Support
Gold steady as China resumes purchases
China's inflation and growth outlook worsened, while the country resumed gold purchases after a six-month pause
The EUR/USD pair weakened to around 1.0550
WTI crude oil prices showed resilience near $67.00
Gold prices hovered around $2,645
Asia
Investors recently received key inflation data from China, which showed a November year-on-year inflation rate of +0.2%, falling short of the expected +0.5%. Meanwhile, the Producer Price Index (PPI) was -2.5% year-on-year, slightly better than the anticipated -2.8%. These signs of ongoing economic struggles in China have led Fitch to lower its growth projections for 2025 and 2026, with 2025's GDP now expected to grow at 4.3% (down from 4.5%), and 2026's GDP forecast revised to 4.0% from 4.3%.
In contrast, Japan reported a slightly more positive economic update. The country's Q3 GDP growth was revised up to +0.3% quarter-on-quarter, slightly surpassing the previous expectation of +0.2%. USD/JPY exchange rate remained stable around the 150.00 mark, showing little movement due to cautious sentiment in the market.
Europe
The EUR/USD currency pair weakened, falling near 1.0550, driven by market expectations of an ECB rate cut. Investors are awaiting the US CPI data for November, scheduled to be released on Wednesday, which will be a key focus for the markets.
Commodities
West Texas Intermediate (WTI) crude oil prices showed some resilience, holding just below the $67.00 level after a three-day decline. The commodity's slight recovery can be attributed to OPEC+'s decision to delay supply increases and extend production cuts. The geopolitical risks tied to the Russia-Ukraine conflict and instability in Syria are also supportive factors for oil prices.
Gold prices saw moderate gains, hovering around $2,645, benefiting from renewed geopolitical tensions and expectations of potential Federal Reserve rate cuts. Additionally, China's resumption of gold purchases for its reserves in November, following a six-month pause, may further support gold prices. As of November's end, China's gold reserves grew to 72.96 million fine troy ounces, up from 72.80 million the previous month.
