Today’s headlines

What’s happening: Gold prices moved higher on Thursday, after recording losses for three straight sessions.

What happened: Gold has lost more than $50 after reaching the $2,000 mark last week with escalating geopolitical tensions providing a boost to safe-haven assets.

Growing speculations of an interest rate cut by the US Federal Reserve next year increased the demand for zero-yield bullion.

Why it matters: Heightened geopolitical unrest has been lending support to safe-haven assets over the past month. Investors increasing the percentage of safe-havens in their portfolios sent gold prices past the key resistance level of $2,000 last week.

The sharp rally in gold prices triggered some profit taking, exerting pressure on the yellow metal earlier this week.

Gold prices moved higher on Thursday, despite strength in the US dollar. The US dollar index, which measures the greenback’s performance versus a basket of major peers, added around 0.3% to reach 105.91 on Thursday. A strengthening US dollar generally exerts pressure on gold prices, as this makes the yellow metal more expensive for foreign currency holders.

Investors now await the US Federal Reserve’s interest rate decision. The yellow metal is typically highly sensitive to interest rates, as higher rates increase the opportunity cost of holding the non-yielding bullion.

Markets widely expect the US Federal Reserve to keep rates unchanged at its December meeting and begin cutting rates as early as June 2024.

Gold for December delivery gained $12 to close at $1,969.80 per ounce on Thursday, while silver for December delivery added 18 cents to $22.91 per ounce.

In other commodities trading, copper prices came in flat at $3.64 per pound, while platinum fell to $862.80 and Palladium settled lower at $1009.10 on Thursday.

What to watch: Investors will continue monitoring comments from Fed officials. The US dollar and Treasury yields will also remain in focus.

The markets today

Illumina will be in focus today after releasing results for the third quarter

Context: Illumina’s shares fell in the after-hours trading sessions on Thursday, despite the company reporting better-than-expected quarterly earnings.

Details: The San Diego, California-based company had indicated weak demand for its diagnostics products and genetic testing instruments amid the slow rebound in the Chinese economy and lower consumer spending due to elevated interest rates.

Sales at the company’s core business came in at $941 million in the latest quarter, below market expectations of $963.80 million. Total revenues came in almost flat at $1.12 billion, slightly missing the consensus estimates of $1.13 billion. Illumina reported adjusted earnings of 33 cents per share, topping Wall Street expectations of 12 cents per share.

The company recognized $712 million in goodwill and $109 million in intangible asset impairment associated with the Grail segment in the third quarter.

Management lowered their full-year adjusted profits to between 60 cents and 70 cents per share, from its earlier outlook of 75 cents to 90 cents per share. The company said it expects consolidated revenues to decline 2%-3% in fiscal 2023.

“While I evaluate the company’s strategy, we will remain focused on driving on further placements of the NovaSeq X, which will boost consumables demand. We will also continue optimizing our operations and drive stronger execution,” CEO Jacob Thaysen said during the earnings call.

How shares responded: Illumina’s shares fell 9.7% to $96.66 in after-hours trading on Thursday, following the release of quarterly results. The stock lost around 23% over the past month.

What to watch: Investors will continue monitoring the company’s Grail segment, as the deal for its cancer test developer is facing increased pressure from regulators.

Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.73%, 0.81%, 1.13% and 0.84%, respectively.

The news shaping the markets

Russia asked Pakistan to return helicopter engines due to the protracted conflict in Ukraine. The news sent the RUB/USD slightly lower this morning.

Indonesia’s motorbike sales fell by 4.0% year-over-year to 516,300 units in October, versus a 0.9% decline a month ago. However, motorbike sales grew 1.2% on a monthly basis, which lent support to the IDR/USD forex pair.

New Zealand’s BusinessNZ performance of manufacturing index fell to 42.5 in October, from 45.3 in the previous month. This being the weakest reading since May 2020 sent the NZD/USD pair lower in forex trading this morning.

The Bank of Mexico kept its benchmark policy rate unchanged at 11.25% at its recent meeting, lending support to the MXN/USD forex pair.

The Reserve Bank of Australia projected that the country’s inflation will return to its 2-3% target by the end of 2025, which sent the AUD/USD pair lower in forex trading this morning.

What else to watch today

Turkey’s industrial production, unemployment rate and labour force participation rate, UK’s GDP growth rate, business investment, goods trade balance, industrial production, manufacturing output, balance of trade and construction orders, Italy’s industrial production, India’s foreign exchange reserves and industrial production, Brazil’s consumer price index and industrial entrepreneur confidence index, Mexico’s industrial production, Russia’s balance of trade and inflation rate, US University of Michigan consumer sentiment, Baker Hughes crude oil rigs and IBD/TIPP economic optimism index, China’s vehicle sales, new yuan loans, money supply M2, value of loans and total social financing, as well as Spain’s consumer confidence.