‎“National Bank of Kuwait”: Gold takes upward trend to reach ‎its highest levels ever

A report issued by the National Bank of Kuwait said that last week, gold began to take an upward trend after expectations of the Federal Reserve reducing interest rates increased, as it added about $83 to its value before settling in the $2,050 price range.

As geopolitical tensions ease, the focus of gold prices has shifted more towards the future path of the Federal Reserve.

According to Al-Anbaa, the report stated that the US dollar index maintained its downward path to end last week’s trading at 101.71 points, after the sharp decline it witnessed in the wake of the cautious speech delivered by Federal Reserve Chairman Jerome Powell.

The report indicated that this decline contributed to strengthening the performance of some currencies from their dollar counterparts, as the pound sterling and the euro gained momentum against the dollar, ending the week’s trading at the level of 1.1010 and 1.2700, respectively.

While the currency pair US dollar against the Japanese yen was seen at a low level of 140.9 this month, levels that we have not seen since August, a decline that made the Bank of Japan feel comfortable and decide to keep interest rates unchanged at the last monetary policy meeting held. Earlier this week…

It appears that the dollar’s decline coincided with a decline in the bond market, as 10-year Treasury bond yields fell to about 3.84%, in light of the market’s tendency to bet on lowering interest rates in the coming months.

The US consumer confidence report, which was issued this December, revealed that the index rose to the highest levels recorded in 5 months, as its reading reached 110.7 points, that is, higher than the previous reading of 101.0 points, and it is also higher than the expected number of 104.6 points. .

The report showed an increase in confidence among all age groups in the United States, with the highest growth rate recorded in the 35-54 age group, whose annual income is $125,000 and above. This growth comes despite continued fears of high inflation, as consumers indicated Their planning to purchase assets such as cars, homes, and major appliances during the next 6 months

The increase in confidence levels may be due to the recent rise witnessed in the stock market, as several indices such as the Dow Jones Index and the Standard & Poor’s 500 rose to record levels in the last quarter of 2023, in addition to declining inflation rates and lower gasoline prices.

Regarding applications for unemployment aid, the report stated that the number of Americans applying for new unemployment aid rose to 205,000 applications, according to the latest data issued in December, which is higher than the previous number of 203,000 applications, but it is less. Of the expected increase of 214 thousand applications

This number, among the recently released data, contributes to enhancing the flexibility and strength of the labor market, as the Federal Reserve is closely monitoring employment data in search of indicators about the strength of the economy, after retail sales data rose at a pace higher than expected in November, which showed an increase of 0.3%. % compared to the previous reading, which recorded a decrease of 0.2% in October

The flexibility of the labor market in light of difficult economic conditions has diminished expectations of a recession and supported the US Federal Reserve’s goal of achieving a soft landing in its battle against inflation.

UK retail sales data rose 1.3% in November, after remaining unchanged the previous month. The release of the data was followed by a market reaction that saw the GBP/USD currency pair rise to 1.27 and stabilize around 1.268, which are the levels we last saw last August.

The marginal sales growth, which is the fastest month-on-month growth rate since January, indicates consumer resilience in light of mounting pressures resulting from continued high interest rates and their impact on economic conditions in the United Kingdom.

In the latest news, the inflation rate in the United Kingdom fell to its lowest levels recorded in two years, as the latest reading of the Consumer Price Index reached 3.9% on an annual basis, lower than the expected figure of 4.3%.

Although this decline is mainly due to lower energy prices, it has contributed to strengthening expectations about when the Bank of England will cut interest rates next year.

Bank of England officials have taken a tough stance regarding their approach to combating inflation and keeping interest rates high as long as necessary, while closely monitoring economic trends in the coming period to determine the next steps.

The Bank of Japan decided to keep its ultra-loose monetary policy unchanged at its last monetary policy meeting held in December.

This decision is consistent with market expectations, while officials are waiting for more indicators about the conditions of prices and wages in the Japanese economy, given that positive data may contribute to the shift away from monetary stimulus.

The central bank also decided to maintain its accommodative policy related to negative interest rates, after some expectations emerged of the approaching end of current interest rates in the wake of the decline of the US dollar, which contributed to strengthening the performance of the Japanese yen during the past weeks.

Oil prices rebounded marginally during the week after a downward trend that lasted for two consecutive months against the backdrop of fading concerns related to geopolitical tensions that affected the global economy, as West Texas Intermediate crude futures rose to $74,087 compared to its lowest levels of $68.98 last week.