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Gold rises to highest level in a month as China data add to growth jitters

Gold prices climbed and U.S. stocks fell on Monday as concerns about the weakening global economy intensified by signs that Corona virus closures had clouded China’s growth forecast.

Yellow metal, which usually advances in times of uncertainty, rose about 0.8 percent to $ 1,989 an ounce, reaching its highest level in more than a month.

U.S. stocks fell Monday as the blue S&P 500 fell 0.3 percent in afternoon trading, while the Nasdaq Composite shed 0.6 percent in sparse trading as markets reopened over the long weekend. S&P 500 stock trading volumes were About 20% below the recent averages, according to Bloomberg data.

The broad MSCI stock market index in the Asia-Pacific region fell 1.1%, the second consecutive day of declines. The major markets in Europe were closed for Easter Monday.

In government bond markets, the 10-year yield on finance rose by 0.06 percentage points to 2.87%. Yields are upside down.

The cautious start of the trading week followed China’s proliferation of Economic Data. Gross domestic product rose by 4.8% in the first three months of 2022 compared to the same period in 2021, beyond market expectations.

But economic activity data for March revealed how Beijing’s zero cube policy, including Shanghai lock, Eroded the growth forecast of the world’s second largest economy. Retail sales were down 3.5% in March compared to the same month in 2021, the first year-on-year decline since July 2020; The annual growth rate of industrial production has slowed; And indicators tracking China’s struggling real estate market have deteriorated further.

“While March data show a marked slowdown in growth momentum, with the escalation in zero-cobide policy and widening disruption in economic activity, the drag on economic activity is likely to be larger in April compared to March,” JPMorgan analysts said.

JPMorgan has reduced its forecast for Of China GDP growth in 2022 from 4.9% to 4.6%. Barclays also cut its estimate for growth in 2022 from 4.5% to 4.3%.

The recent flurry of concerns about China has added to investor displeasure over plans by global central banks to tighten monetary policy in an attempt to curb rampant inflation. Indeed, U.S. natural gas prices rose 10 percent Monday to $ 8.03 per million British thermal units – the highest level since 2008.

Investors will closely watch the speeches of Federal Reserve officials, including Chairman Jay Powell, this week, which may provide further guidance on how policymakers will aggressively raise interest rates this year.

Jan Hatzius, chief economist at Goldman Sachs, said at the weekend that the central bank was facing a “hard way to a soft landing” as Tried to push the inflation rate A decrease to a 2 percent target, from 8.5 percent, by sharply increasing lending costs and reducing the balance sheet size by $ 9 billion.

Hachios sees a 15% chance that the US will fall into recession next year and a 35% chance that it will in the next 24 months.

Investors also digested the latest cluster of companies results. Bank of America reported Monday better than expected Gains Driven by rebound loans and higher interest rates.

The first-quarter earnings season in the U.S. began on a decent footing, with companies in the S&P 500 so far reporting earnings as high as 7.5 percent of estimates, according to FactSet.

However, less than a tenth of the companies in the Blue Index have updated the market so far, and investors will have a better picture of the overall forecast by the end of the week, with 67 more components including Netflix, IBM and American Express reporting results.

Gold rises to highest level in a month as China data add to growth jitters Source link Gold rises to highest level in a month as China data add to growth jitters

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