GOLD and oil prices dipped today as investors eyed strong looking US economic data after a weekend that offered some relief about the state of the disaster in Gaza.
Last week saw investors race to the safest haven assets and to bet on a jump in energy prices. Shares were sold sharply.
This morning, as a small number of trucks offering humanitarian aid crossed into Gaza from Egypt, oil prices eased, with Brent crude down $1 to $91. Fears that it would rocket past $100 a barrel have eased for now.
Vandana Hari of oil market analyst Vanda Insights, said: “There is some relief in the oil market that Israel is holding off on a planned ground incursion of northern Gaza to negotiate a release of hostages, which opens up a window for diplomacy.
A ground siege is seen as a potential trigger for widening the Israel-Hamas conflict into the Middle East region, the factor behind crude’s risk premium over the past fortnight.”
Gold, silver and copper prices all also fell, hitting mining shares. Gold dropped nearly 1% to $1.965.89 per ounce.
The FTSE 100 mostly held its own, off just 21 points at 7382. Consumer stocks such as Next and Ocado all enjoyed a bounce.
Steve Clayton, head of equity funds at Hargraves Lansdown, said: “European futures markets are suggesting a small sigh of relief. With no further protagonists joining the Israeli/Hamas conflict, markets look to be steadying, with little news flow from the corporate sector this morning to change investors’ minds in either direction.”
Chinese stocks are still under pressure with investors nervous about China’s apparent manoeuvring against the US
With the US economy looking strong, demand for dollars remains high.
US 10-year treasury yields hit 5% overnight. Closer to home, 30-year gilt yields hit another 25-year high, at 5.160%.
Victoria Scholar, Head of Investment, interactive investor said: “Sentiment and risk appetite appear to have picked up slightly this morning with safe-haven gold retreating from five-month highs and oil prices easing thanks to diplomatic efforts in the Middle East.”
