GOLD
Gold prices hit a new all-time high in early Thursday trading. Despite the strengthening US dollar, the precious metal continues to see strong demand, driven by a drop in 10-year Treasury yields, the prospect of interest rate cuts by major central banks, global economic uncertainty, and geopolitical risks—including the unpredictable outcome of the US presidential election. The main driver of today’s gains is likely the sharp decline in Treasury yields, with the 10-year note falling by more than half a percentage point. Speculation around a potential second Donald Trump presidency, with a focus on its protectionist policies and the possible impact on trade and economic growth, has fuelled demand for the safety of US bonds. This dynamic has put downward pressure on yields, lowering the opportunity cost of holding non-yielding assets like gold.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
OIL
Brent oil prices fell by nearly 1% as European trading began, continuing the downward momentum of recent sessions. Fading fears of an Israeli attack on Iran's oil facilities, along with lowered expectations for global demand growth, are weighing on prices. This trend is further exacerbated by increasing scepticism that China's recently announced stimulus measures will be sufficient to reignite growth in the world's largest crude importer. In this context, while an escalation in the Middle East could reverse the current trend and provide support to prices, the overall outlook for oil remains bearish.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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