March 2024 Wrap Up

What were the key moments in the market this month?

India’s forex reserves reach for the sky

According to the Reserve Bank of India (RBI), India’s foreign exchange reserves surged by $10.47 billion to reach $636.1 billion for the week ending on March 8. This marks the largest increase since July 14, 2023. The previous week saw a rise of $6.55 billion, bringing the reserves to $625.63 billion by March 1, 2024. The data was disclosed in the Weekly Statistical Supplement released by the RBI.

The RBI engaged in purchasing dollars in the spot market, possibly to accommodate significant inflows of debt and equity, according to traders. The increase in reserves coincided with a rise in gold valuation, which climbed to $50.72 billion from $48.42 billion in the previous week.

Oil prices keep their cool

Oil prices rose by approximately 2% to reach their highest level in four months. This increase was attributed to reduced crude exports from Iraq and Saudi Arabia, as well as indications of heightened demand and economic expansion in both China and the United States.

Iraq, OPEC’s second-largest oil producer, announced plans to decrease crude exports to 3.3 million barrels per day (bpd) in the upcoming months to offset surpassing its OPEC+ quota since January. This commitment translates to a reduction of 130,000 bpd compared to the previous month’s shipments. Over January and February, Iraq exceeded its output target set in January when OPEC and its allies, including Russia (referred to as OPEC+), agreed to stabilize the market. 

China starts year with a bang

China’s economic performance in the initial two months of the year surpassed analysts’ expectations in all areas. Retail sales outperformed expectations, rising by 5.5%, surpassing the forecasted 5.2% increase in a Reuters poll. Meanwhile, industrial production saw a significant uptick of 7%, compared to the estimated 5% growth. Fixed asset investment also exceeded predictions, growing by 4.2% instead of the anticipated 3.2%. 

In a report issued after the data release, analysts at Goldman Sachs expressed their belief that China sustained robust sequential growth momentum in the first quarter, despite noticeable divergences among sectors.

Gold gleams as dollar dips

Gold prices climbed, propelled by a weakened dollar, as investors clung to expectations of a Federal Reserve rate cut in June, notwithstanding robust U.S. inflation data. Meanwhile, escalating geopolitical tensions continued to bolster demand for gold as a safe-haven asset.

Spot gold rose by almost 0.9% to reach $2,176.06 per ounce, while U.S. gold futures climbed by 0.7% to $2,181.80. The dollar index decreased by 0.2%, resulting in gold becoming more affordable for international buyers.

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