VONNIE: IT IS 5:00 A. M. IN NEW YORK CITY.I AM VONNIE QUINN WITH YOUR "BLOOMBERG BRIEF." GLOBAL STOCKS HEADED FOR THEIR WORST WEEK SINCE APRIL. FED FRACTURES DEEPEN. GOVERNOR MICHAEL BARR JOINING THE CHORUS TO SIGNAL INFLATION CONCERNS.MORE FED SPEAK, PLUS PMI AND THE MICHIGAN CONSUMER INDEX DATA. PEACE POTENTIALLY, AT A COST. UKRAINIAN PRESIDENT ZELENSKIY AGREEING TO WORK ON A PEACE PLAN THAT WOULD GRANT KEY DEMANDS TO MOSCOW.WE ALL KNOW WHAT HAPPENED YESTERDAY. A MASSIVE REVERSAL. WE FIRST SAW THE LIFT TO ...

Gold Price Outlook - Gold prices are rallying due to expectations of US Federal Reserve rate cuts and increased gold buying from China [5][6] - Spot gold was trading at $4,096 with a daily gain of 2.34%, while MCX Gold December contract was up 2.07% at Rs 123,707 [5] - Analysts recommend buying the dip rather than chasing the rally, with short-term resistance expected around $4,160 [8][9] US Economic Context - The ongoing US government shutdown is expected to end soon, which has boosted risk appetite among investors [5][8] - Federal Reserve officials have differing views on interest rates, with some urging caution on further cuts due to potential inflation pressures [5][7] - The US Dollar Index was at 99.72, up 0.15% for the day, while US yields showed slight increases [5][7] China's Gold Market - China's gold consumption dropped 7.95% year-on-year to 682.73 tons in the January-September period [6] - The People's Bank of China has been buying gold for the 12th consecutive month, with official reserves increasing to 74.09 million ounces [6][7] - Domestic gold ETF holdings in China rose significantly, indicating strong local demand despite the overall consumption decline [7] Market Dynamics - Total known global gold ETF holdings increased to 97.24 million ounces, up 17.36% this year, although they have seen a decline over the past three weeks [7] - COMEX gold eligible inventory is at its lowest level since April, indicating tighter supply conditions [7] - Silver prices also surged, with MCX Silver December contract rising to Rs 153,650, suggesting strong performance in precious metals [8]

Core Insights - Oil prices remained stable amid bearish market sentiment following a U.S.-China trade truce, with Brent crude at $65.07/bbl and WTI at $60.92/bbl, reflecting slight declines from the previous week [1] Group 1: U.S. Sanctions and Indian Refiners - The Trump administration imposed new sanctions on Russian oil and gas companies Rosneft and Lukoil, coinciding with similar actions from the UK [2] - Indian refiners are increasingly avoiding Russian oil, opting for more expensive U.S. and Middle Eastern alternatives to mitigate risks associated with U.S. sanctions [2][3] - Over the past three years, India has benefited from discounted Russian crude, which was typically $8-$12 per barrel cheaper than Middle Eastern benchmarks, with imports peaking at approximately 1.75 million barrels per day [3] Group 2: Impact on Oil Imports and Prices - The share of Russian oil in India's import basket has decreased to 34% this year from 36% in the previous two years, while U.S. crude imports surged to 575,000 barrels per day in October, the highest in three years [4] - The sanctions have led to increased caution among banks regarding settlement channels, raising transaction risks for Indian refiners [4] - Following the sanctions, crude oil prices have risen sharply, raising concerns about supply tightness and inflation, which could negatively affect India's fiscal deficit and import bills [4] Group 3: Future Oil Price Trajectory - Commodity analysts at Standard Chartered suggest that the future trajectory of oil prices will depend on the volume of Russian oil removed from the market due to sanctions, with Rosneft and Lukoil having exported 1.9 million barrels per day over the past year [5]

Core Insights - Indian Oil Corp. plans to purchase 24 million barrels of crude oil from the Americas in Q1 of next year to compensate for lost Russian supply due to U.S. sanctions on Rosneft and Lukoil [1][2] - The company is seeking both high-sulfur and low-sulfur grades from sources including the United States, Canada, Brazil, and Latin America [2] - Indian Oil Corp. has recently acquired 2 million barrels of West African crude from Exxon, sourced from Angola and Nigeria [3] Industry Impact - The sanctions are increasing the import bill for Indian refiners as they transition to more expensive crude grades from non-Russian sources [4] - The share of Russian oil in India's total imports has decreased from 36% to 34%, while the average price for imported crude has risen by $5 per barrel over the Dubai benchmark [5] - U.S. crude imports have surged to 575,000 barrels daily, marking the highest level since 2022 [5] Price and Supply Concerns - Crude oil prices have sharply increased following new sanctions on Russian oil majors, raising concerns about supply tightness and inflation [6] - Elevated crude prices may exacerbate India's fiscal deficit and strain its import bill [6]

Key Insights - Global financial markets are responding to significant economic data and geopolitical events, particularly the rise in gold holdings by central banks and trade tensions involving the U.S. [2] Central Bank Gold Reserves - Gold has reached a 30-year high in global central bank reserves, now comprising over 20% of total reserves, indicating a shift away from reliance on fiat currencies like the U.S. dollar [3][4] - The accumulation of gold by central banks, especially in emerging markets, is driven by de-dollarization efforts, geopolitical fragmentation, and inflation concerns [4] Asian Markets - Hong Kong's Hang Seng Index is expected to open 2.5% higher, with the Hang Seng Automobile Index projected to rise by 3% [5] - The People's Bank of China injected 189 billion yuan through 7-day reverse repos at a steady interest rate of 1.40%, while draining a net 64.8 billion yuan through open market operations [6] Japanese Government Bonds - The yield on 10-year Japanese Government Bonds increased by 2.5 basis points to 1.650%, influenced by easing political uncertainty in Japan [7] U.S. Trade Policy - U.S. President Donald Trump announced plans to increase tariffs on Colombia due to drug trade tensions, cutting off subsidies to the nation [8][9]

Core Insights - Sales of new U.S. single-family homes increased by 0.6% in June to an annual rate of 627,000 units, falling short of expectations of 650,000 units [1] - Year-over-year, new home sales declined by 6.6% compared to June 2024, indicating ongoing challenges in the housing sector [2] - The inventory of unsold new homes reached 511,000 units, the highest since October 2007, leading to downward pressure on prices [6][7] Sales Performance - June sales rose to a seasonally adjusted annual rate of 627,000 units, a slight increase from May's unchanged figure of 623,000 units [1][2] - The annual decline of 6.6% in new home sales reflects persistent difficulties in the housing market [2] Mortgage Rates Impact - Elevated mortgage rates, with the 30-year fixed-rate mortgage remaining just below 7%, continue to hinder housing market activity [3] - The Federal Reserve's decision to pause rate cuts amid inflation concerns contributes to the high mortgage rates [3][4] Construction and Permits - New housing construction has slowed, with single-family homebuilding in June dropping to an 11-month low and permits for future construction at their lowest in over two years [5] Inventory and Pricing - The unsold inventory of new homes increased to 511,000 units, indicating a supply surplus that would take 9.8 months to deplete at the current sales pace [6] - The median price of a new home fell by 2.9% year-over-year to $401,800 in June, with builders increasingly cutting prices to attract buyers [7] Investment Focus - Homebuilding ETFs such as iShares US Home Construction ETF (ITB) and SPDR S&P Homebuilders ETF (XHB) are recommended for close tracking in light of current market conditions [8]