Gold touches record peak on US election jitters, Middle East woes

Gold prices hit a record high on Tuesday, as uncertainties surrounding the US presidential election and the Middle East conflict, along with expectations of an interest rate cut by the Federal Reserve, boosted bullion’s appeal.

Spot gold was up 1% at USD 2,769.25 per ounce as of 10:17 a.m ET (1417 GMT), after hitting a record high of USD 2,772.42 earlier in the session.

US gold futures settled 0.9% higher at USD 2,781.1.

Bullion thrives in a low interest-rate environment and is considered a hedge against market volatilities. Gold prices have surged more than 34% so far this year.

Gold is supported by safe-haven bets as geopolitical tensions and political uncertainty continue, with Japan now being added into the mix on the political uncertainty front after the weekend election, said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Republican former US President Donald Trump and Democratic Vice President Kamala Harris are also caught in a tight race for the White House.

On the geopolitical front, at least 93 Palestinians were killed or missing in an Israeli strike in northern Gaza, the Gaza health ministry said.

Investors await a series of economic data, including ADP employment, US Personal Consumption Expenditures, and payrolls report to further gauge the Fed’s policy stance, with its next rate decision on Nov. 7.

Markets are currently pricing in a 98% chance for a 25-basis-point rate cut by the Fed in November.

“Gold should retain its upward bias and may even flirt with $2,800 in the days ahead, as long as U.S. election risks continue weighing on market sentiment, while Fed rate cut expectations remain intact,” said Han Tan, chief market analyst at Exinity Group.

Gold prices’ rally is set to extend into 2025, as a favourable U.S. interest rate backdrop and geopolitical tensions continue to burnish its appeal, a Reuters poll showed.

However, buyers in India brushed off record high prices, making purchases for the Dhanteras and Diwali festivals.

Spot silver rose 1.9% to USD 34.32 per ounce. Platinum rose 1.6% to USD 1,049.10. Palladium rose 0.2% to USD 1,221.00, after hitting a 10-month high on sanction concerns on top producer Russia.

(Reporting by Anjana Anil and Anushree Mukherjee in Bengaluru; Additional reporting by Sherin Varghese, Editing by Shilpi Majumdar and Shailesh Kuber)

Yen remains under pressure after Japan election

NEW YORK – The yen hit three-month lows against the dollar on Monday, remaining under pressure as an election loss by Japan’s ruling coalition raises political and monetary policy uncertainty, while the US dollar headed for its biggest monthly gain since April 2022.

The dollar rose by as much as 1% to a high of 153.88, the yen’s weakest level since late July. The yen was last down about 0.7% on the dollar at 153.34, bringing the decline in October to 6.4%, the largest of any G10 currency.

“The yen has been the most volatile major currency this year, and a surprise election result has added to this uncertainty around monetary policy and fiscal policy going forward,” said Adam Button, chief currency analyst, ForexLive, Toronto.

“Once again, the reaction is to sell a bit of the yen. It is fresh in the mind of investors how the LDP leadership election caused the volatility to quickly unwound. So, it’s a difficult one to take a side on.”

A period of wrangling to secure a coalition is likely after Japan’s Liberal Democratic Party and its junior partner Komeito won 215 lower house seats to fall short of the 233 majority.

Traders said the vote would likely result in a government without the political capital to preside over rising rates and could usher in another era of revolving-door leadership.

Shigeru Ishiba was Japan’s fourth prime minister in a little over four years, and further instability was widely expected to breed caution at the central bank, which meets to set rates this week.

Analysts at BNY said the next immediate target for dollar/yen would be 155 with 160 a likely line in the sand that would draw intervention from the finance ministry.

Dollar gains

Elsewhere, the dollar headed for its largest monthly rise in two and a half years against a basket of major currencies, driven by signs of strength in the US economy. Bets on Donald Trump winning the presidency have also lifted US yields in anticipation of policies that could delay interest rate cuts.

The U.S. dollar index has climbed 3.6% to 104.46 during October, its sharpest monthly rise since April 2022. It eased down 0.07% to 104.31.

