Market Update: Gold Prices Rise as Inflation Persists, Cryptocurrencies and Equities Fluctuate
Gold prices rose on Wednesday, with spot gold up 0.7% at $2,016.92 per ounce and US gold futures rising 0.7% to $2,032.40. The rise in gold prices comes as US core inflation slows down only slightly, keeping the Federal Reserve on track to hike interest rates. However, core CPI, which excludes volatile food and fuel prices, remained stubbornly high, putting a lid on expectations of a less hawkish Fed.
In the world of cryptocurrencies, Bitcoin and Ethereum prices rose by over 5% and 9%, respectively. Brent crude fell 5 cents at $85.57 a barrel, while US West Texas Intermediate fell 6 cents to $81.48 a barrel. The S&P 500 index closed at 4,108.94 with a loss of less than one point. Closing at 12,031.88, the Nasdaq experienced a decline of 52.48 points. In the meantime, the Dow concluded trading at 33,684.79 after a rise of 98.27 points.
In Asia, South Korea’s benchmark Kospi was 0.8% lower at 2531.07 in early trade as battery and semiconductor stocks retreated. Despite March’s easing and concerns of a recession, sentiment is being impacted by U.S. inflation remaining significantly higher than pre-pandemic levels. At 1,327.00, the USD/KRW rose by 0.1%, resulting in foreign investors being net sellers. Following recent increases, several investors were still cashing in on their battery and chip stock profits. After U.S. data showed inflation continuing to remain higher than pre-pandemic levels, other Asian equities saw significant losses, with Hong Kong’s Hang Seng Index falling by 1.7% to 19964.27. According to UOB analysts, the focus would be on China’s most recent trade data. They stated that the growth in imports is expected to shift back to contraction territory, with a decline of 6.4% on a yearly basis, following a surprise increase of 4.2% in the previous month. After a year of suspension, Sunac China resumed trading and experienced a significant drop, with a 47% decline leading the way. Following reports that Japanese tech giant SoftBank Group is looking to sell almost all of its holding in Alibaba Group, the Chinese company’s stock fell by 3.9%.
Overall, the markets continue to be volatile as investors try to navigate the impact of inflation, recession fears, and the ongoing pandemic. Gold prices, which are often seen as a hedge against inflation, may continue to rise as investors seek safe-haven assets. Meanwhile, the cryptocurrency market remains highly volatile, with Bitcoin and Ethereum prices fluctuating wildly. As always, investors should exercise caution and consult with their financial advisors before making any investment decisions.
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