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What’s happening: Gold prices fell sharply on Monday, after recording strong gains for five straight sessions.
What happened: Gold prices had surged to their highest level in around three weeks.
Profit taking, easing geopolitical concerns and Donald Trump’s nomination of Scott Bessent for US Treasury Secretary weighed on the yellow metal.
Why it matters: Investors booked profits after gold prices recorded sharp gains over the past few trading days. Although the yellow metal had declined sharply after Donald Trump’s win in the US elections, it began a steady uptrend from November 14.
Gold prices gained around 6% last week to end Friday at its strongest level since November 6, mainly due to an escalation in the Russia-Ukraine war.
Easing tensions weighed on the yellow metal on Monday. The appointment of Scott Bessent as US Treasury Secretary also impacted gold prices.
Gold is widely considered as a safe investment amid economic uncertainty and Scott Bessent is seen as someone who could dilute Trump’s aggressive tariff plans.
Weakness in the US dollar limited the overall losses for gold on Monday, as a lower greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.7% to 106.82.
US gold futures shed $93.70, or around 3.5%, to settle at $2,618.50 an ounce. Even after the pressure on Monday, spot gold prices are up more than 27% year to date.
In other metals trading, silver futures fell more than 3% to close at $30.239 an ounce, while platinum declined by over 3% to $944.5 and palladium was down 3.5% to settle at $982.10. Copper bucked the trend and rose to close at $4.1000.
What to watch: Investors await the release of data on US GDP, core PCE and minutes from the Fed’s November meeting this week. Markets widely expect the Fed to cut interest rates by 25 basis points at their meeting in December.
Data on S&P CoreLogic Case-Shiller home price index (1800 UAE Time), new home sales (1900 UAE Time) and CB consumer confidence (1900 UAE Time) will also remain in focus today. The S&P CoreLogic Case-Shiller 20-city home price index, which fell 0.3% in August, is expected to decline by 0.1% in September. Analysts expect the consumer confidence to improve to 111.6 in November, from a previous reading of 108.7. Sales of new single-family homes in the US, which rose 4.1% to an annual rate of 738,000 in September, are projected to decline 3.6% in October.
Context: Shares of Zoom Communications fell in after-hours trading on Monday, despite the company reporting better-than-expected earnings for the third quarter.
Details: The company announced a change in its name from Zoom Video Communications to Zoom Communications.
Zoom’s quarterly revenues grew 3.6% year-over-year to $1.18 billion, topping consensus estimates of $1.16 billion. Adjusted earnings came in at $1.38 per share, surpassing Wall Street expectations of $1.31 per share. The company has now topped market estimates on both the top and bottom lines in nine consecutive quarters.
Enterprise revenues grew 5.8% year-over-year, while online revenue came in flat. Zoom said its online monthly average churn hit a record low of 2.7% during the third quarter.
Zoom closed the quarter with around 192,400 enterprise customers and $7.7 billion in cash, cash equivalents and marketable securities.
The company’s board announced the authorisation for the repurchase of another $1.2 billion of common stock.
“At Zoomtopia we announced major milestones such as AI Companion 2.0 and paid add-ons for AI Companion and industry-specific AI customization, further cementing our vision to deliver a differentiated AI-first work platform that empowers customers to achieve more than ever,” CEO Eric Yuan said.
Management guided to fourth quarter revenues of $1.175 billion to $1.18 billion, slightly higher than market expectations of $1.17 billion. They projected adjusted earnings of $1.29 to $1.30 per share, versus estimates of $1.28 per share.
Zoom raised its annual projections citing strong demand for its video conferencing software. For the full year, Zoom guided to revenues of $4.656 billion to $4.661 billion, compared to market expectations of $4.64 billion. The company expects earnings of $5.41 to $5.43 per share, versus estimates of $5.35 per share.
However, the continued decline in individuals and small businesses using Zoom concerned investor concern, as the company’s margins from these cohorts are typically higher than from corporate clients.
How shares responded: Zoom’s shares fell 5.6% to $84.09 in the after-hours trading session, following the release of quarterly results. The stock has added around 23% over the past month.
What to watch: Investors will continue monitoring rising competition in video conferencing services, with Microsoft’s Teams and Cisco’s Webex putting up a strong fight.
Other Markets: Asian indices traded mixed this morning, with the China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index up by 0.16% and 0.37%, respectively, and Japan’s Nikkei 225 down by 1.34%.
UK minister Pat McFadden warned of potential Russian cyberattacks on critical infrastructure of NATO allies. The news sent the safe-haven US dollar index higher in forex trading this morning.
South Korea’s Composite Consumer Sentiment Index dipped to 100.7 in November, from 101.7 points in the previous month, exerting pressure on the KRW/USD forex pair.
Brazil’s current account deficit widened to $5.9 billion in October, from $0.4 billion in the year-ago period, which exerted pressure on the BRL/USD forex pair.
Colombia’s industrial confidence indicator fell to -0.4 in October, from September’s reading of 1.4. However, the COP/USD pair rose in forex trading this morning.
UK’s CBI distributive trades (1500 UAE Time), Brazil’s IPCA mid-month CPI (1600 UAE Time), Canada’s wholesale sales (1730 UAE Time), US Redbook index (1755 UAE Time), FHFA house price index (1800 UAE Time), Richmond Fed manufacturing index (1900 UAE Time), Richmond Fed services revenues index (1900 UAE Time) and money supply (2000 UAE Time), as well as Argentina’s retail sales (2300 UAE Time).
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