Gold and Stocks Closed Lower as Oil Spike and Rising Yields Stoke Inflation Fears
Precious metals as well as U.S. equities went lower after Thursday trading session, pressured by a sharp rise in oil prices as well as the Treasury yields, as investors grew increasingly anxious regarding the increasing inflation, and the fallout from the extended US-Iran conflict.
Gold spot price went lower today, at a risk of breaking lower than $4,300 per troy ounce. Silver spot price also went lower, and it closed below $64 per troy ounce. Meanwhile, U.S. equities didn't have a better day either.
DJI shed 316.56 points, or 0.6%, ending the day at 52,064.10. The S&P 500 slipped 0.58% to settle at 7,591.70, and the Nasdaq Composite lost 0.65%, closing at 26,081.72.
Crude prices remained a drag on market sentiment as the US-Iran war stretched into its seventh month. West Texas Intermediate, the US crude benchmark, jumped almost 6% to close around $100 per barrel, while Brent, the international marker, climbed over 6.7% to close over $106.
Adding to the pressure, fresh producer inflation data came in hot. The PPI climbed 0.4% from the prior month in August and 5.4% year-over-year, a pickup from July's upwardly revised annual figure of 4.8%.
Stripping out energy, trade, and food, producer prices rose 0.3% monthly and 4.7% annually.
Energy costs alone jumped 4.2% for the month, fueled in part by a 24.1% spike in diesel prices, a trend that's raising worries that persistently high energy costs might elevate inflation, and factor into the Fed's next rate hike possibilities.
Related assets: Gold, Silver, Palladium, Platinum, Crude Oil, Brent Crude