Gold Reaches Record High as Oil Prices Dip Amid Market Divergence

London, United Kingdom — On Friday, gold surged to an unprecedented high as global stock markets showed mixed results. Wall Street saw profit-taking, while European and Asian markets gained traction, buoyed by positive data reflecting the robust health of the U.S. economy and the anticipated interest rate cuts by the Federal Reserve.

The U.S. dollar weakened in light of these expected rate cuts, while oil prices dropped due to reduced demand forecasts from China, despite ongoing tensions in the Middle East, traders noted.

Gold reached a new peak, trading at $2,500.16 per ounce. Investors flocked to this safe haven asset as the likelihood of a U.S. interest rate cut in September increased, alongside rising geopolitical risks.

Analyst Fawad Razaqzada from City Index and FOREX.com commented that the sharp drop in bond yields, driven by expected rate cuts from the Fed, significantly boosted gold prices.

Meanwhile, U.S. stock indices saw minor declines after Thursday’s rally, spurred by better-than-expected retail sales data, which alleviated fears of a looming recession. The Dow Jones slipped by 0.2%, the S&P 500 decreased by 0.3%, and the Nasdaq Composite fell by 0.3%.

Patrick O’Hare, an analyst at Briefing.com, remarked that while these declines are modest compared to recent gains, investors are hesitant to buy the dip, aware of the market’s rapid ascent in a short period.

Asian markets also reflected this cautious optimism. The Nikkei 225 in Tokyo jumped 3.6%, with the yen weakening against the dollar early in the trading day.

In contrast, London’s stock market experienced a downturn, with a stronger pound affecting multinational companies earning in dollars. Meanwhile, shares in Bayer, a German chemical giant, soared by 10.7% following a legal win in the U.S. regarding its glyphosate-based weedkillers.

Oil prices continued to decline, with Brent crude falling below $80 per barrel. Analyst Carsten Fritsch from Commerzbank noted that fears of an Iranian retaliatory strike on Israel have not materialized, leading to a reduction in the risk premium. Additionally, fresh concerns over demand are putting downward pressure on oil prices.

Key Figures (around 1:30 PM GMT):

• New York – Dow: DOWN 0.2% at 40,502.13 points
• New York – S&P 500: DOWN 0.3% at 5,525.71 points
• New York – Nasdaq Composite: DOWN 0.5% at 17,507.74 points
• London – FTSE 100: DOWN 0.6% at 8,301.82 points
• Paris – CAC 40: UP 0.2% at 7,434.24 points
• Frankfurt – DAX: UP 0.5% at 18,277.46 points
• EURO STOXX 50: UP 0.4% at 4,827.29 points
• Tokyo – Nikkei 225: UP 3.6% at 38,062.67 (close)
• Hong Kong – Hang Seng Index: UP 1.9% at 17,430.16 (close)
• Shanghai – Composite: UP 0.1% at 2,879.43 (close)
• Euro/dollar: UP at $1.1000 from $1.0972
• Pound/dollar: UP at $1.2901 from $1.2853
• Dollar/yen: DOWN at 147.76 yen from 149.06 yen
• Euro/pound: DOWN at 85.26 pence from 85.36 pence
• West Texas Intermediate: DOWN 1.6% at $76.88 per barrel
• Brent North Sea Crude: DOWN 1.5% at $79.84 per barrel