Most analysts argued that markets are increasingly pricing in a Republican sweep, with Trump winning the presidency and his party controlling both chambers of Congress.

The euro, meanwhile, rose 0.15% to USD 1.0813, but was still down nearly 3% on the month.

Analysts said the single currency could drop further if the US enacts a global baseline tariff, in addition to higher duties on China, and other countries retaliate. Much of the move would come from higher US policy rates in response to the inflationary impact of tariffs.

Traders are also upping their bets that the European Central Bank could cut rates more aggressively, which is also weighing on the euro.

Investors are now focusing on the US October employment report this week, which is likely to be affected by a strike at Boeing and two hurricanes that hit the US Southeast.

The week ahead also includes inflation readings for Europe and Australia, gross domestic product data in the US and purchasing managers’ indexes for China.

“The market will be looking quite closely for more signs into what’s happening in December. (It’s) going to be listening to what the reaction is to the stronger non-farm payrolls numbers. It comes down to the Fed’s reaction function,” said Peter Vassallo, FX portfolio manager at BNP Paribas Asset Management in Boston.

He cautioned that with one week to go before the US election, a calm day like Monday may not be the norm, as “some uncorrelated and wild moves is also possible” if economic data surprises this week and the lack of liquidity exaggerates market moves.

(Reporting by Laura Matthews in New York; additional reporting by Tom Westbrook and Stefano Rebaudo; Editing by Sharon Singleton and Nick Zieminski)

Wall Street closes higher ahead of megacap earnings, election

Wall Street closed higher on Monday ahead of a packed week of earnings from megacap companies and the final stretch before the Nov. 5 presidential election, while sentiment improved after energy supplies were not disrupted by weekend developments in the Middle East.

Israel’s response over the weekend to an Iranian missile attack this month focused, so far, on missile factories and other sites near Tehran, rather than on refineries or nuclear targets.

Wall Street was focused on the week ahead, notably corporate results, with around 169 S&P 500 companies scheduled to report through the week.

That includes the bulk of the “Magnificent Seven” group of megacap technology stocks that have driven Wall Street to all-time highs. Alphabet, Meta Platforms and Apple rose ahead of results this week.

The S&P 500 gained 15.4 points, or 0.27%, to 5,823.52, while the Nasdaq Composite gained 48.58 points, or 0.26%, to 18,567.19. The Dow Jones Industrial Average rose 273.17 points, or 0.65%, to 42,387.57

Last week, Nvidia surpassed Apple as the world’s most valuable company. Investors will look out for AI spending guidance in tech earnings this week.

“The earnings will be important for the guidance that the companies give as to what sort of capital expenditure programs they may implement in the coming year,” said Paul Christopher, head of Global Investment Strategy at Wells Fargo Investment Institute.

Microsoft and Amazon.com also report earnings this week.

The small-cap Russell 2000 jumped 1.63% today, outperforming major indexes.

“This could be the market looking ahead to a soft landing and expecting small caps to be first out of the gate as they typically are,” Christopher said. “It could also be some element related to the Trump trade but it’s very difficult to disentangle those two.”

The energy sector fell 0.65% as crude prices plunged 5% on easing supply worries, while financial company shares led sectoral gains.

Advancing issues outnumbered decliners by a 1.88-to-1 ratio on the NYSE. There were 147 new highs and 41 new lows on the NYSE.

The S&P 500 posted 15 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 101 new highs and 67 new lows.

Economic data due this week will be crucial for assessment of Federal Reserve policy, most notably Thursday’s Personal Consumption Expenditure Price Index, the Fed’s preferred inflation gauge.

Focus will also be on the U.S. presidential election, with markets more broadly pricing in a second Donald Trump administration, though the election is expected to be close.

Boeing’s shares dipped 2.8% after the plane maker launched a stock offering that could raise up to USD 22 billion in a bid to shore up its finances amid an ongoing worker strike.

