Gold Holds Losses as Market Caution Caps Safe-Haven Appeal

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Oil prices remained steady on Friday, poised for a weekly gain amid optimism that China’s economic stimulus measures will support recovery. However, a stronger U.S. dollar limited upward movement.  

Brent crude futures edged down by 2 cents to $73.24 per barrel as of 0535 GMT, while U.S. West Texas Intermediate (WTI) crude slipped 1 cent to $69.61 per barrel. Despite the slight declines, Brent rose 0.4% for the week, and WTI gained 0.2%.  

The World Bank recently revised its forecasts, projecting stronger economic growth in China for 2024 and 2025. However, it highlighted that low household and business confidence, coupled with challenges in the property sector, would remain obstacles. China, the largest global oil importer, increased its 2023 GDP estimate by 2.7% but noted that the adjustment would have minimal impact on this year’s growth.  

To stimulate its economy, China is set to issue 3 trillion yuan ($411 billion) in special treasury bonds next year, according to Reuters.  

Meanwhile, the U.S. dollar’s strength continued to weigh on oil prices. The greenback, which has climbed approximately 7% this quarter, reached a near two-year high against other major currencies after the Federal Reserve signaled a slower pace of rate cuts in 2025. A stronger dollar makes oil more expensive for buyers using other currencies.  

On the supply side, U.S. crude stockpiles fell by 3.2 million barrels last week, according to the American Petroleum Institute. Analysts anticipate the U.S. Energy Information Administration (EIA) report, due at 1 p.m. EST (1800 GMT) on Friday, will confirm a drop of approximately 1.9 million barrels. Gasoline and distillate inventories are also expected to decrease by 1.1 million barrels and 0.3 million barrels, respectively. The release of EIA data was delayed due to the Christmas holiday.

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