Daily Dose of financial insights for investors and traders: Gold glitters on recession concerns, Energy crisis back on the agenda

Daily Dose of financial insights for investors and traders: Gold glitters on recession concerns, Energy crisis back on the agenda

Jessica Amir
Market Strategist

Summary:  Daily Dose of financial insights for investors and traders for the week ending, December 2. Why gold stocks hit their highest level since July, with the gold price jumping 2%. Why the energy crisis continues; Santos lost an appeal to start a gas project, and a coal company in Australia slashed its output target amid La Nina rains impacting production. What the next catalysts are for markets. WATCH this five minute video.

December 2 2022

Markets rally, on inflation easing. ASX200 at a seven month high

Aussie share market had it worst day in about four weeks, falling 0.7%on Friday. But despite that, as they say the long term trend is your friend; the ASX200 closed off the week at its highest level in 7 months. The market has gained about 13% from October. Over the week; the market held onto a gain of 0.6%; and the ASX200 is just 4% away from its record all time high. What’s supported markets you might ask? Well economic data this week showed inflation pressures are easing for now. Both in the US and Australia. This offers hope to mortgage holders, corporates and equity markets. Hope that the US central bank, the Fed, won’t need to be so aggressive with rate hikes in two weeks. And in Australia; there’s hope the RBA can potentially stop hiking rates later next year. So markets are forwarding looking, and this is what has been supporting equity markets for now.

Big market moves; gold equites shine   

Today was all about all that glittered. Gold. Gold stock ripped higher hitting their highest level since July; St Barbara rose 10% after an investment firm bought a major stake in the gold miner. Silver Lake rose 6%. with other gold miners following. It’s all because the gold price made its best weekly gain in four weeks, up 2% today and this week. Remember, gold, the safe haven metal, traditionally does well when times are tough. And overnight the US economic slowdown gained pace with constructions and manufacturing data slowing. The US manufacturing sector fell into a contraction for the first time in two years. So this supports the Fed not being so aggressive with rate hikes. That supports the US dollar potentially continuing to fall. And this supports gold moving up.

Economic news in Australia gives the RBA more room to stay dovish 

On the economic news front in Australia, Home loan data showed lending is continuing to fall and much more than expected. Home loans fell 2.7% in the month, following the 8.2% drop last month. We think home loan demand will continue to fall and that this will continue to pressure property prices into 2023.

Company news

Santos lost a court appeal to restart a $3.6 billion gas project, as Indigenous groups were not properly consulted on the plan.

Also in energy news, coal producer Coronado cut its production target for the year, as rain from La Nina has prevented it from getting as much coal of the ground that it wanted to.

The takeaway here, is that Australia will continue to grapple with a lack of physical energy supply. Which is why we think energy prices will continue to rise next year. The RBA is also of the same view. 

What to look for in coming days

In the US; the final monthly employment report will be released before the Fed’s next interest rates decision. So tonight what’s released is non-farm payrolls. The market is expecting 200,000 jobs were added to the US in November, which is 60,000 less than October.

On December 4; The Organization of the Petroleum Exporting Countries (OPEC) and their allies meet. Although a policy change is seen as unlikely.

In Australia next week; the RBA meets on Tuesday. A 0.25% hike is expected. 

The Australia Dollar continues to rally 

The AUDUSD trades up about 10% from its October low, supported by the fact that China's 3rd biggest city is easing restrictions. 



For a weekly look at what to watch in markets - tune into our Spotlight.

For a global look at markets – tune into our Podcast.



 

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/en-ch/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/en-ch/legal/saxo-select/saxoselect-disclaimer)

Saxo Bank (Schweiz) AG
Beethovenstrasse 33
CH-8002
Zurich
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.