Market Updates

Gold

Gold was up on Monday morning in Asia, while U.S. Treasury yields rose thanks to hawkish signals from the U.S. Federal Reserve. Markets are also beginning to price in a sooner-than-anticipated reduction in the Fed’s balance sheet.

Gold futures edged up 0.16% to $1,819.40 by 11:36 PM ET (4:36 AM GMT). Benchmark 10-year U.S. Treasury yields also remained near two-year highs hit during the previous week. In this U.S. Senate Banking Committee hearing that took place during the previous week, Fed Chairman Jerome Powell said that the U.S. economy is ready for the start of tighter monetary policy. Other Fed officials have also indicated that the central bank is likely to hike interest rates in March 2022. The Fed will meet to hand down its next policy decision on Jan. 25 to 26, while the Bank of England will hand down its decision on Feb. 3. In Asia Pacific, the Bank of Japan will hand down its latest policy decision on Tuesday.

Elsewhere in the region, Chinese data released earlier in the day showed that the GDP grew 4% year-on-year and 1.6% quarter-on-quarter in the fourth quarter of 2021. It also showed that industrial production grew 4.3% year-on-year and retail sales grew 1.7% year-on-year in December, while the unemployment rate was at 5.1%. The People’s Bank of China, in a surprise move, also cut borrowing costs for medium-term loans for the first time since April 2020.

Meanwhile, physical gold buying dropped in India during the previous week thanks to rising prices and numbers of COVID-19 cases. In China, a top consumer of the yellow metal, demand stabilized as the Lunar New Year holiday approaches. In other precious metals, silver and platinum were down 0.3%, and palladium fell 0.4%.

 

Gold

Oil

According to bloomberg.com, Saudi Arabia’s energy minister said that he was unconcerned about oil’s more-than-10% rise this year, even as traders increasingly raise the prospect of prices reaching $100 a barrel.

“I’ve always been comfortable,” Abdulaziz bin Salman said to reporters in Dubai on Monday, where he’s attending at Expo event.

Brent crude’s climbed 11% since the end of December to above $86 a barrel, amid signs consumption will hold up despite the spread of the omicron variant of the coronavirus. At the same time, spare capacity is dwindling as some of the world’s biggest producers struggle to boost output.

Vitol, the world’s biggest independent oil trader, is among those predicting that prices will rise further as supplies tighten. As per investing.com, OPEC+ member Oman said last week that the group -- led by Saudi Arabia and Russia -- would try to prevent the oil market “overheating” and didn’t want prices to reach $100 a barrel.

Prince Abdulaziz also said he wasn’t worried about the U.S. releasing more oil from its Strategic Petroleum Reserve, which could push crude prices down. Oil prices were steady on Monday, as investor bets that global supply will remain tight amid restraint by major producers were offset by a rise in Libyan output.

Brent crude was down 4 cents, or 0.1%, to $86.02 a barrel by 0953 GMT. Earlier in the session, the contract touched its highest since Oct. 3, 2018 at $86.71. U.S. West Texas Intermediate crude was up 20 cents, or 0.2%, at $84.02 a barrel, after hitting $84.78, the highest since Nov. 10, 2021, earlier in the session. U.S. officials voiced fears on Friday that Russia was preparing to attack Ukraine if diplomacy failed. Russia, which has amassed 100,000 troops on Ukraine's border, released pictures of its forces on the move.

 

WTI OIL

Brent OIL

Natural Gas

The U.S. government has held talks with several international energy companies on contingency plans for supplying natural gas to Europe if conflict between Russia and Ukraine disrupts Russian supplies, two U.S. officials and two industry sources told Reuters on Friday.

The United States is concerned Russia is preparing for the possibility of a new military assault on the country it invaded in 2014. Russia denies it plans to attack Ukraine. The European Union depends on Russia for around a third of its gas supplies, and U.S. sanctions over any conflict could disrupt that supply. Any interruptions to Russia's gas supply to Europe would exacerbate an energy crisis caused by a shortage of the fuel. Record power prices have driven up consumer energy bills as well as business costs and sparked protests in some countries.

If pipeline supplies from Russia to Europe are reduced, European buyers would need to seek cargoes of superchilled gas to compensate. U.S. exports of liquefied natural gas (LNG) are set to soar this year to make it the world's top LNG supplier. Europe competes for LNG supplies from suppliers such as the United States and Qatar with top consumers China and Japan, which also face an energy crunch.

 

Earnings

Dividends

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