2023-08-17 12:17:29
Gold prices touched their lowest levels in five months, today, Thursday, with the dollar and US Treasury bond yields gaining momentum, and this comes at a time when European stocks fell under pressure from the decline in the shares of “BAI Systems” after it agreed to buy the aviation unit of the company. Paul Corp,” while the minutes of the Federal Reserve meeting (the US central bank) for the month of July (July) put pressure on sentiment, as it raised concerns about interest rates remaining high for a longer period.
The European Stoxx 600 index fell 0.5 percent, touching its lowest level in more than a month, and BAE Systems, Britain’s largest defense company, fell after it said it had agreed to buy aviation assets from Ballcorp in a deal. $5.55 billion in cash.
The performance of futures contracts on Wall Street varied after the market closed lower, yesterday, Wednesday, with the minutes of the US Central Bank meeting showing that its officials were divided regarding the need for more interest rate hikes.
In addition, Dutch insurance company Aegon fell 4.7 percent after the company announced financial results for the first half of the year, and shares in Norway fell 0.6 percent before the central bank there announced its decision on interest rates.
Nikkei falls amid expectations of a US rate hike
In East Asia, the Japanese “Nikkei” index closed just above its lowest level in two and a half months, as investor sentiment in Asia was affected by concerns about the faltering economic recovery in China and the prospects for raising US interest rates.
The Japanese index fell nearly 1.5 percent to 31,309.68 points, the lowest level since early June, before paring some losses to end the session down 0.44 percent at 31,626 points.
The broader Topix index fell 0.34 percent to 2,253.06 points, after earlier touching a one-month low of 2,227.62 points.
“Investors were only reacting to negative market signals, rising global returns and persistent concerns about the Chinese economy,” said Takehiko Masuzawa, head of trading at Philip Securities Japan.
The standard 10-year US Treasury bond yields reached their highest levels since October 2022 at 4.3120 percent today, amid expectations that interest rates will remain high for a longer period after a series of data that confirmed the strength of the US economy.
The minutes of the Federal Reserve meeting (the US central bank) last July, which was published yesterday, Wednesday, showed that officials were divided over the need to continue raising interest rates.
In parallel, “Fast Retailing”, which owns the “Uniqlo” brand, lost 0.16 percent, and the “Soft Bank” group ended the day slightly higher, while the health care equipment maker Terumo closed down 2.24 percent.
And official data showed, on Wednesday, that the number of visitors to Japan last July rose to its highest level since the pandemic, as the weak yen helped boost tourism and contribute to increasing growth in the third largest economy in the world.
Gold is at its lowest level in 5 months with the rise of the dollar
In the precious metals markets, gold prices touched their lowest levels in five months, as the dollar and US Treasury bond yields gained momentum after strong economic data recently reinforced expectations that the Federal Reserve (US Central Bank) will continue to tighten its monetary policy.
The price of gold in the spot market reached $1891.70 an ounce, its lowest level since March 15 (AFP)
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US gold futures fell 0.3 percent to $1,921.80 an ounce.
As for other precious metals, silver rose in the spot market 0.2 percent to $ 22.42 an ounce, while platinum settled at $ 882.50 after touching its lowest level since October 2022, and palladium fell 0.3 percent to $ 1205.70.
The rise of the dollar thanks to the strength of the US economy
In terms of currency markets, the dollar pushed the yen further downward, after the strength of the US economy highlighted the need for interest rates to remain high for a longer period, while the Bank of Japan (the central bank) had difficulty defending its ultra-loose stance on monetary policy.
The Australian dollar fell after the country’s employment rate fell unexpectedly last July while the unemployment rate rose more than expected.
The Australian dollar fell about 1 percent after the release of the data and also affected its New Zealand counterpart.
The Japanese yen recorded 146.565 against the dollar in early Asian trading, its lowest level since November 2022, after renewed pressure on it as a result of interest rate differences between the United States and Japan.
Yesterday’s data, Wednesday, showed a jump in the construction of single-family homes in the United States last July and an increase in permits for future construction, while an independent report revealed a surprising recovery in US factory production last month.
The euro fell 0.07 percent to 1.08695 dollars, while the pound sterling fell 0.1 percent to 1.27195 dollars.
The Australian dollar lost 0.9 percent, recording $0.6365, after the employment data was released, while its New Zealand counterpart fell more than 0.5 percent to $0.5903. Both hit their lowest levels since November.
The offshore yuan recorded its lowest level in nine months again at 7.3470 against the dollar.
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