Crypto Hedging Intensifies After Historic Liquidation, As Traders Brace for More Volatility

Silver prices touched an all-time high near US$53 (RM224) an ounce, as a historic short squeeze in London added momentum to a rally that’s been fuelled by surging demand for safe-haven assets.Spot prices rose as much as 1% to US$52.8983 an ounce in London, surpassing a peak set in January 1980 on a now-defunct contract overseen by the Chicago Board of Trade — when the billionaire Hunt brothers attempted to corner the market. Gold also climbed to another record high, building on eight straight weeks of gains.

Concerns about a lack of liquidity in London have sparked a worldwide hunt for silver, with benchmark prices soaring to near-unprecedented levels over New York. That’s prompting some traders to book cargo slots on transatlantic flights for silver bars — an expensive mode of transport typically reserved for gold — to profit off higher prices in London. The premium was at about US$1.15 an ounce in early trading on Tuesday — down from a spread of US$3 last week.

Silver lease rates — which represent the annualised cost of borrowing metal in the London market — have been persistently high this year, but surged to more than 30% on a one-month basis on Friday. That’s creating eye-watering costs for those looking to roll over short positions. A jump in demand from India in recent weeks has drawn down the supply of available bars to trade in London, following a rush to ship metal to New York earlier this year after worries that the metal could be hit with US tariffs sparked large dislocations between the two trading hubs.

While precious metals were officially exempt from levies in April, traders remain on edge ahead of the conclusion of the US administration’s so-called Section 232 probe into critical minerals — which includes silver, as well as platinum and palladium. The investigation has revived fears the metals could be swept up in new tariffs, exacerbating market tightness.

The silver market “is less liquid and roughly nine times smaller than gold’s, amplifying price moves,” Goldman Sachs Group Inc analysts wrote in a note. “Without a central bank bid to anchor silver prices, even a temporary pullback in investment flows could trigger a disproportionate correction, as it would also unwind the London tightness that drove much of the recent rally.”

The four main precious metals have surged between 56% and 81% this year, in a rally that’s dominated commodity markets. Gold’s advance has been underpinned by central-bank buying, rising holdings in exchange-traded funds, and rate cuts by the Federal Reserve. Demand for havens has also been aided by recurrent US-China trade tensions, threats to the Fed’s independence, and a US government shutdown.

“There seems to be no good reason to fight the trends in both gold and silver,” said Shyam Devani, an investor in Singapore. “It has become clearer the trends have accelerated, and are likely to continue because the underlying issues of weak governments, poor budgetary positions, confusion on monetary policies all conspire to push up both gold and silver higher.”On Monday analysts at Bank of America Corp hiked their end-of-2026 price target for silver from around US$44 an ounce to US$65, citing persistent market deficits, elevated fiscal gaps and lower interest rates.

Investors were also weighing the outlook for the Fed’s monetary easing path ahead of the central bank’s next interest-rate decision later this month. Philadelphia’s Fed Bank President Anna Paulson on Monday signalled she favours two more quarter-point cuts this year as policy should look through the impact of tariffs in consumer price increases. Lower borrowing costs then to benefit precious metals, which don’t pay interest.Spot gold was up 0.7% at US$4,140.82 an ounce at 10.04am in Singapore, after climbing 2.3% on Monday. The Bloomberg Dollar Spot Index was flat, after gaining about 1% last week. Silver was up 0.9%, while platinum and palladium jumped.

Source: Theedgemarkets

Trump Takes Victory Lap After Gaza Peace Deal

The Challenges of Broader Peace in the Middle East

Diplomatic Strain with Erdogan and Future Challenges

The Road Ahead: From Ceasefire to Implementation

Facing the Next Challenge: Ukraine and Russia

Source: Bloomberg

U.S. President Donald Trump remains on track to meet Chinese leader Xi Jinping in South Korea in late October as the two sides try to de-escalate tensions over tariff threats and export controls, U.S. Treasury Secretary Scott Bessent said on Monday.The latest rupture followed China's announcement on Thursday that it would dramatically expand its rare earths export controls. That drew a sharp countermeasure from Trump on Friday that sent markets and relations between the world's two largest economies into a spiral.

