- Gulf Markets
The DFM General Index is falling for the third day, dropping 0.5%, or 18.88 to 4,032.31 in Dubai. Gulf Navigation Holding PJSC contributed the most to the index decline, decreasing 1.8%. Deyaar Development PJSC had the largest drop, falling 2.6%. In midday trading, 19 of 35 shares fell, while 6 rose.
The Tadawul All Share Index opened 0.4% lower, dropping 45.56 to 11,367.32, as stocks lose for the third straight day in Riyadh. Al Rajhi Bank contributed the most to the index decline, decreasing 1.1%. Saudi Arabia Refineries Co. had the largest drop, falling 3.1%.
Oil fell for a third day as concerns over China’s economy hurt appetite for risk assets and overshadowed industry estimates pointing to lower US inventories. West Texas Intermediate dropped below $81 a barrel after losing 2.6% in the week’s first two sessions. Crude prices edged lower as stocks in Asia dropped along with commodities as jitters over China’s stuttering economy escalated. Still, the American Petroleum Institute said nationwide crude stockpiles shrank 6.2 million barrels last week, according to people familiar with the figures. Inventories at the key Cushing, Oklahoma, hub were also seen declining. Oil has backtracked this week following a surge driven by supply cuts from OPEC+ linchpins Saudi Arabia and Russia, and estimates that worldwide crude consumption is running at a record pace. The decline has come amid disappointing economic data from top importer China, with banks cutting growth estimates as the nation’s gargantuan real estate sector flounders.
- Gold
Spot gold held its ground at $1,903.50 per ounce by 0546 GMT, while U.S. gold futures were flat at $1,935.60. The Dollar Index was down by 0.17% making the bullion cheaper for international investors.
The struggle for gold prices continues as real yields rise combined with the strength of the US Dollar which is reducing the yellow metal’s appeal. Indicating investor sentiment toward bullion, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, extended declines to their lowest since January 2020. No inflows have been reported since late July.
The retail sales data reported yesterday came in hot with added downward pressure on the bullion. Overall economic data from the US is coming in strong which increases the probability for the Federal Reserve to keep interest rates elevated. Gold on Tuesday dropped to as low as $1,895.50 an ounce, its weakest level since end-June, as benchmark 10-year U.S. Treasury yields hit an almost 10-month high, making them more attractive than non-interest-bearing bullion. If the demand for the US Dollar remains strong, gold can break the $1,900 level, thus increasing the probability of further downside. Investors will later scan minutes from the Fed’s July policy meeting for upcoming rate strategy.
On the technical hand, gold prices have bounced off the 1900 support level. The overall trend remains bearish. A break below 1895 can fuel corrections towards 1887 followed by 1880. On the upside resistance levels are 1920 followed by 1943 and 1964.
