Gold Price Falls from New Record Highs, China's Stock Market Leaps
Friday, 9/27/2024 16:31
GOLD FELL on Friday, snapping a 5-day run of new all-time highs and halving this week's jump to fresh record prices as global equities extended their gains, led by the strongest weekly leap in China's stock markets since 2008 after Beijing's Communist dictatorship joined the country's central bank and local governments in announcing stimulus measures to try reversing the world No.2 economy's slowdown.
Priced in the weakening US Dollar, bullion today fixed $5 below yesterday's
fresh all-time gold high at London's 3pm benchmarking auction, making a weekly gain of 2.2% at $2663 per Troy ounce before sliding to $2650 in spot-market trade.
With 13 weeks to go until the end of the year, gold has now risen in 22 out of 39 weeks so far in 2024.
That tops end-September 2023's year-to-date count of 18 with the highest number of weekly gains for gold since autumn 2020's reading of 26. But it's only a little above the past half-century's year-to-date average of 20.
"The rally in gold seems unstoppable at this point,"
says a headline on financial and politics blog-site ZeroHedge.
"Gold boom at risk from
reliance on derivatives and
weak fundamentals,"
says an opinion piece at
Forbes.
Official gold prices in China – the precious metal's No.1 mining, importing, consumer and central-bank buying nation – had earlier touched a fresh record at ¥599 per gram, gaining 1.7% from last Friday's finish while the Shanghai and Shenzhen stock markets leapt by 15.7% for the week.
As China's financial and bullion markets closed for the long Golden Week holidays, that put the CSI300 index at its highest level in exactly 12 months, rebounding 17.2% from the new 5.5-year closing low hit a fortnight ago.
Even so, Chinese equities remain 1/3rd below New Year 2021's record high, and while the CSI300 index is now trading 3.9% lower from this time 5 years ago, gold priced in Yuan has risen 73.1%.
"It is doubtful that the Chinese authorities' coordinated package of monetary and fiscal stimulus measures will suffice to lastingly revive Chinese activity," says a note from analysts at French investment bank Natixis.
"But the signal they sent reassured the market – one less tail risk in the short term!"
Like gold, the price of more industrially-useful silver marked its 3rd weekly gain in a row in London on Friday, buoyed by a strengthening premium in Shanghai inviting new imports and suggesting improved demand.
Silver prices today set their highest Friday 12 noon benchmark in Dollar terms since mid-December 2012 at $31.92 per Troy ounce, up 1.9% for the week but half-a-buck below Thursday's new 12-year peak.
Like gold prices, silver then fell further into London's weekend close, dipping towards $31.60.
The US Dollar meantime headed for its lowest weekly finish against the rest of the world's major currencies since mid-2023, slipping 0.3 points to 100.4 on its trade-weighed DXY Dollar Index.
Betting on the Federal Reserve's year-end interest rate level stuck at forecasting 4.12%, unchanged from last Friday and still more than one cut of 25 basis points beneath the US central bank's own projection, made as it began a new rate-cutting cycle with September's 50 bps reduction from 2-decade highs of 5.33%.
US inflation on the PCE measure slowed to 2.2% in August, new data said today, but the 'core' measure - preferred by the Fed and excluding 'volatile' fuel and food - accelerated to 2.7% per year.
US households expect inflation to read around 3.1% over the next 5 years, the University of Michigan's survey said Friday, also showing consumer sentiment at the highest in 5 months.
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