Gold Supported By The Halt In The US Dollar Rally, Brent Crude Futures Increased 4%, Cotton Futures
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Summary:
- Gold prices rose by almost 2% on Friday.
- The price of Brent crude futures increased by about 4%.
- Cotton prices remained almost 50% below their May peak.
Gold prices rose in the wake of the halt of the US dollar rally
On Friday, when the dollar rally came to a halt and investors considered the monetary policy prospects, gold prices rose by almost 2%, approaching $1670 an ounce. The most recent payrolls report demonstrated that the US labor market is still strong, with payroll growth above expectations by 261K, supporting the Fed's decision to continue its tightening measures. Investors also believe that much more tightening won't likely be required, despite the unemployment rate exceeding expectations. The Fed Chair stated that it is "premature to discuss pausing" and that interest rates would need to rise more than initially anticipated as the central bank announced its fourth consecutive 75 basis point rate hike on Wednesday.
Gold Futures Price Chart
Brent crude futures touching levels not seen since late July
The price of Brent crude futures increased by about 4% to above $98 per barrel, a level not seen since late July, as news reports that China would ease its coronavirus-related restrictions in the near future improved the outlook for demand. Additionally, the likelihood that the world's oil markets would continue to be highly tight gave bulls another reason for optimism. There is growing concern that the oil cartel would further intervene in markets to support prices, despite the recent agreement by OPEC+ to reduce output by 2 million barrels per day in November, the largest since the epidemic. Concerns about a projected recession-driven decline in demand brought on by a string of draconian tightening measures from important central banks kept prices in check. The international benchmark increased by about 5% this week, putting it on course to advance for a third straight week.
Brent Crude Oil Futures Price Chart
Cotton futures 50% lower than late July peak
As dip buyers started to show up, a significant selloff that had driven cotton futures to a nearly 22-month low of 71.6 last month was tempered. Cotton futures are now moving towards the 80 USd/Lb level. Nevertheless, prices remained almost 50% below their May peak, restrained by a stronger currency and persistent worries about demand brought on by the difficult economic climate. According to the most recent estimate from the US Department of Agriculture, both acreage and yield grew, and worldwide cotton production is predicted to reach 118.1 million bales in 2022–2023—an increase of 2% over the previous year. India, Brazil, and China are mostly responsible for the increased output, which counterbalanced decreases from the United States and Pakistan.
Cotton Futures Price Chart
Sources: finance.yahoo.com, tradingeconomics.com
