Oil Futures Fall for Third Session; Gold Hits Record High Amid Rate Speculation – APM Capital Market Report

Mark Pussard, Head of Risk, APM Capital

Commodities

Oil futures posted a loss for the third straight session Tuesday, with prices marking their lowest finish in two weeks dragged down by worries about a slowdown in global energy demand and risk-off sentiment in the U.S. market, coupled with Easing Middle East tensions and hopes for an end to the Gazan conflict.

West Texas Intermediate crude for September delivery fell 3

3 cents, or 0.4%, to end at $74.04 a barrel on the New York Mercantile Exchange on the contract’s expiration day. 

The October contract, now the front month, fell 49 cents, or 0.7%, to settle at $73.17 a barrel. October Brent crude on the global benchmark, shed 46 cents, or 0.6%, to $77.20 a barrel on ICE Futures Europe.

Natural gas for September delivery settled at $2.20 per million British thermal units, down 1.7%, after gaining 5.3% on Monday.

Gold prices extended their record run on Tuesday, rising more than 1% to a record US$2,531.60/ oz on optimism that the likely course of US interest rates would increase the attraction of holding precious metals.

Spot gold finally closed up 1.1% to $2,530.40 per ounce. December U.S. gold futures gained about 1.1% to finish at $2,569.00.

US market

U.S. stocks ticked lower Tuesday and snapped an eight-day winning streak, the longest of the year.

The Standard & Poor’s 500 slipped 0.2%, but it’s still just 1.2% below its all-time high set last month. It has roared back from its scary summer drop when the index briefly dipped nearly 10% below its record, but closed yesterday down 11.13 points to 5,597.12.

The Dow Jones industrial average also saw a small fall 0.2%, or 61.56 points to 40,834.97. The Nasdaq composite slipped 0.3%, or 59.83 points to 17,816.94. The yield on the 10-year Treasury fell to 3.81% from 3.87% late Monday.

European market

European stocks also gave back some recent gains yesterday with caution prevailing ahead of this weekend’s Jackson Hole symposium. The Stoxx Europe 600 index dropped 0.45% to 512.27.

The FTSE 100 index felt the worst of the bearish sentiment weakening 1.00% to 8,273.32. The German DAX dropped 0.35% to 18,357.52 with the French CAC 40 index falling 0.22% to 7,485.73.

Asian market

Asian stocks scaled a one-month peak on Tuesday, tracking a Wall Street rally driven by expectations that the Federal Reserve could offer further hints of imminent rate cuts later this week.

MSCI’s broadest index of Asia-Pacific shares outside Japan hit a one-month top before giving up some gains to trade 0.4% higher.

China’s Shanghai Composite index fell 0.93 percent to 2,866.66 after the People’s Bank of China left its benchmark lending rates unchanged as expected. Hong Kong’s Hang Seng index dipped 0.33 percent to 17,511.08.

The Nikkei average jumped 1.80 percent to 38,062.92 after having snapped a five-day winning streak the previous day, although Nikkei 225 futures fell after hours, mirroring the picture across global equities. The broader Topix index settled 1.11 percent higher at 2,670.54.

Forex

The dollar fell to its lowest level since January on Tuesday as investors awaited revisions to U.S. payrolls data on Wednesday and Federal Reserve Chair Jerome Powell’s speech to the Jackson Hole economic conference in Wyoming later in the week.

The dollar index was last down 0.22% at 101.65, having reached 101.62, its lowest level since Jan. 2. The euro rose 0.14% to $1.1101 and climbed as high as $1.1105, its strongest level since Dec. 28.

Sterling continued its upward momentum, strengthening 0.27% to $1.3023 and reached as high as $1.3030, the highest level since July 17.

The dollar weakened 0.33% to 146.09 Japanese yen after reaching 145.20 on Monday, the lowest level since Aug. 7. In cryptocurrencies, bitcoin gained 3.08% to $60,916.00

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