Gold prices rose in Monday’s trading to the highest level in the history of the precious metal’s trading, as the dollar index declined, and oil prices stabilized, as a decline in Libyan exports compensated for signs of a worsening economic recession in China.
Gold futures rose 0.12% to $2,616.1 an ounce.
Spot contracts also rose 0.17% to $2,582.04 per ounce, according to trading.
In the currency market, the dollar index, which measures the value of the US currency against a basket of major currencies, fell by 0.37% to 100.7390 points.
In contrast, oil prices steadied after posting their first weekly gain in a month, as a drop in Libyan exports offset signs of a deepening economic recession in China.
Brent futures were trading near $72 a barrel, while West Texas Intermediate rose to around $69. Libyan exports fell sharply as U.N.-led talks failed to break a deadlock over control of the central bank, which has spilled over into the oil industry.
Chinese data over the weekend showed industrial output posted its longest losing streak since 2021 and investment fell more than expected, as the official economic growth target of 5% this year looks increasingly out of reach. The deteriorating situation in the top crude importer — coupled with rising global supply — has sent Brent down about 17% this quarter, nearing its lowest since late 2021.
Vivek Dhar, an analyst at Commonwealth Bank of Australia, said weak Chinese demand “is likely to persist until we see China looking to defend” its growth target. “That could be just a month away, just like we saw last year,” he added, referring to Beijing’s widening of its budget deficit in October.
Meanwhile, hedge funds’ outlook on Brent has shifted, with their short positions exceeding their long positions (by about 12,680 contracts) for the first time in data going back to 2011. However, some short positions began to ease as prices recovered on Wednesday and Thursday of last week.
The market is also tracking Typhoon Bebinca, which made landfall near Shanghai. It is the biggest storm to hit China’s financial capital and major shipping hub since 1949. Financial markets in China are closed on Monday and Tuesday for a national holiday.
Last updated: September 16, 2024 – 10:18
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2024-09-17 09:38:08