Gold fell amid expectations of higher interest rates in the United States and Britain
The price of gold declined on Monday, as global bond yields rose because the markets are trying to put a rate hike in the price by the central banks of the UK and the US, as concerns about inflation intensify, and oil reaches new multi-year highs.
Silver, primarily an industrial metal, fell 0.2% to 23.27 dollars after rising 2.8% last week. Platinum, two-thirds of the demand provided by the industry, fell 1.6% to 1,043 dollars per ounce after an increase of 3% last week. The spot price of gold in London fell by 0.2% to 1,764.33 dollars, continuing last week’s decline by 1.6% after rising to $1,800 for the first time in a month amid news of the highest consumer price inflation in the United States in the last three decades.
Almost 80% of positions in US derivatives at the interest rate for September 2022 expect at least one rate increase by the Federal Reserve by 25 basis points compared to less than 30% a month ago. According to Saxo Bank, gold has fallen again after last week’s rally, which indicates the inability of gold to break through and hold at higher levels. precious metal “fell sharply and returned to the range on Friday, which is the most increase in risk appetite and a rapid increase in yields in the United States.”
Asian stock markets fell due to China’s GDP data, while the European stock index Stoxx 600 lost 0.5% of last week’s gain, which exceeded 2%. New data showed that China’s economy is growing at the slowest pace in a year, much lower than analysts’ forecasts. According to official estimates, China’s economy grew by only 4.9% from July to September compared to the same period last year, which is the slowest pace since the third quarter of 2020 and lower than analysts predicted. In the spring, the growth was 7.9%.
On Monday morning, the yield on ten-year US Treasury bonds again exceeded 1.6%, reaching the highest since the end of May. Having fallen after the publication of inflation data last Thursday, the yield on 10-year bonds resumed growth on Friday after separate data showed an increase in retail sales in the United States by 0.7% in September against an expected decline of 0.2% every month.
British bond yields also rose on Monday, with two-year rates jumping to 0.747%, the highest level in two and a half years, after Bank of England Governor Andrew Bailey said the central bank was preparing to raise overnight rates. Monetary policy cannot solve supply problems, but the central bank should act if there is a risk, especially for medium-term and medium-term inflation expectations.
Eurozone bond yields have risen despite the softer stance of politicians. European Central Bank President Christine Lagarde reiterated on Saturday that “inflation is largely temporary.” However, Lagarde said the ECB was paying “close attention” to wage negotiations and other potential effects that could lead to more permanent price increases.
German 10-year bond yields rose four basis points to -0.13%, returning to last week’s 5-month high.
Meanwhile, oil has reached new multi-year peaks, and Brent crude futures have risen to $86 dollars per barrel, which is the highest since October 2018. Futures for US West Texas Intermediate crude oil rose to just below 84 dollars – the highest since October 2014. Both contracts rose at least 3% last week, continuing the seven-week growth.
