Gold prices rose during today’s trading, supported by a weak performance of the dollar in morning trading and geopolitical tensions. Oil prices also rose supported by hopes for additional financial stimulus in China, the largest importer of crude in the world, and from an oil sector report that showed a decline in US crude inventories.
Gold rose today, Thursday, in weak trading due to the Christmas holiday, supported by the slight decline in the dollar and geopolitical tensions.
Gold rose in spot transactions by 0.43% to $2,628.45 per ounce in the latest trading.
Gold prices have increased by 27% since the beginning of the year so far, and are on track to achieve their best performance since 2010, driven by significant interest rate cuts by the Federal Reserve (the US central bank) and escalating geopolitical uncertainty.
Gold is usually seen as a safe investment option during times of geopolitical turmoil, and rises in a low interest rate environment.
On the geopolitical level, the Palestinian Islamic Resistance Movement (Hamas) and Israel exchanged accusations yesterday, Wednesday, of responsibility for the failure to reach a ceasefire agreement, despite talk during the past days about making progress.
US gold futures rose 0.35% to $2,644.70.
With a short week due to the holidays, trading volumes are likely to be weak as the end of the year approaches.
Gold is typically seen as a safe investment option during times of geopolitical turmoil, and rises in a low interest rate environment
The dollar index fell 0.1% before stabilizing in the latest trading, making the gold priced in it less expensive for holders of other currencies.
Traders are awaiting unemployment claims data in the United States scheduled to be released later today, and expect major political changes, including tariffs, reduced regulatory restrictions, and tax amendments with Donald Trump’s return to the White House next January.
Markets in Australia, New Zealand, Hong Kong and the euro zone will be closed on Thursday for the Boxing Day holiday.
As for other precious metals:
- Silver rose 0.46% to $29.76 per ounce.
- Platinum fell 0.23% to $941.45.
- Palladium fell 1.06% to $943.43.
Oil
Oil prices rose in weak trading due to the holidays, supported by hopes for additional financial stimulus in China, the world’s largest oil importer, and from an oil sector report that showed a decline in US crude inventories.
The day before Tuesday, Reuters quoted two sources as saying that the Chinese authorities had agreed to issue special treasury bonds worth 3 trillion yuan ($411 billion) next year, at a time when Beijing is working to intensify financial stimulus to revive the faltering economy.
Brent crude futures rose 39 cents, or 0.5%, to $73.97 per barrel in the latest trading, and US West Texas Intermediate crude recorded $70.53, an increase of 41 cents, or 0.61%, from the pre-Christmas settlement level the day before yesterday, Tuesday.
China plans to increase financial support for consumption next year by increasing pensions, supporting medical insurance for residents, and expanding consumer goods exchange operations, according to an announcement issued by the Ministry of Finance the day before Tuesday.
Market sources said the day before yesterday that the latest weekly report from the American Petroleum Institute on crude inventories in the United States showed a decrease by 3.2 million barrels last week.
Traders are awaiting the official report from the Energy Information Administration tomorrow, to see if it will confirm the decline in inventories.
