The combination of a stronger greenback and rising inflation expectations saw gold sink to a seven-week low today, at $1,224.30. That’s down -1.46% for the day and represents close to a 10% fall over 12 months.
The stronger dollar was supported by bullish domestic manufacturing activity with the ISM purchasing managers index hitting 57.9 in June compared to 54.9 in May. Sterling fell -0.60% in part-response to $1.2937.
Meanwhile oil was stirring: Brent crude surged more than 3% today to $49.38 thanks in part to bearish production sentiment and new US government data indicating a crude output fall in April; poor weather in the Gulf of Mexico was another factor.
On the cusp of the Fourth of July holiday, momentum is very much with the black stuff.
- UK FTSE 100 7,377.09 +0.88%
- Dow 21,546.48 +0.92%
- S&P 500 2,436.53 +0.54%
- Nasdaq 6,143.93 +0.05%
- Nikkei 225 20,055.80 +0.11%
- DAX 12,456.73 +1.07%
- CAC 40 5,189.09 +1.34%
- Gold 1,225.20 -1.38%
- Oil WTI 46.59 +1.22%
US confidence – and car sales – revs higher
Complimenting the better US manufacturing data was consumer confidence in the shape of US stronger car sales. Ford sales figures were better than expected – or rather the Ford sales downturn was better than feared – while Toyota sales surged 2.1% in June. There was also a 0.8% climb for Honda.
However GM sales fell 4.7% compared to expectations of a 3.4% dip. Some of the poorer performing players are still being hit by less demand for traditional saloons as SUV sales continue to entrench themselves on US driveways. The showroom deals will likely continue as the 4th of July celebrations get under way.
Keeping with thing automotive, Tesla’s highly anticipated $28,000 Model 3 goes on sale on Friday though production-ready models won’t arrive until the end of the year.
Hinkley point delayed – again
More concern for Hinkley Point. French energy player EDF now claims the cost of completion will be close to 10% more than the original estimate, hiking the total cost to £19.6bn. The government gave the go-ahead for the project last September.
But it’s a project beset by controversy: EDF is arguing that extra UK regulator costs have added to the total overheads. Worse, the completion end date has been extended to 2027 (though at one point, back in 2007, a 2017 completion date was aired).
Oil stocks and FTSE 100 supported by oil price gains
The hike in oil prices helped the FTSE 100 end Monday higher at 7,377.09, up 64 points. Glencore, Anglo American and Rio Tinto all surged, up 4.81%,4.10% and 4.01% respectively. RBS shares were also up strongly, climbing 3.4%. Morrisons shares fell back -1.82%.
Breaking news: US stocks hit new record with the Dow Jones arriving at 21,543.08.