Afternoon summary
Time to recap
Gold has hit a record high, before slipping back this afternoon, as markets turned a little jittery.
The bullion price jumped to $2,111 per ounce, having already hit an alltime high on Friday night.
Analysts said gold was benefitting from expectations that US interest rates could be cut as early as spring 2024, which has weakened the US dollar.
John Reade, market strategist for Europe and Asia at the World Gold Council, says:
Today’s move appears to be technical in nature, considering the price action and some conversations with market participants. It appears some traders had been caught out by the move on Friday and were short gold and consequently bought the open in Asia. This triggered stop-loss buying from other traders including those short gold via options lifting gold to a new all-time high of about $2135/oz. Once this buying was completed, gold drifted lower.
“The longer-term story, that of strong central bank gold buying, probably had nothing to do with this morning’s quick move. Gold has performed well over the past fortnight as the US dollar has weakened and traders started to price a lot more cuts from the US Federal Reserve into the interest rate curve. In addition, geopolitical tensions including the Israel-Hamas conflict have contributed to the recent rally in the gold price, especially at the start of November.
“Short-term moves like this morning aside, by far the most important financial market drivers of gold will be the direction of the US dollar and the amount of cuts that traders price into the US interest rate market.”
Elsewhere in the markets, bitcoin climbed to a 20-month high over $42,000, as speculation in cryptocurrencies gathers pace.
Traders cited the prospect of 2024 rate cuts, and speculation that US regulators could approve a bitcoin exchange-traded fund (ETF), which could push moe money into crypto.
In other news today….
UK homeowners with a mortgage faced the highest personal rate of cost inflation in the year to September as interest rates hit people’s disposable income, new data from the Office for National Statistics shows.
Almost one in 10 UK households failed to pay a major bill in the month to 10 November, the highest level recorded since April 2020.
The Barclay family has repaid the nearly £1.2 billion that it owed to Lloyds Bank, opening up its chance to transfer control of the Telegraph newspaper to an Abu Dhabi-backed fund.
Jeremy Hunt has blamed Brexit for more than half a decade of political instability that has undermined business investment in the UK, as he sought to defend tax cuts paid for by public sector austerity to drive up economic growth.
Hunt was speaking after the Resolution Foundation showed that British workers are missing out on £10,700 a year after more than a decade of weak economic growth and high inequality.
A Guardian investigation has shown that the UK’s most hazardous nuclear site, Sellafield, has been hacked into by cyber groups closely linked to Russia and China.
Spotify is cutting almost 1,600 jobs as the music streaming service blamed a slowing economy and higher borrowing costs in the latest round of redundancies at big tech companies.
Average house prices in the UK will fall by 1% next year as competition increases among sellers, Britain’s biggest property website, Rightmove, has forecast.
Rail passengers around Great Britain continue to face disruption this week, with train drivers striking on four separate days in different parts of the network and refusing to work overtime throughout.
US factory orders fall
Ouch. US manufacturers were hit by a drop in orders in October.
US factory orders fell by 3.6% month-on-month in October, the Census Bureau reports, or by $21.8bn to $576.8bn. That follows two months of gains, and is larger than the 3% drop which was expected.
Orders for durable goods (long-lasting equipment and machinery) fell more sharply, by 5.4%.
🚨Factory Orders MoM -3.6% (Forecast -3%, Previous 2.8%, Revised 2.3%)
— HaiKhuu (@HaiKhuuTrading) December 4, 2023
Durable Goods Revised -5.4% (Forecast -5.4%, Previous -5.4%)
Core Durable Goods Revised 0% (Forecast -, Previous 0.0%) pic.twitter.com/7qbdzdc87z
This may be another signal that the US economy is weakening at the end of this year, as global demand deteriorates, just as the Federal Reserve tries to pull off a soft landing….
