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Gold drops 1% due to uncertainty over rate cuts, but is set to rise for a third consecutive month
Gold prices fell 1% on the Friday due to uncertainty over another interest rate cut by the U.S. Federal Reserve this year. However, gold is still poised for its third consecutive monthly gain. At 12.46 pm, spot gold dropped 1% to $3.984.49 an ounce. ET (1646 GMT), and is on track to gain 3.3% this month. U.S. Gold Futures for December Delivery fell by 0.5% to $3,997 an ounce. Dollar index was near its three-month-high, making bullion priced in greenbacks more expensive for holders of other currencies. Beth Hammack, the president of the Federal Reserve Bank of Cleveland, said that she was opposed to the central bank lowering interest rates this coming week. She added that the Fed must maintain some restrictions to reduce inflation. Hammack is crushing gold, as she is the third Fed regional president to publicly oppose rate cuts given high inflation. Hammack is a FOMC member in 2026, and this shows that the market overestimated lower rates. CME FedWatch showed that the Fed reduced interest rates on Wednesday. However, hawkish comments from Chairman Jerome Powell have led to a drop in market expectations from 90% earlier this week to 63% now. When interest rates rise, gold loses its appeal as it is not a yielding asset. This metal is up 53% in the past year and reached a new record high on October 20, reaching $4,381.21. Morgan Stanley stated on Friday that it still sees gold as a positive investment due to interest rate reductions, ETF flows, central bank purchases, and the ongoing uncertainty in the economy. The bank anticipates that gold will average $4,300 during the first half 2026. U.S. president Donald Trump announced on Thursday that he would reduce tariffs against China from 57% to 47% in exchange for Beijing crackingdown on the illicit fentanyl market, resumed U.S. soya bean purchases and kept rare earths exports flowing. Silver fell by 0.7%, to $48.58 an ounce. Platinum fell 1.7%, to $1.582.89 and palladium dropped 0.2%, to $1.442.01. (Reporting and editing by Deepababington, Vijay Kishore, and Alexander Smith, with reporting by Noel John in Bengaluru and Pablo Sinha).
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Zambia's biggest bank issues nation's first sustainable bond
Mukwandi Mukbesakunda, the Chief Executive Officer of ZANACO said that they plan to raise $100m through their first sustainability bond. This was revealed at a Lusaka press conference on Friday. In recent years, a variety of countries, both in developed and emerging markets, have issued bonds to raise capital for environmental or social projects. ZANACO will issue its bond in two tranches. The first is a private placement of $50 million within six months. This will be followed by a public placement of $50 million after the initial sale. Chibesakunda stated that the bank has been in contact with private investors, and will reveal their identities when agreements are finalised. The bond funds will be used to support projects that promote renewable energy, sustainable agriculture, and climate-resilient construction, all in accordance with Zambia's Green Growth Strategy (2020-2030) as well as its Climate Change Act. Chibesakunda called the issue a "promise to channel resources towards projects that safeguard the environmental and uplift the communities," calling it an important milestone for Zambian capital markets. According to the Africa Policy Research Institute (APRI), Africa only accounts for less that 1% of the $2.2 trillion global green bond market. This shows a large funding gap for climate-related projects on the continent. According to estimates from the World Bank, Africa will need $2.8 trillion to implement its Nationally Determined Contributions (NDCs), set in 2015 as part of Paris Agreement. These NDCs are aimed at reducing greenhouse gas emissions and adapting climate change. This target will not be reached with current climate-related budgets or donor pledges based on past trends. (Reporting and editing by Hugh Lawson; Colleen Goko, Chris Mfula)
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CFO of Vale Brazil says that Vale is likely to announce extraordinary dividends in the near future.
