The American election race and Israel’s escalating war in the region shaped market trends during Tuesday’s trading. Gold hovered near a record level, the dollar stabilized against a basket of major currencies, and oil compensated for some of its previous declines to remain in the green zone for the second day in a row.
gold
Gold prices rose and hovered near the record high level reached in the previous session, amid a state of uncertainty regarding the US elections and the current tensions in the Middle East with Israel continuing its aggression against the Gaza Strip and Lebanon and threatening to strike a painful blow against Iran, and expectations that major central banks will reduce interest rates.
The yellow metal increased in spot transactions by 0.5% to $2,799.07 per ounce, achieving its highest level ever, and US gold futures contracts increased by 0.3% to $2,747.30 per ounce.
Gold is considered a hedge in times of political and geopolitical fluctuations, and it jumped yesterday, Monday, recording the level of $2,740.37 per ounce, and has risen by more than 32% since the beginning of this year.
With the US presidential elections approaching, which will be held on November 5, Democratic candidate Kamala Harris and Republican candidate Donald Trump are engaged in a fierce competition to win some of the most swing states.
While the Israeli attack on Lebanon and Gaza has escalated recently, there are no indications that Israel is curbing its air and ground attack.
Regarding interest rates, CME’s Fed Watch market monitoring tool revealed that traders now expect by 89% that the US central bank will reduce by 25 basis points next November.
As for other precious metals, silver increased in spot transactions by 1.17% to $34.18 per ounce after reaching its highest levels since the end of 2012 in the last session.
Oil
Crude oil prices continued to rise during today’s trading, continuing to compensate for the losses they suffered last week, which amounted to 7%, in light of the rise in tensions in the Middle East despite US Secretary of State Anthony Blinken renewing his efforts for a ceasefire.
Brent crude futures rose 0.49 cents, or 0.66%, to $74.76 per barrel, and US West Texas Intermediate crude futures fell 74 cents to $70.98 per barrel on the last day of the contract as the nearest month of maturity.
Brent and West Texas Intermediate crude contracts settled at an increase of about 2% yesterday, Monday, compensating for some of the decline witnessed last week by more than 7%, with the continuing fighting in the Middle East and the market’s concern about the expected Israeli response to Iran, which may partially disrupt oil supplies from the region. Rich in it.
Meanwhile, China cut its benchmark lending rates as expected yesterday after cutting other interest rates last month as part of a package of stimulus measures to revive the economy, which supported oil prices.
The move comes after data on Friday showed that China’s economy grew in the third quarter at the slowest pace since early 2023, raising growing concerns about oil demand.
The head of the International Energy Agency said – yesterday, Monday – that the growth of oil demand in China is expected to remain weak in 2025 despite the recent stimulus measures taken by Beijing.
Dollar
The US dollar stabilized amid expectations that the Federal Reserve (the US central bank) would adopt a deliberate approach to lowering interest rates, while a state of tension prevailed among investors with the close competition in the US presidential elections.
The dollar, strengthened by higher Treasury yields, continued to pressure the yen, the euro and the pound, a trend that has increased over the past few weeks as data showed that the US economy remains in good shape, which led to a rapid reduction in bets on a US rate cut. At great rates.
Yesterday, Monday, 4 Federal Reserve policymakers expressed their support for further cuts in interest rates, despite their disagreement about the speed of the cuts and the target range.
The divergent views give a glimpse of what we can expect at the Federal Reserve’s next monetary policy meeting on November 6-7.
Markets see an 89% chance of a 25 basis point cut in interest rates during the next meeting, compared to a 50% chance last month.
The dollar index, which measures the performance of the US currency against 6 major currencies, reached 103.97, after reaching 104.02 points yesterday, Monday, which is its highest level since the first of August, and the index is on its way to achieving a gain of more than 3% during the current month.
The euro reached $1.0817 in the latest trading, approaching its lowest level since August, and the British pound reached $1.2974, near its lowest level since August 20.
As the US presidential elections approach, the dollar has received support from the growing possibility that former President Donald Trump will win the November 5 elections, as the tariff and tax policies he proposes are likely to keep US interest rates high.
In a note, strategists from Bain Bridge Investments said, “With a Trump win, we can expect a somewhat turbulent environment with a lot of uncertainty.”
The memo added: “While a Trump victory could be viewed as an unfavorable circumstance in the short term for markets, the picture looks very different in the longer term… In a way, we view Harris’ victory as a continuation of the status quo and current policies, as it implies a slower process in Policy transformations.