Industrial conglomerate 3M jumped 4.4%, giving a boost to the Dow, after JP Morgan hiked its price target on the company’s shares.

(Reporting by Abigail Summerville in New York; Editing by David Gregorio)

Oil falls 6% on reduced risk of wider Middle East war

HOUSTON – Oil prices tumbled 6% on Monday, or more than USD 4 a barrel, after Saturday’s retaliatory strike by Israel against Iran’s military bypassed oil and nuclear facilities, not disrupting energy supplies.

Brent futures LCOc1 settled at USD 71.42 a barrel, down USD 4.63 or 6.09%. WTI US crude futures CLc1 finished at USD 67.38 a barrel, $4.40 or 6.13%.

Both Brent and US West Texas Intermediate crude futures hit their lowest since Oct. 1 at the open.

“Obviously, this is a perfect example of a headline-driven market,” said Phil Flynn, senior analyst at Price Futures Group. “We still have a lot of geopolitical risk.”

Last week, the benchmarks gained 4% in volatile trade on uncertainty over the looming US election and the extent of Israel’s expected response to the Iranian missile attack of Oct. 1.

On Saturday, scores of Israeli jets completed three waves of strikes before dawn against missile factories and other sites near Tehran and in western Iran, the latest exchange between the Middle Eastern rivals.

The attacks were more tailored toward military targets, easing fears that Israel might attack Iran’s nuclear facilities or oil infrastructure.

Citi lowered its Brent price target for the next three months to USD 70 a barrel from USD 74, factoring in a lower risk premium in the near term, analysts led by Max Layton said in a note.

The Organization of the Petroleum Exporting Countries and its allies in OPEC+ kept oil output policy unchanged last month, including a plan to start raising output from December. The group will meet on Dec. 1 ahead of a full meeting of OPEC+.

Tudor, Pickering Holt analyst Matt Portillo said WTI could trade much lower in the coming year.

“Absent a flare-up in the Middle East, our base case for WTI in 2025 remains USD 65 a barrel, with a bias lower if OPEC+ doesn’t show significant constraint on returning volumes to the market,” Portillo said.

Tensions remain high following the attack, however, and Iran will “use all available tools” to respond to Israel’s weekend attack, Iranian Foreign Ministry spokesperson Esmaeil Baghaei said on Monday.

(Reporting by Erwin Seba; Additional reporting by Arunima Kumar, Robert Harvey in London, Florence Tan and Jeslyn Lerh in Singapore; Editing by David Evans, David Holmes and David Gregorio)

Indian central bank chief says inflation moderating, but upside risks require vigilance

WASHINGTON – Reserve Bank of India Governor Shaktikanta Das said on Friday the country’s inflation is moderating, but the central bank will be vigilant to risks of an overshoot from unexpected weather-related and geopolitical events.

India’s economy is expanding at a solid clip with the balance of growth and inflation “well-poised,” Das said in an event hosted by the Peterson Institute for International Economics in Washington.

The economy’s resilience has given India’s central bank scope to focus on taming inflation and keeping it around its 4% target, said Das, who spoke as finance chiefs were meeting in Washington for the International Monetary Fund and World Bank annual meetings.

While the central bank sets a 2% band both up and down around its 4% inflation target, it strives to align inflation to 4% and keep it “as close as possible” to the target, he said.

“Inflation is moderating in India. But we can’t take it for granted” due to upside risks that could arise from unexpected weather that affects crops, geopolitical events and supply bottlenecks, he said.

“Overall, the financial sector remains sound and resilient,” he said. “But we are certainly not complacent amid a rapidly changing environment.”

(Reporting by Leika Kihara; Editing by Paul Simao)

Most Asian central banks have room to cut rates, IMF official says

WASHINGTON – Most Asian central banks have room to cut interest rates, as the start of the Us monetary easing cycle reduces fears of an unwelcome weakening of their currencies, a senior International Monetary Fund official said on Thursday.

But Krishna Srinivasan, the director of the IMF’s Asia and Pacific Department, said risks to Asia’s economic outlook were tilted to the downside on tentative signs that global demand could weaken.