Bessent said there were substantial communications between the two sides over the weekend and more meetings were expected."We have substantially de-escalated," Bessent said in an interview with Fox Business Network."President Trump said that the tariffs would not go into effect until November 1. He will be meeting with Party Chair Xi in Korea. I believe that meeting will still be on."Trump and Xi had planned to meet during the summit of the Asia-Pacific Economic Cooperation forum hosted by South Korea in late October.

China's Commerce Ministry on Tuesday said it had informed the U.S. in advance it planned to tighten its rare earth controls, and confirmed that the two sides remain in communication, adding that a working-level meeting took place on Monday.But the statement from a Commerce Ministry spokesperson warned "the U.S. cannot ask for talks while simultaneously threatening new restrictive measures."Asian stocks made a tentative rebound in early trade on Tuesday, after Wall Street's main indexes ended as much as 2.2% higher on Monday, following Bessent's signal that trade negotiations between the two superpowers remain on track.

Trump's threat on Friday sparked a big sell-off at a time when investors and top policymakers were already growing anxious about a frothy stock market fueled by an investment boom in artificial intelligence that some officials fear could hurt future employment.Bessent said there would be U.S.-China staff-level meetings this week in Washington on the sidelines of the World Bank and International Monetary Fund annual gatherings."The 100% tariff does not have to happen," Bessent said. "The relationship, despite this announcement last week, is good. Lines of communication have reopened, so we'll see where it goes."

US PUSHBACK AGGRESSIVE

Still, Bessent called the China move provocative and said the U.S. pushed back aggressively.The United States has been in contact with allies and expects support from the Europeans, India and democracies in Asia, he said."China is a command-and-control economy. They are neither going to command nor control us," Bessent said.China blamed the United States for the rising trade tensions on Sunday and called Trump's latest threatened tariffs of 100% on Chinese goods hypocritical. It defended its curbs on exports of rare earth elements and equipment. China dominates the market for such elements, which are essential to tech manufacturing.

Under China's new regulations, foreign companies producing some of the rare earths and related magnets on the list will now also need a Chinese export license if the final product contains or is made with Chinese equipment or material. This applies even if the transaction includes no Chinese companies.The United States would reject licensing requirements from China, Bessent said in the interview on "Mornings with Maria."

Source: Yahoo Finance

Stronger-Than-Expected Q3 Growth Masks Signs of Cooling Momentum

Manufacturing Falters as Services and Construction Lose Steam

MAS Holds Policy Steady Amid Signs of Normalization

Exports Continue to Decline Amid Weak External Demand

A Gradual Return to Trend Growth

Source: CNBC

Tata Electronics has acquired Chinese industrial firm Justech Precision's India unit for close to $100 million, according to two people familiar with the matter, as the Tata Group subsidiary bolsters its manufacturing capacity to benefit from Apple's focus on iPhone manufacturing in India.The transaction was concluded in August, with HSBC Bank and HDFC Bank advising on the deal, according to the people close to the deal.Headquartered in the city of Kunshan in Jiangsu, China, Justech Precision has been a supplier to Apple since 2008. It provides industrial equipment, such as computer numerical control machines used for precise cutting and fabrication tasks, to Foxconn, the world's largest assembler of Apple products.

Justech Precision Industry India, incorporated in late 2019 and based in the southern Indian state of Tamil Nadu did not respond to CNBC's requests for comments, neither did Tata Group. Tata Electronics declined to comment.In January, Tata Electronics reportedly bought a 60% stake in Taiwanese contract manufacturer Pegatron's India operation that operates an iPhone plant, Reuters reported. The deal's value was not disclosed.

The acquisitions come as Tata Electronics, which began assembling iPhones in India in 2023, seeks to expand its manufacturing capacity as Apple reportedly plans to source all of the iPhones for the U.S. market from India by the end of 2026.Apple, which still manufacturers most of its smartphones in China, has been taking urgent steps to build capacity in India with contract manufacturers Tata Electronics and Foxconn, pivoting away from China amid higher tariffs and geopolitical tensions.

