Gold rose over the week amid falling global stock markets
On Friday, by the time set the London benchmark at night, gold was at around $ 1.754 an ounce, reversing the fall of the past two weeks, while global equity markets continued a series of daily losses that were the worst since the February 2020 panic.
Wall Street yesterday recorded its first losing month in 2021 and its worst calendar quarter since the onset of the Covid-19 crisis in early 2020. Markets in China have been closed for national holidays. Australian shares lost 2.0% at the end of last week, while Japanese shares lost 2.3% and closed at 3-month and monthly lows, respectively.
The EuroStoxx 600 Index fell 1.5% in early trading in Frankfurt and Paris as new data showed inflation in the 19-nation union hit a 13-year high of 3.4% – led by a 17.4% rise in energy costs. In year. The European Union has suspended trade negotiations with Australia over a controversial deal to protect Aukus with the United Kingdom and the United States. European equities cut losses to 0.3% but approached their lowest weekly close since mid-June, bringing the MSCI World Index down for the 6th straight day, the worst since the February 2020 panic.
The fall in emerging markets was not that significant. BSE Sensex in India, the world’s second-largest consumer of gold, fell to a two-week low just 2.2% below its new all-time high on Monday.
The Borsa Istanbul 100 Index remained unchanged for a day after President Recep Tayyip Erdogan met with Vladimir Putin to confirm Ankara’s purchase of S-400 missile systems and discuss further military hardware purchases including military aircraft and submarines.
On Thursday, the New York S&P 500 lost 1.2%. Gold futures trading volumes on the Comex jumped to a two-week high, and options trading volumes peaked since June 17, when gold posted its 8th-worst daily fall after analysts called the Federal Reserve’s monetary policy commentary hawkish. According to the Bloomberg Global Aggregate Index, talk of QE cuts and interest rate forecasts could put government and corporate bondholders at their worst annual loss this century.
As Western governments continue to issue new debt at near-record rates, investors consume unprecedented volumes of corporate debt and equity issues, the Financial Times reported.
This frenzy, involving the sale of more than $ 1 trillion in stocks and the issuance of nearly $ 4 trillion in bonds, has affected the biggest names in the corporate world – Apple, Walmart, Baidu, and Volkswagen. But, unlike speculation in gold on the Comex, Thursday’s gold price reversal did not affect the SPDR Gold Trust and remained its smallest size since April. For two weeks in a row, the shareholders of the giant gold-backed ETF liquidated their positions.
Meanwhile, the iShares Silver Trust gained 1.6% as the price of silver rallied, allowing the fund to record the second week of net investor inflows. As of this writing, global equity markets are heading towards their steepest weekly decline since January, down more than 3.1% from last Friday before US trading opened. The price of silver, like the price of gold, has offset losses over the past two weeks for US investors, reaching $ 22.40 an ounce after hitting a 14-month low on Wednesday.
While the US dollar gold price recovered from a 1.6% drop last week, the British pound gold price hit its highest Friday close in four years, albeit 1.0% below the jump to £ 1.307. The cost of gold in euros also showed substantial gains compared to the previous week, reaching its highest result on Friday of the last three at $1.510.
