Gold Stabilizes, and Oil Rises 2% at Settlement

Market News Summary

On Tuesday, an electronic platform dedicated to monitoring gas inventories in Europe disclosed that the in-demand reserves crucial for winter heating remain at an average of 80% capacity across European Union countries. This comes amidst a chilling cold wave sweeping through the continent.

In November, the United States witnessed a contraction in its trade deficit, marked by a simultaneous decline in both imports and exports. This trend, attributed to elevated interest rates, was reported by the government on Tuesday. Contrary to analysts’ projections of a marginal deficit uptick, the deficit stood at $63.2 billion, contrasting with the revised October figure of $64.5 billion, as per the Department of Commerce.

Dollar Index (USDX)

Investors’ attention is now shifting to reports on consumer and producer inflation in the United States scheduled for release on Thursday. Analysts anticipate a deceleration in price increases in December. The survey conducted by the Federal Reserve Bank of New York on Monday revealed that consumers expect a decline in inflation, coupled with gradual increases in household income and spending in the coming years.

According to the CME FedWatch tool, market participants are foreseeing a 60% chance of a reduction in U.S. interest rates in March.

Pivot Point: 102.15

Spot Gold (XAUUSD)

Gold prices steadied as investors exercised caution in anticipation of the upcoming U.S. inflation data scheduled for later in the week. The data is expected to offer additional insights into the policy direction of the Federal Reserve.

The spot price of gold held steady at $2028.95 per ounce after reaching its lowest level in over three weeks on Monday. Meanwhile, the settlement of U.S. gold futures saw a marginal decline of 0.02%, closing at $2033.

Pivot Point: 2032

Dow Jones Index (DJ30ft – US30)

On Tuesday, the leading U.S. indices exhibited a mixed performance as modest increases in bond yields prompted investors to carefully assess the potential timing and extent of interest rate adjustments by the Federal Reserve. This week’s focus lies on the eagerly awaited release of crucial economic indicators, including the Consumer Price Index (CPI) and Producer Price Index (PPI). Additionally, the unofficial commencement of the earnings season on Friday, featuring reports from major banks such as JPMorgan, adds to the anticipation.

The Dow Jones Industrial Average dipped by 0.42%, shedding 158 points during Tuesday’s session. This brought an end to a three-day streak of gains, with the index closing at 37,525 points. The S&P 500 experienced a 0.15% decline, marked by losses in the majority of its 11 primary sectors. Notably, the energy sector led decliners with a drop of approximately 1.5%, while the technology sector stood out as a winner with a modest 0.1% increase. Meanwhile, the Nasdaq Composite Index posted a gain of around 0.1%, achieving its third consecutive daily advance.

Pivot Point: 37745

US Crude Oil (USOUSD)

Oil prices rebounded on Tuesday after a previous session dip, driven by tensions in the Middle East amid concerns about demand and increased OPEC supplies.

Brent crude futures rose by $1.47, equivalent to 1.93%, settling at $77.59 per barrel. Similarly, West Texas Intermediate (WTI) crude futures increased by $1.47, or 2.08%, settling at $72.24 per barrel.

Pivot Point: 71.85

Risk Warning

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