“No one wins from trade fragmentation. We all pay for slow global growth,” particularly in Asia where many countries are integrated in global supply chains, he told a press briefing during the IMF and World Bank annual meetings in Washington.

The IMF expects Asia’s economies to expand 4.6% in 2024 and 4.4% in 2025, remaining “the world’s engine of growth,” Srinivasan said.

Asia has also brought inflation down to low and stable rates faster than other regions, he said. “In emerging Asia, the disinflation process is actually complete.”

While some Asian central banks may have been reluctant to ease monetary policy before the Federal Reserve for fear of weakening their currencies, such concerns should have disappeared now that the US central bank has started cutting rates, he said.

But the environment could become tougher for Asia due to slowing US economic growth and weakening demand in China.

“Risks to the outlook are now relatively to the downside,” Srinivasan said. “Moreover, countries across the globe continue to implement trade restrictions at a rapid pace,” which could weigh on trade-reliant Asian economies, he added.

While Asian countries have the scope to ease monetary policy, their increasing public debt leaves many of them with less of an ability to loosen fiscal policy, he said.

“For most Asian countries, it’s time to start budgetary consolidation in earnest,” Srinivasan said.

(Reporting by Leika Kihara; Editing by Paul Simao)

Nasdaq, S&P end higher as Tesla jumps, yields pull back

Oct 24 (Reuters) – The Nasdaq and the S&P 500 gained on Thursday, driven by Tesla’s positive earnings forecast and a decline in Treasury yields from a three-month high, which buoyed market sentiment despite declines from some corporate results.

Shares of Tesla soared, with the EV-maker set to add more than USD 140 billion to its market capitalization, after it reported robust third-quarter profits and surprised investors with a prediction of 20% to 30% sales growth next year.

This helped take the Consumer Discretionary sector higher.

“It was a blowout from the perspective of Tesla,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

The benchmark S&P posted its first daily gain this week. However, sentiment was somewhat shaky. Most of the S&P sectors were in the red, as other earnings reports and pressure from lower, but still high Treasury yields weighed.

The yield on the benchmark 10-year Treasury note eased on the day, at 4.20%, after reaching a three-month high the day before. It went as high as 4.26% in Wednesday’s session, which saw all three major equity indexes lose ground.

“In the near term, the greatest influence we’ve seen in stocks in October has been the move higher in rates. From a 10-year Treasury below 4% to where we stand now has been relatively quickly,” said Bill Northey, senior investment director at US Bank Wealth Management.

Earnings announced before the bell include IBM, which lost after missing third-quarter revenue estimates, while Honeywell declined after it forecast annual sales below estimates, with both weighing on the blue-chip Dow.

According to preliminary data, the S&P 500 gained 11.84 points, or 0.20%, to end at 5,809.26 points, while the Nasdaq Composite gained 135.93 points, or 0.76%, to 18,415.35. The Dow Jones Industrial Average fell 145.56 points, or 0.34%, to 42,369.39.

Materials dropped, dragged down by Newmont as higher costs and weaker Nevada output saw it miss profit estimates.

Boeing also lost after factory workers voted on Wednesday to reject a contract offer and continue a more than five-week-long strike.

Stocks have eased from record levels over the past few sessions due to a reassessment of bets on the Federal Reserve’s rate cuts, rising Treasury yields, corporate earnings and uncertainty surrounding the upcoming US election.

The pullback, however, was to be expected, Dennis Dick, trader at Triple D Trading said. “The story is still in tech, and that story is not going away, I would still say dips in tech need to be bought.”

Southwest Airlines lost after earnings and after the company reached an agreement with activist investor Elliott Investment Management.

On a brighter note, UPS added after the parcel service provider reported a rise in third-quarter profit, on rebounding volumes and cost cuts.

Of the 159 companies in the S&P 500 that have reported results this earnings season, 78.6% have beaten analyst expectations, according to data compiled by LSEG.

