is a range between 1.0% and 2.5%. But markets only price in one more increase to the bottom of this band. If Ueda were to hint at anything more, it could hurt bonds while helping the yen. If not, the U.S. CPI data released on Thursday could contain a lot of damned statistics and lies. No serious economist thinks that inflation really slowed down to 2.7% from 3.0% in October (October was lost due to the shutdown). The Bureau of Labor Statistics was only able to collect data from mid-November onwards, in time for Black Friday sales. The BLS' method for addressing the lack of data for October also created a downward bias on rents and owner's equivalent rentals, which is likely to last for some time. The impact of this may not be reversed before the April edition of the CPI, which is when the annual readings are released. What the Fed's policymakers need. The following are key developments that may influence the markets on Friday. ECB's Lane, Cipollone and Kocher are among the speakers - EU Flash Consumer Confidence; German GfK Sentiment; German and French Producer Prices; UK Retail Sales US University of Michigan Consumer Sentiment, Existing Home Sales
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The price of oil is expected to fall for the second consecutive week
The oil prices fell on Friday, and are expected to fall for the second consecutive week as rising prospects of a Russia/Ukraine deal counteract concerns about supply disruptions due to a Venezuelan blockade. Brent?crude?futures fell 9 cents or 0.2% to $59.73 a bar by 0456 GMT. U.S. West Texas intermediate crude traded 13 cents or 0.2% lower at $56.02 a bar. Brent fell 2.3% on a weekly basis while WTI?was down by 2.5%. Donald Trump, the U.S. president, said on Thursday that he believed talks to end?the conflict in Ukraine were "getting closer to something". This is ahead of an upcoming U.S.-Russian?officials meeting this weekend. It was not clear, in the case of the second potential geopolitical trigger, how the U.S. could enforce Trump's declaration to blockade oil tankers that enter and leave Venezuela (which?makes?around 1%?of global supply) under sanctions. The U.S. Coast Guard seized an oil tanker from Venezuela in a historic move last week. "Uncertainty about enforcement details and the optimism that a possible U.S. led Ukraine peace deal may still emerge (are) easing supply concerns in global markets and tempering risk premiums," IG Analyst Tony?Sycamore stated on Friday. Analysts say that further measures against Russian oil may pose a greater risk to supply than Trump's Venezuelan?blockade on tankers. According to sources familiar with Venezuelan oil export operations, Venezuela authorized on Thursday two very large crude carriers that were not sanctioned by the country?to sail towards China. Bank of America analysts predict that the lower oil price will reduce the supply of oil, which may prevent a rapid fall in the prices. Sycamore, IG's analyst, said that a rally above the resistance level of $56.70-$56.90ish could strengthen the argument that the selloff this week to the $54.98 bottom was a false breakdown lower. "Conversely a break under $54.98/90ish will reignite the downside momentum and target the psychological $50.00 threshold." (Reporting and Editing by Shri Navaratnam).
Rosneft, Russia's oil company reports 70% drop in nine-month net profit
Rosneft, Russia's biggest oil producer, reported a 70% drop in net income from January to September, falling by $3.57 billion or 277 billion Russian roubles. The company attributed the decline to high interest rates and cheaper oil, as well as a stronger rouble.
Shell and TotalEnergies have seen their quarterly profits fall due to lower oil prices.
Rosneft stated that the increased "anti-terror" security was putting additional pressure on its results.
The company didn't elaborate on specific security measures. Ukraine has increased drone attacks against Russia's energy infrastructure.
Rosneft reported that its revenues dropped 17.8% to 6.29 trillion rubles in the first nine-month period of the year.
The high key interest rate of the Bank of Russia continues to negatively impact the profit. Rosneft also said that non-monetary factors and special events had a negative impact on the indicator's dynamic during the reporting period.
EBITDA (earnings before taxes, depreciation, and amortization) decreased by 29.3% for the period to 1.6 trillion Russian roubles.
(source: Reuters)