June 27, 2022

Dubai Week

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Amid fears of a recession, European stock markets plunged and gold fell to a three-month low.  Economy

Amid fears of a recession, European stock markets plunged and gold fell to a three-month low. Economy

European stocks opened lower on Monday after China’s weak economic data aroused fears of a global recession, and gold fell to a three – and – a – half month low as the dollar rose.

The Pan-European Stoxx 600 index fell 0.6% to 07:15 GMT, after recording its first weekly gain in 5 weeks on Friday.

China’s April retail sales fell 11.1%, almost doubling expectations, while industrial output fell 2.9%, while analysts expect a slight increase, raising fears that the world’s second largest economy will shrink this quarter amid closures imposed to fight the explosion. Govit-19.

The travel and leisure sector cut losses by 1.4% among sub-indices. Shares of the healthcare sector suffered the biggest losses, while shares of luxury goods companies fell 1.1%, including “LVMH” (LVMH), the owner of the Louis Vuitton brand, which receives the bulk of demand from China.

The trend was supported by the telecom sector, which was supported by Vodafone’s 3.5% growth, up 0.6% after acquiring a 9.8% stake in UAE’s Emirates Telecommunications Group (Etisalat).

New decline for gold

In addition, with the rise of the dollar, gold fell to its lowest level in 105 days, and today the price of gold fell more than 1%, the lowest level since late January, the continued impact of the strength of the dollar against demand. Yellow metal, denoted in US currency.

Spot gold fell 0.8% to $ 1,797.82 an ounce in 0815 GMT. US gold futures were down 0.6% at $ 1,797.40 an ounce.

In the previous session, gold fell 1.4 percent to a low of $ 1,786.60 an ounce. On Friday, the yellow metal saw weekly losses for the fourth week in a row.

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The US dollar closed at a two-decade high and consolidated its gains as the weaker data of the Chinese economy hit the currency (shutterstock).

The dollar is consolidating its gains

On the other hand, as the weak data of the Chinese economy affected the currencies, including the British pound and the Australian dollar, the US dollar approached a two-decade high, reducing the attractiveness of gold to holders of other currencies. .

The US Federal Reserve raised interest rates by 25 basis points for the first time during the epidemic in March as it sought to tighten monetary policy.

Although gold is considered a haven from inflation, it is sensitive to rising US interest rates and bond yields in the short term, both of which increase the potential cost of holding gold.

Among other precious metals, silver was down 0.2% at $ 21.02 an ounce and platinum was down 0.5% at $ 934.16 an ounce. Palladium was down 1.3 percent at $ 1,918.59 an ounce.