On the economic front, S&P Global’s flash PMI data showed U.S. business activity increased in October, amid strong demand. Weekly jobless claims also fell unexpectedly for the week ended Oct. 19.

(Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Saumyadeb Chakrabarty, Pooja Desai and Aurora Ellis)

Oil prices ease on possible new Middle East ceasefire talks

NEW YORK – Oil prices eased about 1% in volatile trade on Thursday on reports the US and Israel will try to restart talks on a possible ceasefire in Gaza.

Brent futures LCOc1 settled 58 cents, or 0.8%, lower at $74.38 a barrel, while US West Texas Intermediate crude (WTI) CLc1 slipped 58 cents, or 0.8%, to end at $70.19.

Earlier in the session, both benchmarks traded up over $1 a barrel on concerns the ongoing conflict in the Middle East could result in oil supply disruptions and from uncertainty ahead of the US presidential election on Nov. 5.

“(The) energy complex continues to zig and zag as Middle East risk premium expands and contracts almost daily,” analysts at energy advisory firm Ritterbusch and Associates said in a note.

After Iran fired missiles at Israel on Oct. 1, Brent crude surged about 8% during the week ended Oct. 4 on worries Israel would attack Iran’s oil infrastructure. It fell about 8% in the week ended Oct. 18 on reports Israel would not hit energy infrastructure, easing fears of supply disruptions.

Iran is a member of the Organization of the Petroleum Exporting Countries and produced about 4 million barrels per day (bpd) of oil in 2023, US Energy Information Administration data showed.

Iran was on track to export around 1.5 million bpd in 2024, up from an estimated 1.4 million bpd in 2023, according to analysts and US government reports.

Iran backs several groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen.

With the fast-approaching U.S. presidential election, which could alter US Middle East and oil policy, President Joe Biden’s administration continued to push for peace between Israel and Hezbollah and Hamas.

“(Former President Donald) Trump is leading over (Vice President Kamala) Harris based on current data from betting markets and Trump has proposed making the U.S. a major oil supplier,” said OANDA senior market analyst Kelvin Wong, adding that such a move could depress prices.

While betting markets put Trump ahead, other polls show the result is too close to call.

Demand worries

In Europe, Euro zone business activity stalled again this month, remaining in contractionary territory as demand from both home and abroad fell despite firms barely increasing their prices, a survey showed on Thursday.

In the UK, optimism among British firms has sunk, according to two surveys published on Thursday, six days before finance minister Rachel Reeves tries to chart a way between raising taxes and boosting growth in the new government’s first budget.

In the U.S., new applications for U.S. unemployment aid unexpectedly fell last week, but the number of people collecting benefits in mid-October was the highest in nearly three years, indicating it was becoming harder for those losing jobs to land new positions.

(Reporting by Scott DiSavino in New York, Paul Carsten in London, Arathy Somasekhar in Houston and Trixie Yap in Singapore; Editing by David Goodman, Elaine Hardcastle and Susan Fenton)

BRICS leaders tout joint finance, trade projects at Russian summit

KAZAN, Russia – Leaders of the nations in the BRICS grouping, which accounts for 37% of global economic output, predicted its influence would grow as they met in Russia on Tuesday, outlining common projects ranging from a grain exchange to a cross-border payments system.

Russia’s President Vladimir Putin, who has sought support from BRICS leaders amid his standoff with the West over the war in Ukraine, said that BRICS’ average economic growth in 2024/25 would be 3.8%, compared to global growth of 3.2-3.3%.

“The trend for the BRICS’ leading role in the global economy will only strengthen,” Putin said, citing population growth, urbanization, capital accumulation, and productivity growth as key factors.

The joint communique of the summit, called the Kazan Declaration, attacked unilateral sanctions imposed on some of the group’s members, including Russia and Iran, saying that they harm the poorest people in targeted states.

“Therefore, we call for their elimination,” the Kazan Declaration said.

Russia, the world’s biggest wheat exporter, proposed the creation of a BRICS grain exchange which could later be expanded to trade other major commodities such as oil, gas and metals. The Kazan Declaration welcomed the initiative.

