Gold Higher on Weaker Dollar: Top 5 Things to Know Today in the Markets

Published January 15th, 2018 - 01:30 GMT
Here are the top five things you need to know in global markets today Monday, January 15. (Shutterstock)
Here are the top five things you need to know in global markets today Monday, January 15. (Shutterstock)

Here are the top five things you need to know in global markets today Monday, January 15.

1. Dollars starts week with more losses against Euro, Yen

The U.S. dollar kicked off the week with more losses against its major rivals, remaining on the defensive as investors continued to price in the risk of tighter monetary policies in Japan and Europe.

The dollar index, which tracks the greenback against a basket of currencies, slipped 0.5% to 90.16 after falling as far as 90.12 at one point, its lowest since December 2014.

Against the yen, the dollar slumped to a four-month low at 110.53, after Bank of Japan Governor Haruhiko Kuroda offered a positive view on the economy and inflation, adding to expectations the BOJ could dial back stimulus earlier than expected.

The euro climbed 0.7% to a three-year peak of 1.2283, building on a 1.4% rally from last week, when minutes from the European Central Bank’s December meeting suggesting a potential hawkish shift in policy.

2. Gold and other metals higher thanks to weak dollar

Prices of precious and base metals started the week on the front-foot, rising across the board thanks to a potent combination of a softer dollar and continued robust outlook for demand.

Among precious metals, gold futures advanced to a four-month highpalladiumtraded at an all-time high, with silver and platinum also rising.

Meanwhile, copper jumped by the most in two months and zinc hit a fresh decade-high. Aluminumnickel and lead also surged.

A weaker greenback makes dollar-denominated commodities cheaper for buyers in other currencies.

3. Oil prices dip away from 2014 highs 

Crude prices edged away from their strongest level since late 2014, as the market weighed rising U.S. drilling activity against ongoing efforts by major producers to cut output to reduce a global glut.

 

U.S. West Texas Intermediate crude futures dipped 0.2% to $64.17 per barrel, while Brent futures shed 0.4% to $69.62 per barrel.

The number of oil drilling rigs climbed by 10 to 752 in the week to Jan. 5, data fromGeneral Electric (NYSE:GE)'s Baker Hughes energy services unit showed, the first increase to drilling numbers in five weeks.

Analysts and traders have recently warned that U.S. shale oil producers could ramp up production in the coming weeks as they look to take advantage of higher prices, potentially derailing an OPEC-led effort to curb excess supply.

4. Global stocks rally loses momentum

Global stock markets were mixed, as the strong rally to start the year finally showed signs of slowing.

Most major indexes in Asia closed higher, but Chinese bonds and equities stumbled after the government announced new steps on banking oversight in an "arduous" fight on financial risks.

Among notable standouts, Hong Kong's Hang Seng Index hit its highest intraday level since 2007, before slipping into negative territory in the last hour of trade.

In Europe, the majority of the continent's bourses got off to a sluggish start, following two weeks of gains, with cyclical stocks among the biggest decliners.

Shares in some competitors of British construction firm Carillion (LON:CLLN) rose after the long-struggling company collapsed, with banks refusing to lend it any more money.

Meanwhile, U.S. stock futures rose between 0.3%-and-0.5%, though Wall Street will be closed for the Martin Luther King Day holiday. All three major U.S. stock indexes closed at record highs on Friday, after some of the major financial companies in the U.S. reported strong quarterly results.

5. Bitcoin gains, Ethereum and Ripple push lower 

The prices of major cryptocurrencies were mixed, with Bitcoin inching higher, while Ethereum and Ripple pushed lower in relatively quiet rangebound trade.

Bitcoin was up around 2% at $13,765. That pushed its market capitalization up to $232 billion.

Ethereum, the world’s second largest cryptocurrency by market cap, was down 1% at $1,321. It hit a lifetime-high of $1,423.20 on Saturday.

Meanwhile, Ripple's XRP token was trading at $1.806, down around 3% for the day.

2018 has not started well for cryptocurrencies, with last week marking the second week in a row of poor performances.


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