Towards the end of the week, the commodity market displayed gloomy news with a decline in the value of gold assets and also crude oil in the global market.
Gold fell to a new low of more than 1 month near $1,700 due to the strengthening factor of the US dollar since the end of last week after the Federal Reserve (Fed) is seen to continue aggressive policy tightening with the expectation of a 75 basis point rate hike for the third time in a row at the September FOMC meeting .
Although gold assets are seen as an investment of choice for investors as an inflation-proof asset, the high interest rate increase factor will increase the cost of gold storage.
However, gold has a chance to rise at the end of the week with expectations that the US dollar has the potential to weaken on the release of the US NFP jobs data report which is expected to be dismal.
The latest decline in the value of gold is the lowest in 6 weeks after the lowest level was reached on July 21 at around $1,680.
Meanwhile, crude oil prices continued to decline on Thursday trading driven by factors of increased supply and slow demand.
The price of US WTI crude oil has dropped to around $94.5 while Brent oil has fallen to $88.5.
Concerns about the global economy will increase the risk to demand after previously being affected by movement restrictions in China due to the spread of Covid-19 in addition to the heat wave that hit the Great Wall country.
Manufacturing activity in China also recorded a contraction based on the latest data release in the Asian session this morning for August readings showing the economy is struggling to maintain momentum.
Crude oil production by the Organization of the Petroleum Exporting Countries (OPEC) and the United States has been increased to the highest level since the pandemic.
OPEC production reached 29.6 million barrels per day for the most recent months, while US oil production rose to 11.82 million barrels per day in June, both reaching their highest levels since April 2020.
