Commodities
Gold breaks $2,600 barrier as Fed cut bets prolong historic run
By Anushree Mukherjee
(Reuters) – Gold soared above the $2,600 level on Friday for the first time, extending a rally boosted by bets for further U.S. interest rate cuts, and rising tensions in the Middle East.
was up 1.3% at $2,620.63 per ounce by 1:43 p.m. ET (1743 GMT), while U.S. settled 1.2% higher to $2,646.20.
Bullion’s latest rally got a fillip after the Federal Reserve initiated an aggressive easing cycle on Wednesday with a half-percentage-point reduction, adding to the appeal for gold, which pays no interest.
Prices of the safe-haven asset have climbed 27% in 2024, their biggest annual rise since 2010, as investors also sought to hedge uncertainties spurred by prolonged conflicts in the Middle East and elsewhere.
The record rally could be poised for a correction, analysts said.
“Clearly, there’s still some buying activity associated with the Fed’s decision to begin their easing cycle with a big cut,” said Daniel Ghali, commodity strategist at TD Securities.
However, “the source of this buying activity remains off our radar,” given ETF inflows are relatively marginal and Asian buyers are still on a buyers’ strike, all signs of “extreme positioning,” Ghali added. [GOL/ETF]
The record rally has eroded retail demand in top consumers China and India. [GOL/AS]
The rally in gold “should not go on forever,” Commerzbank (ETR:) said in a note, citing the expectation for rate cuts of only 25 basis points each at the Fed’s next two meetings.
Still, some analysts said gold could see more upward spikes.
“Geopolitical risks, such as ongoing conflicts in Gaza, Ukraine, and elsewhere, will ensure to sustain gold’s safe-haven demand,” Forex.com analyst Fawad Razaqzada said in a note.
Continued weakness in the dollar, which makes gold cheaper for holders of other currencies, offered additional tailwinds, analysts said. [USD/]
Elsewhere, spot silver gained 1.2% to $31.16. Platinum fell 1.1% to $978.50 and palladium shed 0.5% to $1,074.84.
SHANGHAI (Reuters) – China will reduce import tariffs on ethane and certain recycled and aluminium raw materials from next year, the government said on Saturday.
The Ministry of Finance announced adjustments to various import tariff categories, effective Jan. 1, aimed at increasing imports of high-quality products, expanding domestic demand and promoting high-level opening-up, it said in a statement.
Provisional import tariffs below the most-favoured-nation rates will be applied to 935 items, the ministry said. Import tariffs will be reduced on ethane and certain recycled copper and aluminium raw materials to advance green and low-carbon development.
Tariffs will rise on commodities including molasses and sugar-containing pre-mixed powders will increase but be reduced on items such as cyclic olefin polymers, ethylene-vinyl alcohol copolymers and automatic transmissions for special-purpose vehicles such as fire trucks and repair vehicles.
Import tariffs will also be reduced on items such as sodium zirconium cyclosilicate, viral vectors for CAR-T tumour therapy, and nickel-titanium alloy wires for surgical implants.
The China-Maldives Free Trade Agreement will come into effect on Jan. 1, with tariff reduction implementations, the ministry said.
By Paul Carsten
LONDON (Reuters) – Oil prices edged up on Monday in thin holiday trade at the end of the year, as traders awaited more Chinese and U.S. economic data later this week to assess growth in the world’s two largest oil consumers.
futures rose 20 cents to $74.37 a barrel by 1208 GMT. The more active March contract was at $74.00 a barrel, up 21 cents.
U.S. West Texas Intermediate crude gained 27 cents to $70.87 a barrel.
Investors are eyeing China’s PMI factory surveys due on Tuesday and the U.S. ISM survey for December to be released on Friday.
Both Brent and WTI rose about 1.4% last week buoyed by a larger-than-expected drawdown from inventories in the week ended Dec. 20 as refiners ramped up activity and the holiday season boosted fuel demand. [EIA/S]
Available capacity at U.S. oil refiners is expected to decrease by 108,000 bpd in the week ending Jan. 3, research company IIR Energy said on Monday.
Oil prices were also supported by optimism for Chinese economic growth next year that could lift demand from the top crude oil importing nation.
To revive growth, Chinese authorities have agreed to issue a record 3 trillion yuan ($411 billion) in special treasury bonds in 2025, Reuters reported last week.
“Global oil consumption reached an all-time high in 2024 despite China underperforming expectations, and oil stockpiles are heading into next year at relatively low levels,” said Ryan Fitzmaurice, senior commodity strategist at Marex.
“Going forward, China economic data is expected to improve as the recent stimulus measures take hold in 2025. Also, lower rates in the U.S. and elsewhere should be supportive of oil consumption.”
Separately, the World Bank has raised its forecast for China’s economic growth in 2024 and 2025, but warned that subdued household and business confidence, along with headwinds in the property sector, would remain a drag next year.
SHANGHAI (Reuters) – China will reduce import tariffs on ethane and certain recycled and aluminium raw materials from next year, the government said on Saturday.
The Ministry of Finance announced adjustments to various import tariff categories, effective Jan. 1, aimed at increasing imports of high-quality products, expanding domestic demand and promoting high-level opening-up, it said in a statement.
Provisional import tariffs below the most-favoured-nation rates will be applied to 935 items, the ministry said. Import tariffs will be reduced on ethane and certain recycled copper and aluminium raw materials to advance green and low-carbon development.
Tariffs will rise on commodities including molasses and sugar-containing pre-mixed powders will increase but be reduced on items such as cyclic olefin polymers, ethylene-vinyl alcohol copolymers and automatic transmissions for special-purpose vehicles such as fire trucks and repair vehicles.
Import tariffs will also be reduced on items such as sodium zirconium cyclosilicate, viral vectors for CAR-T tumour therapy, and nickel-titanium alloy wires for surgical implants.
The China-Maldives Free Trade Agreement will come into effect on Jan. 1, with tariff reduction implementations, the ministry said.
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