Vale will likely announce exceptional dividends in the next few months, said Chief Financial Officer Marcelo Bacci during a Friday call with analysts, following the release by the Brazilian miner of its third-quarter results. The prospect follows stronger-than-expected cash flow early in the year and comes as iron ore prices have consistently held up above $100 per metric ton, Bacci said. Vale, the largest iron ore miner in the world, announced on Thursday that its net profit had increased by 11% over the previous year, exceeding market expectations. The firm's executives said that it is on track to achieve all of its full-year forecasts. When asked whether a Brazilian law that seeks to impose a withholding tax of 10% on dividends would affect potential extraordinary dividends, dividends sent abroad Executives said that they closely monitored developments in order to minimize the impact on shareholders. The executives noted that the impact would be minimal. Bacci said Vale also does not expect to change its policy on expanded net debt in the near future, since the current framework and range is considered suitable for the present conditions. The miner stated that the trend of its net debt expansion is now in the middle of its target range of $10 billion to $20 billion. Gustavo Pimenta, the CEO of the company, ruled out mergers and acquisitions on that same call. He said, "We don't have to do this. We already have the resources." Vale shares traded in Sao Paulo rose by about 2% Friday. (Reporting and editing by Isabel Teles, Marta Nogueira)
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Bulgaria restricts fuel imports into EU after Lukoil sanctions
Bulgaria's Parliament temporarily banned exports of certain fuels to EU members on Friday to ensure stability on the local market after U.S. sanctioned Russia's Lukoil which operates the country's largest oil refinery. Bulgaria announced last week that it would take steps to ensure uninterrupted oil and oil derivatives supplies after the U.S. sanctioned Lukoil, Rosneft and other Russian oil companies over their war in Ukraine. The decision was made by the parliament, which was initiated by the ruling parties. It received 135 votes for, four against, and 42 abstentions. According to BTA, the ban does not apply to the refueling of ships and aircraft, domestic or foreign, and to deliveries to the armed services of member states of the European Union and NATO. The director of customs was instructed by the Parliament to impose the ban on fuel products. He is also authorized to export certain products at his own discretion. The State Agency for State Reserve and Wartime Stocks was also ordered to inspect the quantities of fuel reserves within a week. Lukoil operates Bulgaria's Burgas oil refining plant, which produces 190,000 barrels of crude oil per day. It also runs more than 200 petrol station and has an extensive fuel depot and transport network. Lukoil announced on Thursday that it had accepted a Gunvor offer to purchase its foreign assets. The second largest oil company in Russia was looking to sell these assets after Washington's sanctions.
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Gold prices steady as traders evaluate further rate cuts. Set for third monthly increase
Gold prices held firm above $4,000 per ounce as traders assessed the uncertainty surrounding another interest rate reduction by the U.S. Federal Reserve in this year. However, the metal was poised to make a third consecutive monthly gain. At 10:59 am, spot gold was unchanged at $4.021.86 an ounce. ET (1459 GMT) after dropping to $3,988.37 in earlier session. Prices are on track to increase by 4% in the month of April. U.S. Gold Futures for December Delivery were up 0.2% to $4,024.9 an ounce. Dollar index was near its three-month-high, making bullion priced in greenbacks more expensive for holders of other currencies. Many traders were waiting to reallocate their gold back into the market. "I think they did it below the $4,000 level," said Phillip Streible. Chief market strategist at Blue Line Futures. The U.S. Federal Reserve cut interest rates on Tuesday, but the hawkish comments of Chair Jerome Powell caused traders to reduce their bets for another rate cut in December. The CME FedWatch tool shows that the markets now price a 65% probability of a rate cut in December. This is down from 90% earlier in this week. When interest rates rise, gold loses its appeal as it is not a yielding asset. This metal is up 53% in the past year and reached a new record high on October 20, reaching $4,381.21. Morgan Stanley said on Friday that it still sees gold as a positive investment due to interest rate reductions, ETF purchases, central bank purchases, and the ongoing uncertainty in the economy. The bank anticipates that gold will average $4,300 during the first half 2026. U.S. president Donald Trump announced on Thursday that he would reduce tariffs against China from 57% to 47% in exchange for Beijing crackingdown on the illicit fentanyl market, resumed U.S. soya bean purchases and kept rare earths exports flowing. Palladium rose 1.1%, while platinum fell 1.3%, to $1.590.55. (Reporting and editing by Deepa Babyington and Vijay Kishore in Bengaluru. Reporting by Noel John, Pablo Sinha and Noel John from Bengaluru)
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Dollar climbs following Fed comments and stock gains after earnings
