EUR 8.82 For Business Accounts Only

Gold falls on Fed rate hike prospects, on track for weekly dip, (AKD Commodities vantage, Nov 21 2022)

GOLD: Gold prices fell on Friday and were bound for a weekly dip following indications from U.S. Federal Reserve officials that more interest rate hikes were due as the bank seeks to lower inflation. Spot gold fell 0.7% to $1,748.55 per ounce by 2:09 p.m. ET, set for a weekly decline of about 0.9%, its biggest since mid-October. U.S. gold futures also fell 0.7% to $1,750.6.The slight pullback in gold after the recent rally has been through a technical retracement in the gold market, said David Meger, director of metals trading at High Ridge Future. Gold has shed 15% since its March peak after the Fed began tightening monetary policy, it has gained about 7% since the beginning of November as markets started pricing in a slower pace of rate hikes.

OIL: Both benchmarks are heading for a second weekly loss, with Brent on track for a decline of about 9% and WTI heading for a setback of 10.5%. As part of the rout, the market structure of both oil benchmarks shifted in ways that reflect dwindling supply concerns. “On the demand side, there are concerns about an economic slowdown,” said Avatrade’s Naeem Aslam. “The path of least resistance seems skewed to the downside.” The Fed is expected to raise rates by a smaller 50 basis points (bps) at its Dec. 13-14 policy meeting after four consecutive hikes of 75 bps, a Reuters poll showed. OPEC+, which began a new round of supply cuts in November, holds a policy meeting on Dec. 4.

US-EQUITIES: S&P 500 futures fell early on Monday ahead of another batch of retail earnings to kick off a shortened week for the Thanksgiving holiday. Futures tied to the broad market index were lower by 0.35%. Dow Jones Industrial Average futures were lower by 84 points, or 0.25%. Nasdaq 100 futures were 0.33% lower. The week ahead is a short one. The market will be closed Thursday for Thanksgiving. On Friday, the stock exchanges will close at 1 p.m. ET and the bond market will close at 2 p.m. ET.

U.S DOLLAR: The dollar index, which tracks the greenback against six main peers, was recently 0.06% lower at 106.342 after earlier hitting a low of 105.859. The dollar was up 0.07% against the Japanese yen at 139.405, compared with Tuesday’s two-and-a-half-month low of 137.67. Tuesday’s U.S. data had suggested last week’s cooler-than-expected consumer price inflation was not a one-off, fueling hopes that the U.S. Federal Reserve can slow aggressive rate hikes that had sent the dollar soaring against the pound, euro and yen this year.