Gold rose 1 percent to scale a six-month peak on Monday as sliding stock markets and concerns about a global economic slowdown sapped risk sentiment, driving investors to seek safety in the precious metal. “Gold has continued to be firm here in the course of equity market weakness and an ongoing bevy of factors that are concerns for the market such as trade wars, interest rate hikes and others,” said David Merge, director of metals trading at High Ridge Futures. Global stocks continued their downward trend for the seventh straight session as possibilities of a prolonged U.S. government shutdown and a deteriorating global economy unnerved investors. The dollar was pressured amid concerns that the U.S. Federal Reserve will keep raising rates into a weakening economy.
London copper extended its losses to end at $5,959/mt on Monday and touched a three-month low of $5,941/mt during American trading hours. The SHFE 1902 contract fluctuated to end at 48,020 yuan/mt overnight. Most markets will shut for Christmas today, and SHFE copper is expected to continue to hover at lows with most transactions at 47,850-48,250 yuan/mt.As oil prices declined, LME nickel relinquished earlier gains to close flat at $10,875/mt on Monday. The SHFE 1905 contract edged down to close at 90,030 yuan/mt overnight. Investors were cautious overnight, with trading volumes thinning. SHFE nickel is expected to trade range bound today as the year-end eroded trading enthusiasm among investors.
Oil prices plunged more than 6 per cent to the lowest level in more than a year on Monday, pulling back sharply late in the session as fears of an economic slowdown rattled the market.US crude futures and global benchmark Brent hit their lowest levels since 2017 during the session, putting both benchmarks on track for losses of about 40 per cent in the fourth quarter. Whats happening in the stock market is raising fears that the economy is grinding to a halt and thereby will basically kill any future oil demand, said Phil Flynn, an analyst at Price Futures Group in Chicago. There pricing in a slowdown in the economy if not a recession with this drop.
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