Foxconn still accounts for two-thirds of India's total iPhones shipments, with Tata making the remaining one-third, according to Neil Shah, co-founder and vice president at market research firm Counterpoint Research, who expects that market share could change soon as Tata scales up its manufacturing.Tata currently operates two plants in the southern Indian state of Tamil Nadu and one in neighboring Karnataka, which was formerly owned by Wistron.

Made in India by 2026

Apple started looking for manufacturing alternatives after the pandemic outbreak and subsequent lockdown in China disrupted output at its largest assembly plant. The heightened Beijing-Washington tensions and tariff hikes on Chinese imports into the U.S. this year have prompted Apple to accelerate the shift in production.

U.S. President Donald Trump initially slapped prohibitive triple-digit tariffs on imports from China before granting a temporary reprieve for smartphones shipments. Despite India also facing high tariffs from the U.S., iPhones made in India don't attract any duties as of now. Apple's shift in production to India instead of the U.S. has angered Trump, who in May threatened to impose a 25% tariff on iPhones.

Source: CNBC

Japan’s main opposition parties are likely to meet Tuesday as they weigh the possibility of rallying behind Yuichiro Tamaki as a unified candidate to take on ruling party leader Sanae Takaichi in a parliamentary vote to decide the prime minister.Following the shock collapse of the ruling coalition on Friday after an alliance lasting 26 years, the prospects for the ruling Liberal Democratic Party’s new leader Takaichi becoming premier have become increasingly murky.

The LDP has 196 seats in the more powerful lower house, the largest bloc, but if the three main opposition parties coalesce behind a single candidate they would have 210. That would be enough to secure the premiership, provided other parties outside the LDP don’t back Takaichi.Tamaki is the leader of the Democratic Party for the People, a small populist party that has grown quickly in popularity based on clear messaging and a promise to raise people’s take-home pay. With inflation topping voters’ list of concerns, the DPP’s strategy has resonated with households struggling with rising prices.

“I have the determination to become prime minister,” Tamaki said in a post on X last week. If he succeeded, that would be the first time the LDP was booted out of the government since 2009.There is also a precedent for multiple opposition parties unifying behind a single candidate to become premier despite the LDP having the biggest bloc in parliament. That happened in 1993, though the resulting government proved unstable, leading to the eventual return of the LDP to power.

Tamaki will need to win the backing of key opposition parties to stand a chance of victory and that will require overcoming differences on policy. There is a fair amount of common ground. The Constitutional Democratic Party, the Japan Innovation Party (Ishin) and the DPP agree on the need to help households cope with inflation. All fought the upper house election with pledges to reduce the sales tax temporarily, though their proposals differed.Tamaki has pointed to defense as a key issue that divides his party from the CDP, saying those differences must be overcome for any cooperation.

The CDP holds 148 seats in the lower house, the Japan Innovation Party (Ishin) has 35, and the DPP controls 27. Komeito, the party that bolted from the coalition on Friday, has 24. So if all four parties ended up collaborating on an administration, they would get just over the threshold of 233 seats to give them a majority of 234 seats.

“Neither a Takaichi government nor a Tamaki government is stable,” Pelham Smithers, managing director of UK-based Japan equity research firm Pelham Smithers Associates, wrote in a note. “Ironically, political turmoil is not a negative for the stock market, if anything, it is a positive. A political crisis basically forces the BOJ onto the sidelines, and in turn exacerbates the ‘behind the curve’ element,” he added.

As the opposition parties eye cooperation, Takaichi continues to lay the groundwork for the possibility of becoming prime minister. She is considering tapping main LDP rival and Agriculture Minister Shinjiro Koizumi as defense minister, and Chief Cabinet Secretary Yoshimasa Hayashi as internal affairs minister, according to the Yomiuri newspaper.

Source: Bloomberg Europe