Gold prices held steady during Friday’s trading as the US dollar weakened against most major currencies and markets assessed the latest US inflation data.

Figures released today showed retail sales rising 0.5% month-on-month in July, in line with expectations, indicating resilient consumer spending in the US despite high tariffs.

A University of Michigan survey also revealed that US consumer sentiment fell to 58.6 points in August from 61.7 in July, marking its first decline in four months.

Government data yesterday showed the US producer price inflation index increasing 0.9% month-on-month in July, exceeding analysts’ forecasts of a 0.2% rise.

Similar US data earlier this week showed that the annual growth rate of the consumer price index remained steady at 2.7% in July, below expectations for an increase to 2.8%.

Core inflation — which excludes volatile food and energy prices — rose to 3.1% in July, above expectations of 3% and compared to 2.9% in June.

According to the FedWatch tool, investors now see a 99% probability of a 25 basis point interest rate cut by the Federal Reserve in September, compared to 94% yesterday and 57% a month ago.

Analysts also see a 61% chance of another 25 basis point cut in October, up from 34% a month ago, along with a 51% probability of a similar cut in December versus 25% a month ago.

Meanwhile, the US dollar index fell 0.4% to 97.8 at 20:02 GMT, after hitting a high of 98.2 and a low of 97.7.

In commodities trading, spot gold was steady in negative territory at $3,380.9 an ounce at 20:03 GMT, while US gold futures posted weekly losses of around 3%.

In the spring of 2024, the Belarusian government placed the Manalit radio components plant in the city of Vitebsk on the “Republican Honor Board” in recognition of “outstanding economic results.” This was the second year in a row the plant had received the award.

This recognition for Manalit — a Russian-owned plant located in Belarus — came at a time when it had become a critical supplier of high-reliability electronic components used in missiles, radars, and aircraft deployed by Russia in its war against Ukraine.

During the first two years of Russia’s full-scale invasion of Ukraine, which began in February 2022, Manalit’s annual profits increased nearly six-fold, driven almost entirely by military exports to Russia.

Manalit’s story mirrors that of many heavy industry plants in Belarus. Founded in the Soviet era as a major producer of ceramic capacitors, it faced a severe crisis in the 1990s with collapsing demand. By 2009, it was close to total liquidation.

In 2011, salvation and transformation came from its former competitor, the Kolon plant in St. Petersburg, Russia. Russian investors acquired a controlling 51% stake, effectively making Manalit an offshore production base for the Russian defense industry.

Capacitors Designed for War

Manalit specializes in producing ultra-durable multilayer ceramic capacitors approved for use in military and space applications.

In November 2020, plant director Alexander Shumakher told the state news agency BelTA, “Ninety-seven percent of our production serves the Russian defense industry.”

In 2024, Vitebsk regional executive committee head Alexander Subotsin stated that the plant was “operating systematically” and had achieved results over the past two years “that could not fail to please.”

These capacitors — such as the K10-84 series — are not intended for consumer electronics. They are used in missile guidance systems, radar arrays, electronic warfare units, and nuclear control systems, where failure could mean the loss of a mission or weapon.

A Sanctions Loophole

Western sanctions imposed on Russia in 2014 after the annexation of Ukraine’s Crimea cut off direct access to advanced Western electronics for military use.

Belarus, however, was not subject to these restrictions until 2022. For nearly eight years, Manalit exploited this gap, importing equipment and materials from Europe and the United States, then shipping the finished components to Russia to replace banned Western parts.

Even today, despite EU and US sanctions, Manalit can still buy production lines from Slovenia’s KEKO, equip them with Japanese Pro-face control panels (owned by France’s Schneider Electric), and continue sourcing precious metal powders from the US for capacitor manufacturing.

Evidence Among the Wreckage of War

According to a specialist from Ukraine’s Defence Intelligence Directorate (HUR), K10-84 capacitors produced by Manalit have been found in Russian Iskander ballistic missiles, Kalibr cruise missiles, air-launched Kh-101 cruise missiles, S-200 and S-300 air defense missiles, and Zoopark counter-battery radars.

“In the Kh-101 missile’s air pressure system, all capacitors and 80% of the electronic chips are made in Belarus. In 2024-model Iskander missile control units, almost every capacitor is from Manalit,” the specialist said.

Kremlin Connections

Manalit’s exports to Russia are routed through a single distributor: SpecElectronKomplekt (SpecEk), a key supplier to the Russian Ministry of Defence.

