Geopolitical tensions in the West are driving gold higher Oil and stock markets are declining again

2022-02-15T18:05:27
gold Intel Oil US indices
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Geopolitical tensions in the West are driving gold higher Oil and stock markets are declining again

Geopolitical tensions in the West are driving gold higher Oil and stock markets are declining again: Market participants are assessing the latest media reports on a possible Russian-Ukrainian war,
threatening the stability of markets, especially the stock market, which is declining day by day. 

Evest follows market developments in the following report.

Topics:

Oil is declining again because of increased geopolitical tensions

US indices are losing again

Intel is approaching the acquisition of Tour Semiconductor and the latter’s stock is rising by 48%

Gold rises to an 8-year high

 

 

Oil is declining again because of increased geopolitical tensions

Oil prices, which on Monday updated their highest level since September 2014, are again falling.

Traders still see serious risks to the market if the conflict over Ukraine escalates.

However, indices of growth in US shale oil production and expectations that Iranian oil would return to the market had somewhat eased investors’ concerns about a potential shortage of raw materials.

According to the US Department of Energy, oil production in the Permian basin exceeded 5 million barrels per day in January, breaking the record for the third consecutive month.

Brent crude futures for April fell by $0.73 (0.76%) on the London Futures Exchange, to $95.75 per barrel.

Brent crude rose by $2.04 (2.2 percent) to $96.48 per barrel on Monday.

The March futures price for West Texas Intermediate crude was lower,
in electronic trading on the New York Mercantile Exchange (NYMEX) by $0.8 (0.84%), to $94.66 per barrel.

During the previous session, the futures contract rose by $2.36 (2.5%) to $95.46 per barrel.

According to Bloomberg experts: “The relationship between Russia and Ukraine had a key role in the market.

The situation has become somewhat more clear, and the market will continue to assume a significant risk premium in oil prices.”

Last week, US National Security Adviser Jake Sullivan issued a statement saying Russia had a chance to attack Ukraine without waiting for the Beijing Olympics to end.

On Monday, Foreign Minister Sergeĭ Lavrov announced Russia’s willingness to continue talking to the West.

The United States announced the temporary relocation of the US Embassy from Kyiv to Lviv.

 

US indices are losing again

US stock indices ended Monday’s trading lower.

Traders remained focused on the geopolitical situation, given the ongoing tensions between the West and Russia over Ukraine,
as well as rising inflation in the United States and the expectation of a sharp tightening of the Federal Reserve System. 

Esther George, president of the Federal Reserve Bank of Kansas,
believes the Fed should consider selling bonds from its $9 trillion asset portfolio to solve high inflation. 

In the meantime, President of the Federal Reserve Bank of St. Louis James Ballard said last week,
that he wanted the Fed to raise interest rates by a total of 100 basis points by July 1.

Last week, Goldman Sachs experts reviewed their expectations for the number of Fed rate hikes this year,
and now expect the US central bank to raise them seven times, rather than five, as previously predicted. 

The US consumer price index (CPI) jumped 7.5% in January compared with the same month last year, the US Department of Labor reported last week.

Therefore, inflation has updated a record high since 1982.

Stock indices in Asia-Pacific countries show mostly negative dynamics on Tuesday morning.

Therefore, Japan’s Nikkei index loses 0.47%, Australia’s S & P/ASX 200 fell by 0.31%, South Korean Kospi by 0.34%,
Hong Kong Hang Seng by 0.7%, and only China’s CSI 300 grown by 0.93%.

In the meantime, US Standard & Poor’s futures rose by 0.13% compared to the previous day’s closing,

indicating a possible improvement in morale in the US stock market on February 15.

 

Intel is approaching the acquisition of Tour Semiconductor and the latter’s stock is rising by 48%

According to the Wall Street Journal, citing well-informed sources, Intel is about to buy Tour Semiconductor Ltd for $6 billion.

The companies may announce the deal early this week.

Tour Semiconductor, listed on the NASDAQ stock exchange, manufactures semiconductor components, integrated circuits used in automobiles,
consumer devices, medical and industrial equipment.

The company’s stocks rose by 48 percent in additional trading on Monday after reports of Intel’s interest in the company.

The capital of the semiconductor tower is $3.8 billion, so the deal discussed has a large premium to the market price.

Tour Semiconductor owns manufacturing facilities in Japan, as well as California and Texas.

 

Gold rises to an 8-year high

Gold rose to an 8-year high on Tuesday, as rising tensions between Russia and the West over Ukraine prompted investors to avoid high-risk assets and choose safe alloys.

Spot gold rose by 0.4% to $1877.96 an ounce, having reached its highest level since June 11 at $1879.48 earlier.

US gold futures rose by 0.6 percent to $1880.20.

According to experts, the Ukrainian crisis supported gold through the inflation channel due to high crude oil prices and through the risk aversion channel due to low inventories. 

Alloys are usually seen as a hedge against geopolitical conflicts, and with rising tensions over Ukraine,
the price of spot gold has risen by about 5% since January 31, and is set to yield gains for the 10th session out of 12 trading sessions.

US 10-year Treasury yields fell, reducing the opportunity cost of holding interest-free gold, while a slightly weaker dollar helped make the metal more attractive to overseas buyers.

The price of spot silver fell by 0.2% to $23.79 per ounce, platinum fell by 0.1% to $1026.86, while palladium fell by 0.4% to $2349.82.

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