Negative Trend in Markets Caused by Fed and Middle East
Global markets started the week with declines due to the Fed's potential rate hike and geopolitical risks in the Middle East.
Global financial markets made a negative start to the new week under the pressure of expectations regarding a U.S. Federal Reserve interest rate hike and escalating geopolitical tensions in the Middle East.
Markets Start the New Week with Declines
Markets made a negative start to the new week under the influence of expectations for an interest rate hike by the U.S. Federal Reserve and ongoing tensions in the Middle East.
Fed Policies and Interest Rate Expectations
Speaking at the Jackson Hole Economic Policy Symposium, Fed Chair Kevin Warsh stated that additional steps in monetary policy might be needed if inflation does not recede to the targeted level. Warsh's remarks raised the probability of a September rate hike to 60 percent in money markets, reducing risk appetite.
Geopolitical Tensions and Brent Crude
The U.S. military's strike on Iran's Lark Island and mutual moves by the parties increased selling pressure in global markets. Amid concerns that oil supply in the region would be disrupted, the price of December Brent crude oil futures rose by 5.6 percent to as high as $90.95 per barrel.
US Dollar Index and Movements in the Foreign Exchange Market
Having climbed to the 99.7 level on Friday to reach its highest level since August 14, the dollar index retreated by 0.1 percent to the 99.6 level in the new trading session.
Declines in Gold Prices
Following Fed Chair Warsh's statements, the ounce price of gold dropped by 0.8 percent to $4,420. This downward movement in ounce gold directly affected domestic gold prices as well.
Gram Gold Falls Below 7 Thousand TL
Gram gold, which climbed above 7 thousand liras last week, retreated under the influence of declines in the ounce price, falling below 7,000 TL. Trading down 0.04 percent yesterday at around 6,905 TL, gram gold fluctuated between 6,822.09 TL and 6,939.18 TL during the day.