Markets in a week.. a record peak in gold prices, and risks raise oil
An ounce of gold touched an unprecedented peak in trading today, Friday, and is on track to record its fourth weekly gain in a row, while oil prices rose as a result of tension in the Middle East. The yellow metal rose, supported by central bank purchases amid geopolitical tension, while strong American economic data did not succeed in dampening demand for it.
By 03:45 GMT, the spot price of an ounce of gold rose 0.5% to $2,384.34. The metal recorded an unprecedented high level of 2395.29 earlier in the session. US futures contracts increased 1.2% to $2,401.8, according to Reuters data. In this regard, Luca Santos, an analyst at ACY Securities, said, “The only thing that definitely pushes central banks to buy gold is the wars that occur globally. If we look at history, this always happens because gold is a safe haven.”
Despite the recent inflation data and the strong US jobs report last week, which raised more questions about the feasibility of lowering interest rates this year, gold is heading for its fourth consecutive weekly rise and recording an increase of more than 15% since the beginning of the year. High interest rates undermine the attractiveness of holding gold that does not generate returns.
As for the rest of the precious metals, silver rose in spot transactions 1% to $28.75, recording its highest levels since February 2021. Platinum rose 0.7% to $986.65, and palladium rose 0.1% to $1,049.83.
Oil rose on Friday but lost throughout the week
Oil prices rose today, Friday, in light of escalating tension in the Middle East, raising the possibility of disruption of supplies from the oil-producing region. However, prices are heading to incur a weekly loss amid expectations of fewer reductions in US interest rates this year.
By 04:20 GMT, Brent crude futures rose 51 cents, or 0.57%, to $90.25, while US West Texas Intermediate crude futures rose 61 cents, or 0.72%, to $85.63. These gains erased some of the losses recorded in the previous session, which was dominated by concerns about US inflation, which reduced hopes for lowering interest rates in June.
ANZ Research said in a note today that “geopolitical risks remain high,” adding that oil prices also jumped with the support of improving economic conditions and supply cuts adopted by the Organization of the Petroleum Exporting Countries and its allies within the framework of the OPEC+ group. Oil prices are still heading to record a weekly decline, as Brent and West Texas Intermediate are heading to decline by more than 1%, according to data at 04:20 GMT.
Leading stocks support European stock exchanges amid hopes for a rate cut
On another line, European stocks opened higher today, Friday, supported by gains in leading stocks, while investors remained optimistic after the European Central Bank hinted that it may begin cutting interest rates in June. The European Stoxx 600 index rose 0.9%, and is heading towards achieving a weekly gain of 0.4%, while the leading stock index rose 1.1%.
The Basic Resources Index led sector gains, advancing 2% following a slight rise in basic metal prices. Shares in the region’s major economies, such as Germany, France, Spain and Italy, rose by between 0.5% and 1%. The Financial Times 100 Index rose by 0.8% after data showed that economic output in the United Kingdom grew for the second month in a row in February and revised the January reading upward.
Chip stocks revive Japan’s Nikkei index
In Tokyo, Japan’s Nikkei index closed higher today, Friday, as chip-related stocks tracked the rise in technology stocks in the United States last night, while a decline in Fast Retailing shares, the parent company of Uniqlo, limited gains. The Nikkei Index rose 0.21% to close at 39,523.55 points, achieving a weekly gain of 1.41%. The broader Topix index advanced 0.46% to 2,759.64 points and rose 2.11% during the week.
US stocks closed higher yesterday, Thursday, and technology-related stocks led the rise, as new economic data revived hopes that inflation would continue to slow, a day after recording a strong reading. However, Treasury bond yields continued to rise, as higher-than-expected consumer price index data raised doubts about the ability of the Federal Reserve (the US central bank) to reduce interest rates this year.
2024-04-12 11:18:18
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