Oil and gold prices rose, and the dollar index increased during today’s trading, with the continued impact of the US presidential elections and the uncertainty of the scene as a result of the war in the Middle East.
Oil
Oil prices rose by more than 1% today, Thursday, compensating for the losses of the previous session with renewed concerns about tension in the Middle East ahead of the US presidential elections.
Brent crude futures rose 82 cents, or 1.09%, to $75.87 per barrel, while US West Texas Intermediate crude futures rose $86, or 1.22%, to $71.63 per barrel, amid concern about supplies after an intense exchange of fire between Israel and Lebanese Hezbollah.
Crude prices have increased by nearly 4% so far this week, which contributes to compensating for last week’s losses, which amounted to more than 7% as a result of concerns about demand in China and the decreased possibility of disruption to supplies from the Middle East.
The US Energy Information Administration reported earlier Wednesday that crude inventories rose by 5.5 million barrels to 426 million barrels in the week ending October 18, exceeding analysts’ expectations of an increase of 270 thousand barrels.
A series of stronger-than-expected economic data on consumer spending, jobs and inflation prompted investors to reduce their bets on the pace and scope of US interest rate cuts.
A lower interest rate than expected would ease the reduction in borrowing costs, which in turn could affect economic activity and demand for oil.
gold
Gold prices rose amid demand for a safe haven despite the rise in the dollar, while palladium recorded its highest level in more than a month.
Gold increased in spot transactions by 0.65% to $2,733.43 per ounce, at the time of writing the report, and prices had reached a record high level yesterday, Wednesday, at $2,758.37, due to increased demand for the yellow metal, amid tension over the US elections and the conflict in the Middle East.
US gold futures contracts increased 0.61%, recording $2,746.10.
The dollar approached its highest levels in 3 months, which limited gold’s ability to continue rising.
The competition is heating up in the US presidential elections between Republican candidate Donald Trump and Democratic candidate Kamla Harris, with less than two weeks remaining until the vote scheduled for November 5.
As for other precious metals, silver recorded $34.18 per ounce in spot transactions, and palladium jumped 5.44%, recording $1,121.92 per ounce, its highest level in about a year.
Bloomberg reported that Washington had asked its allies in the G7 to consider imposing sanctions on Russian palladium and titanium.
Platinum increased 1.31% to $1,034.83 per ounce.
Dollar
Today, Thursday, the dollar remained near the highest level in 3 months against other major currencies, supported by expectations of a slower pace of interest rate cuts from the Federal Reserve (US Central) and increasing bets on Trump winning a second term.
The dollar index, which measures the currency’s performance against 6 major competing currencies, including the euro and the yen, recorded 104.21 at the time of writing the report, not far from the 104.57 level that it recorded overnight for the first time since July 30.
A series of strong macroeconomic indicators and some hawkish comments from Federal Reserve officials have reduced bets on the amount of monetary easing during the rest of this year, according to CME Group’s FedWatch tool.
Expectations to cut interest rates by 50 basis points in total during the remaining two meetings in 2024 fell to about 66% from about 70% the previous day and about 86% a week ago.
Traders currently expect 32% to cut interest rates once by 25 basis points by the end of the year, and only 2% expect no change.
As a result, 10-year US Treasury yields rose to a 3-month high of 4.26% overnight.
The Japanese yen tends to decline when US bond yields rise, and the dollar rose against the Japanese currency, reaching 153.19 yen yesterday, Wednesday, for the first time since July 31.
The dollar also benefited from a recent increase in market expectations that Trump will win the election next month, which is likely to lead to inflationary policies such as tariffs.
The euro fell to its lowest level in almost 4 months at $1.07612 overnight, and was last traded at $1.0796.
The British pound settled at $1.2967, after falling to its lowest level in more than 5 weeks at $1.29080 in the previous session.
Source : Reuters + CNBC + Websites