Customs data obtained by Radio Free Europe/Radio Liberty and the Belarusian Investigative Center shows that between October 2022 and March 2025, Manalit shipped $43 million worth of goods to SpecEk — 96% of them ceramic capacitors.

SpecEk is listed in Russia’s closed defense contractors registry, which includes suppliers to major Russian defense firms such as:

Rostec: an umbrella for 350 defense companies producing 40% of Russian state military orders.

Almaz-Antey: maker of S-300, S-400, Buk, and Tor air defense systems.

KRET: electronic warfare systems.

UAC: Su, MiG, and Tupolev aircraft.

Tactical Missiles Corporation: precision missiles including Kh-101.

Uralvagonzavod: main battle tank production.

Russian Helicopters: Mi-8, Ka-52, and Mi-35 attack helicopters.

War Profits and Sanctions

Before the full-scale war in 2022, Manalit’s annual profits stood at about $1.4 million. By 2024, net profit had surged to $6.2 million — growth of more than 460% in five years.

The plant recorded record profits during the bloodiest conflict in Europe since World War II.

In May 2023, Ukraine imposed sanctions on Manalit for “directly facilitating Russian military aggression.” By contrast, the EU and US have imposed no sanctions, leaving its access to Western suppliers open.

That has made Manalit effectively a “sanctions gateway” — a Belarusian legal entity transferring Western technology to the Russian military.

Since coming under Russian control in 2011, the plant has been modernized with Western equipment, maintained open access to European and US raw materials, secured Russian military certification, and supplied capacitors found in missiles that struck multiple Ukrainian cities.

As Western governments continue to debate new sanctions, capacitors made in a quiet Belarusian factory keep traveling from Vitebsk assembly lines to Russian missile plants — and finally into Ukraine’s skies.

Most US stock indexes fell during Friday’s trading, but the Dow Jones rose alone to record its highest levels ever.

Data released today showed that retail sales rose by 0.5% month-on-month in July in line with expectations, indicating strong US consumption despite high tariffs.

Government data yesterday showed that the US producer price index rose by 0.9% month-on-month in July, exceeding analysts’ expectations for a 0.2% reading.

Similar US data released earlier this week showed the pace of growth in the US consumer price index holding steady at 2.7% in July, below expectations for a rise to 2.8%.

The core inflation index — which excludes volatile food and energy prices — rose to 3.1% in July, higher than expectations of 3% and up from 2.9% in June.

According to the FedWatch tool, investors now see a 99% probability that the Federal Reserve will cut interest rates by 25 basis points in September, compared with 94% yesterday and 57% a month ago.

Analysts also see a 61% probability of another 25-basis-point cut in October, up from 34% a month ago, and a 51% probability of a similar cut in December, up from 25% a month ago.

As for trading, by 16:55 GMT, the Dow Jones Industrial Average had risen 0.4% (165 points) to 45,075 after hitting an all-time high of 45,203 points. The broader S&P 500 fell 0.3% (18 points) to 6,450, while the Nasdaq Composite dropped 0.5% (103 points) to 21,507.

Copper prices fell on Friday on the back of bleak economic data from China, the world’s largest metals consumer, although losses were limited by a weaker dollar and hopes that the data would prompt Beijing to roll out more stimulus measures.

Three-month copper on the London Metal Exchange fell 0.4% to $9,730 a metric ton in official trading, retreating from Tuesday’s two-week high.

Friday’s data showed China’s factory output growth slowed to its weakest in eight months in July, while retail sales growth also decelerated sharply.

Shanghai copper futures fell 0.1% to 79,060 yuan ($11,008.23) a ton.

Neil Welsh, head of metals at Britannia Global Markets, said: “In the context of base metals, these indicators point to weak demand, which could weigh on metal consumption and prices amid concerns over a slowdown in China’s economy.”

However, prices found support on hopes that the weak data would increase pressure on Chinese policymakers to introduce more measures to boost domestic demand.

A weaker US dollar also supported the market, as investors remained cautious ahead of import price data. A weaker dollar lowers the cost of dollar-priced commodities for buyers using other currencies.

US copper futures on Comex fell 0.1% to $4.48 a pound by 12:25 GMT, putting Comex’s premium over LME copper at $127 a ton, or 1.3%.

Among other metals, aluminium on the LME fell 0.7% in official trading to $2,601.50 a ton, zinc lost 1.3% to $2,813, lead dropped 0.3% to $1,984, while nickel rose 0.3% to $15,075, and tin gained 0.3% to $33,550.