The oil price looks optimistic. What are the reasons?
Gold rallies in Asia ahead of China GDP
On Monday, gold headed north in Asia ahead of China’s second quarter GDP, retail sales and industrial output for June. Market participants also paid attention to property development.
In New York, August delivery gold futures inched up 0.25%, trading at $1,230.56, while copper futures rallied 0.19% getting to $2.689 a pound.
China’s second quarter GDP added 1.7%, meeting expectations, while a year-on-year leap of 6.9% moderately surpassed the expected 6.8%.
The previous week, gold gained to two-week peaks as poor American inflation data contributed to doubts over whether the key US bank would lift interest rates for a third time in 2017 or not.
Gold concluded the week with a gain of 1.32%.
In June, American consumer price inflation dropped to 1.6% from May’s outcome of 1.9%, as the Labor Department reported on Friday.
Expectations that interest rates will remain low tend to underpin gold, struggling to compete with yield-bearing investments when borrowing costs ascend.
USD’s rally takes a pause, while riskier assets are modestly rising.
We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.