30/09/2024 Daily Reports
Oil prices extended gains on Monday, buoyed by escalating concerns over potential supply pressures from Middle East producers following Israel’s increased attacks on Iranian-backed forces in the region.
Brent crude futures for November delivery increased 51 cents, or 0.71%, to $72.49 a barrel. That contract expires on Monday, and the more-active contract for December delivery gained 50 cents, or 0.7%, to $72.04. U.S. West Texas Intermediate crude futures added 43 cents, or 0.63%, to $68.61 a barrel.
Last week, Brent fell around 3%, while WTI fell by around 5% as demand worries increased after fiscal stimulus from China, the world’s second-biggest economy and top oil importer, failed to reassure market confidence. However, prices on Monday were supported by the possibility of a widening Middle East conflict involving Iran, a key producer and member of the Organization of the Petroleum Exporting Countries (OPEC), after Israel stepped up its attacks on the Hezbollah and Houthi militant groups that Iran backs.
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Global markets are navigating a whirlwind of news, from Middle East tensions to fresh stimulus measures in China. Japan’s Nikkei plunged 4.6% as investors priced in potential rate hikes under new Prime Minister Shigeru Ishiba, though he softened his stance on policy. Meanwhile, Chinese stocks soared 5% after Beijing announced lower mortgage rates and eased home purchase restrictions.
The U.S. dollar steadied against the yen, while Fed officials are set to speak this week, ahead of a crucial August payrolls report that could determine the size of the next interest rate cut. In Europe, key economic data, including German and French CPI figures, and speeches from ECB President Christine Lagarde and Fed Chair Jerome Powell, are in focus.
Gold Prices Near Record High Amid Fed Rate Cuts and Geopolitical Tensions
Gold prices eased slightly on Monday but remained close to the record high set last week. The metal is on track for its best quarter in over eight years, driven by the U.S. Federal Reserve’s significant interest rate cut and the possibility of another large reduction in November. Spot gold fell 0.2% to $2,653.38 per ounce due to a stronger U.S. dollar, which makes gold less appealing to holders of other currencies. Despite this, gold has risen over 14% this quarter, fueled by factors such as the Fed’s actions, China’s stimulus measures, and concerns over Middle East conflicts.
Gold’s performance this week will be influenced by U.S. labor market data, including ADP employment figures and nonfarm payrolls, as well as speeches from Federal Reserve officials. If indications of further aggressive rate cuts emerge, the U.S. dollar could weaken, benefiting gold. Additionally, ongoing geopolitical tensions, such as Israel’s airstrikes in Lebanon and Yemen, continue to support gold as a safe-haven asset.
