US stocks declined today as fears of a wider conflict escalating in the Middle East continued to drive investors away from riskier assets. Gold appreciated for the fourth consecutive day, surging to $1989/oz, while silver reached $23.57/oz. This month’s surge in the price of gold is similar to the increase we saw in March when the banking woes raised fears of a bigger financial crisis. After almost touching 5% yesterday, after strong labour data, the 10-year US Treasury yield edged lower today and stood at 4.93%. The 5% remains a psychological barrier, and we can expect the yield to edge around this level in the coming days. The dollar stayed mostly flat at 106.26.
This week, China released several important economic indicators. While consumer spending has exceeded expectations, the housing market is still struggling, which is dampening the overall optimism in other economic sectors. This has led to a generally pessimistic outlook for Chinese assets and base metals. In particular, nickel has been particularly affected by the decline in the housing market, losing up to 40% of its value since the start of the year, making it the worst-performing base metal this year. Recent trading activity in the metals market supports this view, as both aluminium and copper, which are sensitive to macroeconomic factors, are currently trading at the lower end of the long-term range, closing at $2,181.50/t and $7,948.50/t, respectively. Lead and zinc remained unchanged, closing at $2,099.50/t and $2,438/t, respectively.
Oil futures remained elevated above $90/bl. Gold and silver continued to strengthen, rallying to $1,994/oz and $23.60/oz, respectively.
All price data is from 20.10.2023 as of 17:30