The global stock market was poised to post its third consecutive week of gains, and seventh consecutive month of growth on Friday. Earnings from Apple and Amazon eased concerns over lofty valuations. Meanwhile, the dollar rose after comments by some Federal Reserve officials. Amazon's stock soared by more than 10% following the announcement that cloud revenue grew at the fastest rate in almost three years. This helped the company to forecast quarterly sales exceeding estimates. Apple shares fell 0.3%, to $270.52, after hitting an intraday high of $277.32, after the company reported its quarterly earnings. It also forecasted holiday quarter iPhone sales, and overall revenue, that exceeded Wall Street expectations, thanks to strong demand from iPhone 17 models. The results are the culmination of a week of impressive earnings from several large companies that make up the "Magnificent 7" group. These earnings showed the continued growth of the infrastructure around artificial intelligence. Jake Seltz is the portfolio manager of the Empiric LT Equity Team at Allspring, Minneapolis. We've seen the same thing for several quarters in a row. Just looking at capital spending, and building out some cloud capacity for AI Data Centers across the board. The Dow Jones Industrial Average is the benchmark for Wall Street. Rose 75.26 points 47,597.38; The S&P 500 is a stock market index. Rose 38.30 points 6,860.64; The Nasdaq Composite Index Rose 254.26 points 23,835.40 The Nasdaq is on course for its seventh consecutive monthly gain, the longest streak since Jan 2018. MSCI's index of global stocks rose 2.56 points or 0.25% to 1,007.74. It is on course for its seventh consecutive monthly rise, the longest since August 2021. The pan-European STOXX 600 Index fell by 0.53% following a series of mixed earnings quarters and a benign inflation report for the euro zone that confirmed the European Central Bank’s belief that price pressures are contained. The Bank of Japan also held interest rates at the same level this week, despite predictions from many economists that they would be raised. The dollar has strengthened in recent days after some Fed officials made comments that dampened expectations that the central bank would cut interest rates during its December meeting, following comments by Chair Jerome Powell that cast doubt over another cut for this year. Kansas City Fed President Jeffrey Schmid dissented from cutting interest rates in this week's meeting, citing concerns that high inflation could continue and that signs of inflation spreading throughout the economy might raise doubts as to the central bank’s commitment to the 2% target. Lorie Logan, the Dallas Federal Reserve president, said that the Fed shouldn't have reduced interest rates this past week or in December. The dollar index (which measures the greenback versus a basket currencies) rose by 0.3%, to 99.77. Meanwhile, the euro fell by 0.29%, to $1.1531. The dollar index, which measures the greenback against a basket of currencies, rose 0.3% to 99.77. Meanwhile, the euro fell 0.29% at $1.1531. The Japanese yen gained 0.08% to reach 153.98 dollars. Satsuki Katayama, Japanese Finance Minister, said that the government was monitoring the foreign exchange market with great urgency since the yen dropped to around 154 dollars. The Bank of Japan's (BOJ) expectations of a rate increase are not affected by the latest economic data. Core inflation in Japan’s capital increased in October, and was above the central banks' 2% target. The yield on the benchmark U.S. 10 year notes dropped 1.2 basis to 4,081%, while the yield of the 2-year notes, which moves typically in line with expectations about interest rates for the Federal Reserve fell 2 basis to 3,594%. U.S. crude oil rose by 0.28%, to $60.74 per barrel. Brent rose to $65.05 a barrel on the same day. (Reporting and editing by Andrew Heavens; Marc Jones and Stella Qiu, in London; and David Holmes and Mark Heinrich in Sydney)
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Gold prices steady as traders evaluate further rate cuts. Set for third monthly increase
Gold prices were stable above $4,000 per ounce as traders assessed the uncertainty surrounding another rate cut this year by the U.S. Federal Reserve. However, the metal was poised to make a third consecutive monthly gain. At 9:32 am, spot gold was unchanged at $4.023.44 an ounce. ET (1332 GMT), the price of gold had fallen to $3,988.37 in earlier part of the session. Prices are on track to increase by 4% in the month of April. U.S. Gold Futures for December Delivery were up 0.5% to $4,035.30 an ounce. Dollar index was near its three-month-high, causing greenback bullion to be more expensive for holders of other currencies. Many traders were waiting to re-allocate their gold holdings. Phillip Streible is the chief market strategist for Blue Line Futures. He believes that they did this below $4,000. The U.S. Federal Reserve cut interest rates on Tuesday, but the hawkish comments of Chair Jerome Powell caused traders to reduce their bets for another rate cut in December. The CME FedWatch tool shows that the markets now price a 65% probability of a rate cut in December. This is down from 90% earlier in this week. When interest rates rise, gold loses its appeal as it is not a yielding asset. This metal is up 53% in the past year and reached a new record high on October 20, reaching $4,381.21. Morgan Stanley said on Friday that it still sees gold as a positive investment due to interest rate reductions, ETF purchases, central bank purchases, and the ongoing uncertainty in the economy. The bank predicts that gold will average $4,300 during the first half 2026. Donald Trump, the U.S. president, said that he would reduce tariffs against China from 57% to 47% in exchange for Beijing crackingdown on illegal fentanyl trafficking. He also promised to resume U.S. purchases of soybeans and keep rare earth exports flowing. Palladium rose 1.4% to 1,464.75, while platinum fell 1.7% to $1583.80. (Reporting and editing by Noel John in Bengalur, Pablo Sinha at the New York Times)
