Gold and Oil Stay Solid Amid Escalating Geopolitical Issue
Dalal Street Investment Journal|22 April, 2024
A boom in select commodities has threatened the central banks' inflation fight and interest rate cuts and now the gloves are coming off for them as they try to tame inflation
Gold and Oil Stay Solid Amid Escalating Geopolitical Issue

A hotter-than-expected US core Consumer Price Index (CPI) reading, driven by rising petrol and electricity prices, has thrown a wrench into plans for potential interest rate cuts. This, coupled with a broader commodities boom, is complicating efforts to combat inflation and could delay any significant reduction in borrowing costs for the foreseeable future.

Oil prices rise as China's growth and Middle East tensions add fuel

Oil prices continued their upward trajectory in the past fortnight, reaching their highest levels since October 2021. This surge can be attributed to two key factors: stronger-than-expected economic growth in China, the world's biggest oil importer, and heightened tensions in the Middle East following Iran's missile and drone attack on Israel. China's robust 5.3 per cent GDP growth in the first quarter is a positive sign for policymakers, but weaknesses in other indicators like property investment and retail sales highlight underlying demand concerns within the Chinese economy.

This story is from the 22 April, 2024 edition of Dalal Street Investment Journal.

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This story is from the 22 April, 2024 edition of Dalal Street Investment Journal.

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