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Stability and concerns
Gold stabilizes as core PCE data for this week is awaited
Oil prices surge to $73.80 amid supply concerns.
Gold maintains stability at $2026 per ounce, awaiting key US economic data.
Germany's business climate deteriorates, hinting at potential recession.
Oil prices surge on supply concerns
The week's trading saw a notable rise in oil prices, driven by fears of supply shortages. The escalation followed geopolitical tensions on Red Sea vessels, exacerbating concerns about oil availability. Despite uncertainties around Russia's export reduction plans, these supply fears pushed prices higher.
Oil futures climbed 0.8% to $79.20 per barrel, and WTI crude rose 0.7% to $73.90. Last week, global oil prices had already been trending upward, influenced by the US Federal Reserve's policy decisions and the prospect of an easing monetary stance in 2024.
Russia's announcement of further production cuts in December, reducing output by up to 50,000 barrels per day, also played a role in the price increase.
Gold holds steady amid economic data anticipation
Gold prices remained steady in Monday's trading, influenced by a lack of significant economic updates and lower bond yields. The anticipation of upcoming US inflation data also supported the metal's stability.
Spot gold prices hovered at $2021 per ounce, with gold futures at $2036. Last week saw gold gain momentum following the Federal Reserve's decision to maintain its monetary policy, hinting at interest rate cuts in early 2024.
The Fed's indications of ending its stringent tightening cycle and reducing interest rates next year, with a 70% chance of cuts as early as the first quarter, influenced the market. US 10-year bond yields stayed near their lowest since July, reflecting this sentiment.
German business climate worsens, recession fears grow
Germany's business climate index fell to its lowest in three months, dropping from 87.3 to 86.4 points, below the anticipated 87.6. This decline reflects German companies' dissatisfaction with current conditions and diminished economic expectations for the first half of 2024.
These disappointing trends, affecting not only Germany but the broader European economy, have raised concerns about a potential recession in 2024. The consistent flow of negative data has dampened recovery hopes, pointing towards an increasingly challenging economic landscape.