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Canada's GDP contracted in August and could avoid a third-quarter recession
Data showed that the Canadian GDP shrank in August, despite a consensus estimate for flat growth. An advance estimate indicated the economy could avoid a recession by the third quarter. Statista Canada reported that the economy contracted by 0.3% during August, following a 0.3% increase in July, which was revised upwards. This effectively negated any growth in the current third quarter. This was the fourth contraction in five month and was primarily due to a decline in the growth of both the goods and services sectors. A preliminary indicator indicated that the monthly GDP was likely to grow by 0.1% in the month of September, bringing the annualized growth for the third quarter up to 0.4%. The estimate may not be accurate. StatsCan publishes the quarterly annualized estimate based on data on industrial production, while StatsCan releases quarterly annualized GDP based solely on income and expenses. Canada can avoid recession if the economy grows in September. A recession is defined as two consecutive quarterly contractions. Canada's GDP shrank by 1.6% in the second quarter as tariffs and trade uncertainty slowed exports. Michael Davenport is a Senior Economist with Oxford Economics. He said that the Canadian economy was on the brink of a major recession. Some economists believe that the federal budget next week could boost spending and demand, and grow the economy. After the release of the data, the Canadian dollar continued to weaken and traded at 1.4022 U.S. dollars or 71.32 U.S. Cents. The yields on government bonds with a two-year maturity fell by 1.5 basis points, to 2.397%. Data showed that the manufacturing sector, which has been hardest hit by U.S. Tariffs and represents almost a 10th of GDP, contracted 0.5% in August. The largest drop was in the mining, oil and gas extraction and quarrying industries, which decreased by 0.7%. This was primarily because of a 1.2% decline in metal ore and a 5.0% drop in coal mining. In the services sector the biggest contractions occurred in the transportation and warehouse sectors, partly due to an airline strike. The decline in this sector was partially offset by growth in real estate, retail trade, and rental and leasing.
Oil prices are being held down by a subdued supply and a large amount of oil despite geopolitical risk
A poll conducted on Friday showed that analysts are keeping their oil price predictions largely the same as OPEC+'s rising output targets and a lacklustre market demand have offset geopolitical risk to supply.
According to a survey conducted by 36 economists and analyst in October, Brent crude is expected to average $67.99 a barrel in 2025. This is about 38 cents higher than the estimate from last month. West Texas Intermediate will average $64.83 per barrel in 2025. This is slightly higher than September's estimate.
Brent and WTI have been averaging $69.27 and $65.92 respectively so far this year.
Tobias Keller, UniCredit's analyst, said that the oil prices of 2025 will be shaped by a delicate equilibrium between supply growth, modest consumption, and geopolitical uncertainties.
The market is well supplied, thanks to the rising production from OPEC+ producers and non-OPEC ones. However, the demand growth, although positive, has slowed, especially in OECD countries.
Analysts predict that oil will be in surplus by 2026. Estimates range from 0.19 million barrels per daily (bpd) to 3.0 million. Oil prices fell to their lowest level in five months on October 20 due to fears of an oil glut and economic concerns related to U.S. China trade relations.
Since April, OPEC+ has increased its output targets by over 2.7 million bpd. This is around 2.5% global supply. It's also just under half of the 5.85 millions bpd cut the group previously agreed on.
After a 137,000-bpd increase for November, the group has indicated that it is inclined to make another modest increase in its oil production for December.
Suvro Sarkar, DBS analyst, said that while the OPEC+ response to market conditions continues to be flexible, the current action appears to be driven more by a desire for market share than a desire to support oil prices.
The U.S. imposed sanctions on two of Russia's biggest oil companies this month, and markets are monitoring the fragile ceasefire that has been reached in Gaza.
Keller said that the ceasefire in Gaza has reduced regional risk premiums while new sanctions against Russian oil and attacks on infrastructure have brought up fresh concerns about supply.
Analysts predict that global oil demand will grow between 0.65 and 2 million bpd in this year. This growth is largely due to the growth of China.
(source: Reuters)