“BRICS countries are among the world’s largest producers of grains, legumes, and oilseeds. In this regard, we proposed opening a BRICS grain exchange,” Putin told the leaders.

Cross border payments

He added that the exchange “will contribute to the formation of fair and predictable price indicators for products and raw materials, considering its special role in ensuring food security”.

“The implementation of this initiative will help protect national markets from negative external interference, speculation, and attempts to create an artificial food shortage,” Putin said.

Kremlin spokesman Dmitry Peskov, asked why the declaration paid relatively little attention to the Ukraine conflict, told Russian radio that Ukraine was not the central issue for BRICS.

“This is an important question for Russia’s agenda but it is far from being the central issue for BRICS. And to the extent that it should figure on the BRICS agenda, this was reflected.”

Ukraine’s Foreign Ministry said the declaration showed Russia had been unable to impose on other participants its view of the war in Ukraine.

Other leaders backed the creation of a common cross-border payments system, which would help BRICS countries trade with each other, bypassing the dollar-dominated global financial system.

Brazilian President Luiz Inacio Lula da Silva, who took part in the BRICS summit via video conference after a head injury over the weekend, said that it is time for the BRICS nations to create alternative payment methods.

He added that the group’s New Development Bank (NDB) was designed as an alternative to what he called failing Bretton Woods institutions such as the International Monetary Fund (IMF).

Local currencies

India’s Prime Minister Narendra Modi said that he welcomed the steps for financial integration of BRICS countries while China’s President Xi Jinping urged BRICS countries to deepen financial and economic cooperation.

The Kazan Declaration called for a feasibility study on the other Russian initiatives, a BRICS Clear depositary and securities trade settlement system and a common reinsurance company.

In his speech, Putin also called for the creation of a BRICS investment platform, which will facilitate mutual investment between BRICS countries and could also be used for investment in other countries in the Global South.

Contrary to earlier statements from senior Russian officials on the need to find an alternative to the International Monetary Fund (IMF), the Kazan Declaration enhanced the role of the IMF, stressing the need for further reforms.

The declaration did not mention global dollar dominance, an issue that was often raised during the Russian presidency, nor a BRICS single currency and the use of cryptocurrencies, mentioned by Russia as a way to protect trade from Western sanctions.

“We welcome the use of local currencies in financial transactions between BRICS countries and their trading partners,” the Kazan Declaration said.

(Reporting by Vladimir Soldatkin in Kazan, Gleb Bryanski in Moscow; Editing by Alison Williams, Emelia Sithole-Matarise, Philippa Fletcher, Alexandra Hudson and Daniel Wallis)

South Korea’s economy barely grows in third quarter, missing expectations

SEOUL – South Korea’s economy barely grew in the third quarter, missing market expectations, as consumer spending rebounded but exports fell.

In the July-September quarter, gross domestic product expanded 0.1% from a quarter earlier on a seasonally adjusted basis, according to the Bank of Korea’s advance estimates released on Thursday.

That was just enough for Asia’s fourth-largest economy to avoid a recession, commonly defined as two consecutive quarters of contraction, after the economy contracted 0.2% in the second quarter.

The growth rate was far weaker than an increase of 0.5% tipped in a Reuters poll of economists and expected by the central bank in its quarterly forecasts provided in August.

Private consumption rose 0.5%, after falling 0.2% a quarter earlier. Construction investment dropped 2.8%, while corporate investment jumped 6.9%.

Exports, down 0.4%, fell for the first time since the final quarter of 2022, while imports rose 1.5%, bringing a net negative contribution.

South Korea’s central bank this month lowered interest rates for the first time since mid-2020 and flagged there was room for more reductions though it said the timing of any further easing would be carefully examined.

On an annual basis, the economy grew 1.5%, weaker than the previous quarter’s 2.3% and economists’ expectations of 2.0%. It was the slowest pace since the third quarter of 2023.

(Reporting by Jihoon Lee; Editing by Tom Hogue and Jamie Freed)

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