Gold (GC=F)
Gold prices have climbed to a new record high on Wednesday as the World Gold Council is seeking to launch a digital form of the precious metal. The move could revolutionise London’s $900bn physical market for gold by creating a new way to trade, settle and collateralise bullion.
In an interview with the Financial Times, David Tait, chief executive of the World Gold Council said that the new format would create the ability to “pass gold digitally around the gold ecosystem, as collateral, for the first time”.
He added: “We are trying to standardise that digital layer of gold, such that the various financial products used in other markets can be used in the gold market going forward,” said Tait, a former banker. “My goal is that many asset managers around the world will suddenly look at it differently.”
It comes as investors also seek out a safe haven following a recent selloff in equity and bond markets and ongoing global economic uncertainty.
The spot price rose 0.4% on Wednesday to hit $3,546.99 per ounce, narrowly higher than Tuesday’s peak, and on track for its seventh daily rise in a row.
It also comes as the prospect of US interest-rate cuts boosts the metal’s appeal after Federal Reserve chair Jerome Powell cautiously opened the door to a reduction.
Prices have advanced around 5% over the past seven sessions, underpinned by increased haven demand amid renewed worries over the Federal Reserve’s future and concerns about sovereign debt levels in developed-world countries.
It has risen more than a third this year, making it one of the best-performing major commodities. Silver’s surge has been even sharper, with the price edging further above $40 an ounce this week.
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Oil (BZ=F, CL=F)
Oil (BZ=F, CL=F) prices fell by more than 1.5% on Wednesday ahead of an upcoming meeting of OPEC+ producers that is expected to consider another increase in production targets in October.
Brent crude (BZ=F) fell to $67.98 a barrel at the time of writing while US West Texas Intermediate crude (CL=F) fell 1.9%, to $64.32.
It comes as eight members of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) will consider further raising oil production at a meeting on Sunday, two sources familiar with the discussions told Reuters.
The boost would mean that OPEC+, which pumps about half of the world’s oil, would be starting to unwind a second layer of output cuts of about 1.65 million barrels per day, or 1.6% of world demand, more than a year ahead of schedule.
