Oil and Dollar eye annual losses, Gold gains on shifted Fed outlook
WTI crude faces a 10% annual decline despite OPEC+ cuts, gold climbs over 13% on rate cut anticipations, and the dollar index drops over 2% in 2023 as Fed policy softens.
Asian stocks drop in the last session of 2023, while Japan records a decade-high annual gain.
WTI crude stabilizes at $72 but faces its first annual loss since 2020.
Gold ends the year stronger, buoyed by rate cut expectations.
Dollar index holds steady, yet marks an annual decline.
As 2023's trading winds down, Asian stocks experienced a dip in their final session, contrasting with Japan's significant yearly gain, the best in a decade. Meanwhile, US and European futures edged up slightly, along with benchmark Treasuries. The dollar maintained steadiness while Brent crude saw a slight increase.
Oil on track for first yearly decline since 2020
WTI crude futures steadied around $72 per barrel on Friday but are on track for their first annual loss since 2020. This decline, about 10% for the year, reflects concerns over increasing global crude supplies and slowing demand growth. Despite OPEC+ production cuts and geopolitical conflicts, these factors failed to sustainably boost oil prices. The year witnessed short-lived rallies in oil prices, primarily driven by OPEC+ cuts. However, rising production from non-OPEC countries and a shaky demand outlook have contributed to the downward pressure on prices.
Gold poised for yearly rise amid expectations of rate reductions
Gold steadied at around $2,070 an ounce and is poised to conclude the year with a notable gain. Firm expectations of US Federal Reserve rate cuts early next year have bolstered the precious metal, which climbed more than 13% in 2023, marking its first annual gain in three years and achieving a new record high.
Dollar braces for year-end decline amid softened Fed stance
The dollar index, though stable above 101 on Friday, is set to end the year on a lower note. The index lost over 2% in 2023, following a cumulative gain of about 15% in the previous two years. This year's decline reflects the changing market sentiment and monetary policy expectations.