Wednesday, July 24, 2024

Oil rises after China cuts interest rates, gold falls as dollar rises | economy


Oil prices rose – today, Tuesday – after China unexpectedly cut key interest rates for the second time in 3 months, but modest economic data limited gains, at a time when gold prices fell, hurt by the dollar’s recovery from US Treasuries. Yield.

Brent crude was up 0.1% to trade at $86.32 a barrel at 04:14 GMT, while US West Texas Intermediate crude was also up 0.1% at $82.57.

Prices edged higher after the Bank of China cut interest rates by 15 basis points to 2.50% from 2.65% earlier for 401 billion yuan ($55.25 billion) worth of loans under a one-year medium-term lending facility to some financial institutions. .

Data on industrial production and retail sales in China released on Tuesday showed the economy has slowed further in the past year. Last month, it added to the pressure on already falling growth, prompting authorities to cut key interest rates to support economic activity.

Despite weak macroeconomic data, China’s appetite for oil appeared strong, with the country’s refinery output rising 17.4% last July from a year earlier. margins. Greater regional profitability through fuel exports.

As the dollar rises, gold falls

On the other hand, gold prices fell, hurt by a stronger dollar, which benefited from a rise in Treasury yields and economic worries in China, at a time when markets are now waiting for US retail sales data, which could shed light. Impact of rising interest rates on consumer spending.

And by 06:18 GMT, gold was down 0.2% at $1904.50 an ounce in spot trades, trading at its lowest level in over a month and a half hit yesterday on Monday.

See also  Gold is declining as yields in US treasuries increase

U.S. gold futures were down 0.4% at $1,937 an ounce.

The U.S. dollar neared its highest level in more than a month in light of concerns over the Chinese economy, which is pushing overseas buyers to pay higher prices for gold.

US Treasury yields reached their highest level since November 2022, increasing the opportunity cost of owning gold. It does not generate income.

In other precious metals, silver was at $22.62 an ounce, platinum was down 0.1% at $900.83 an ounce, and palladium was down 0.6% at $1262.34 an ounce.

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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