Global oil prices rose during today’s trading, driven by encouraging Chinese data as well as the exchange of accusations between Israel and Lebanese Hezbollah of violating the truce, while gold fell with the rise of the dollar on the impact of President-elect Donald Trump’s demand from the BRICS countries for guarantees that the dollar will not be replaced in global commercial transactions.
Oil
Oil prices rose today, supported by optimism about the strength of manufacturing activity in China (the second largest oil consumer in the world), and escalating tension in the Middle East with Israel resuming its attacks on Lebanon despite the ceasefire agreement.
Brent crude futures rose 57 cents, or 0.79%, to $71.41 per barrel at the time of writing the report, while US West Texas Intermediate crude recorded $68.58 per barrel, an increase of 58 cents, or 0.85%.
Reuters quoted market expert at IG, Yip Jun Rong, as saying: “Oil prices succeeded in stabilizing in the new week, with the continued expansion of manufacturing activities in China, which reflects the success of the latest stimulus efforts to some extent.”
He added that this gave slight reassurance that demand for oil from China may continue for the time being.
Yip said that traders are still monitoring developments in Syria, and assessing whether they may lead to an expansion of tension in the oil-rich Middle East region.
The truce between Israel and Hezbollah entered into force last Wednesday, but the two sides are exchanging accusations of violating it.
Last week, the two benchmarks, Brent and West Texas Intermediate, fell by more than 3%, with fears receding about the damage to supplies due to the conflict between Israel and Hezbollah and the possibilities of increasing supply during the next year, despite expectations that OPEC Plus will extend production cuts.
Sources in the OPEC Plus alliance, which includes the countries of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, said last week that the alliance has postponed its next meeting on production policy to December 5, and is also considering postponing the production increase that was scheduled. To start in January.
“Extending the OPEC+ production cuts will allow more time to assess the impact of the announcement of US President-elect Donald Trump’s policies regarding tariffs and energy, as well as to see China’s reaction,” said Tony Sycamore, a market analyst at IG in Sydney.
gold
Gold’s 4-session rally stopped today, Monday, with prices declining under pressure from the strength of the dollar and profit-taking operations, while investors await important US economic data to obtain indications of the monetary policy expectations of the Federal Reserve (the US central bank).
Gold fell in instant transactions by 0.88% to $2,630.40 per ounce. US gold futures fell 1.05% to $2,652.80.
Key US economic data is scheduled to be released this week that may influence market expectations about monetary policy.
Among the most important data are the US jobs report, the ADP employment report, and the non-farm payrolls report. In addition to these statements, some Federal Reserve officials, including Chairman Jerome Powell, are scheduled to speak.
According to CME Group’s FedWatch tool, markets currently see a 67.1% chance of a 25 basis point cut in US interest rates in December.
“If the Fed more clearly sets the stage for keeping interest rates unchanged through 2025, we will likely see gold prices decline further,” said IG market analyst Yip Jun Rong.
High interest rates weaken the attractiveness of gold, which does not generate a return.
Gold prices fell by more than 3% in November, recording the worst monthly performance since September 2023, amid fears that the high tariffs that US President-elect Donald Trump intends to impose may lead to a long-term rate hike.
Dollar
The dollar rose amid expectations of a rate cut in the United States, while the yen’s recovery over the past few days was supported by bets on rising interest rates at home.
The dollar also received some verbal support from Trump, who on Saturday called on BRICS member states to pledge not to introduce a new currency or support another currency that could replace the dollar, otherwise 100% customs duties will be imposed on it.
Political uncertainty in France increased pressure on the euro, which fell by 0.4% to $1.0532, after rising 1.5% last week and moving away from the lowest level in a year at $1.0425.
This led to the dollar index rising to 106,170 points, after it ended November with gains of 1.8% even after suffering a setback last week.
The dollar rose 0.36% against the yen to 150.29, after falling 3.3% last week, its worst performance since July.
Data released today showed that business investment was progressing at a healthy rate of 8.1% in the third quarter, which encouraged markets to adopt a 63% expectation that the Bank of Japan would raise interest rates by a quarter of a percentage point to 0.5% at the monetary policy meeting on December 18-19. the first.
The European Central Bank is expected to cut interest rates this month with markets indicating a 27% probability that it may ease interest rates by 50 basis points on December 12.
Political uncertainty represents another obstacle to the single European currency as investors wait to see if the French government is able to withstand the week.
Leaders of the right-wing National Rally in France said yesterday that the government had rejected their calls for more concessions on the budget, which increases the possibility of a vote of no confidence in the coming days, which could oust Prime Minister Michel Barnier.
Source : Reuters + CNBC + Websites
