HL commentary as it happens

US President Donald Trump's plans to accrue critical minerals helped niche mining stocks

Yesterday’s news that US President Donald Trump plans to invest $12bn accruing critical minerals helped niche mining stocks – with many up double digits in trading. The President is keen to break the US dependence on China for critical minerals, a key factor in recent trade negotiations. China dominates critical minerals supply chains, not just across Asia, but Africa and South America too – buying up mines, trading routes and manufacturing over many years. It is estimated that China has more than 90% of the refining capabilities for critical minerals – placing it in a position of power for any nation or company looking to produce chips, electric vehicles, aid the energy transition, build high tech military equipment – the list goes on.

Mixed start for FTSE 100

It’s a mixed start for the FTSE 100 – a hangover from tech stock worries causing market wobbles yesterday. Markets seemed concerned that rather than increase profitability, AI growth will force the commoditisation of services, squeezing margins. The NASDAQ fell 1.43% as a result on Tuesday, and the S&P 500 was down 0.84%. This negativity has continued into today’s trading for tech sectors across Asia and Europe.

The oil price has fallen on news that the US is in talks with Iran in a bid to ease tensions in the Middle East

News that the US is in talks with Iran has also benefited stocks – in anticipation that US support will be able to bring an end to Iran’s war with Israel. The oil price has fallen as a result.

Donald Trump has announced plans to cut India trade tariffs from 50% to 18%, buoying stock markets

Asia markets have been driven higher by positive news of a deal between US President, Donald Trump, and Indian Prime Minister, Narendra Modi. Trump announced plans on social media that he would be cutting India trade tariffs from 50% to 18%, buoying stock markets. The 50% tariff was an aggregate of 25% base tariffs plus an additional punitive measure as India had been buying oil from Russia.

Gold has rebounded to start the week, as speculators look to take advantage of last week’s slump

Gold rose more than 4% yesterday as speculators look to take advantage of last week’s slump. It has been a rollercoaster start to the year for both gold and silver, with gold rising near 30% to $5,500 on 29th January driven by concerns about global geopolitics, US Fed independence and President Donald Trump’s endorsement of the weak dollar. Following the rumours that rate hawk, Kevin Warsh, had received the Presidential nomination to be the next Federal Reserve Chair, the US dollar rose in value, sparking a considerable sell off in gold. The market is reading Warsh’s nomination as a sign of rate stability – and potentially a higher for longer stance, based on his voting record. We consider his recent rhetoric to be more informing. He has spoken publicly against current levels, saying that rates should be lower, which is more in tune with Trump’s beliefs, hence the nomination.

FTSE 100 nudges up in early trade

The FTSE 100 is in positive territory this morning, led by rises across the mining sector. This market report is at risk of becoming a gold bug’s blog as, once again, the precious metal dominates investment flows.

Iran de-escalation releases pressure on oil prices.

Brent Crude prices are down over 5% to around $65.6 per barrel after the White House and Tehran made positive noises about diplomacy. But the US Navy continues to maintain a high presence in the Middle-East, so the potential for tensions, and oil prices to ratchet up again remains a possibility.

US stock futures weak as inflation fear returns.

Futures for all the major US indices are pointing downwards this morning. Friday’s non-farm payroll print is the key economic data point to focus on after the tail end of last week revealed a month-on-month increase in producer prices of 0.5%, higher than forecast and the biggest increase in five months. Forecasters are expecting the addition of 70,000 hires, an acceleration from 50,000. A significantly higher number has the potential to dampen expectations of further rate cuts by the Fed and take the steam out of equity markets.

Rate decisions ahead in UK, EU and down under.

It's a big week for central bank meetings, with the Reserve Bank of Australia first up and expected to buck the prevailing trend with a rate rise to 3.85% following higher than expected inflation and strong employment data. Closer to home markets aren’t expecting any change to lending costs at the European Central Bank (now at 2.0%) or the Bank of England (3.75%). But with UK unemployment at a four-year high of 5.1%, jobseekers will be hoping that Andrew Bailey’s comments will set the scene for further reductions in the base rate.

Metal prices continue to fall

Mining stocks are likely to feel the heat as metal prices scramble to find a floor. Oil prices are also trending the wrong way for investors in commodity-focused companies. The silver bubble well and truly popped on Friday after lenders upped their margin calls to speculators. That followed Donald Trump’s nomination of Kevin Warsh, one of the more hawkish contenders in the race, for the top job at the Federal Reserve bank.

There’s no sign of a silver lining this morning either, with another double-digit decline showing on traders’ screens. Gold is following a similar but far less pronounced pattern. In industrial metals, Copper has also seen a flight of speculative funds, although here, the long-term demand runway combined with limited new production set to come on stream should provide some support.

Oil prices head for best month in over two years

Brent Crude prices slipped slightly lower on Friday morning to $68 per barrel. But the black stuff remains on track to record its best monthly gains since July 2023, amid rising geopolitical tensions in both Venezuela and Iran. US President Donald Trump has called for Iran to engage in nuclear talks, while Iran has threatened retaliation. If this spills over into military conflict, it could put further upward pressure on oil prices, not only to over 3 million barrels of daily oil production, but also disruption to tankers carrying oil and Liquid Natural Gas through the Strait of Hormuz.

Gold on track for best month since the 1980s

Gold prices have slid more than 5% this morning to around $5,150 per ounce, as investors look to take some profits. Still, the yellow metal remains on track for a monthly gain of over 20% - its strongest performance since the 1980s. Not bad for an asset that has little to no real-world utility and produces nothing, unlike farmland or businesses that can produce food, goods and cash.

FTSE marginally up as US futures slip lower

The FTSE 100 opened marginally up this morning, but there was little in the way of big UK stock news to nudge it majorly in either direction. With earnings season now in full swing, US stock futures slipped lower as software names continue to lose ground over fears that AI will disrupt their businesses.