Market Analysis

Gold hedges down, pressured by hawkish Fed



Gold prices hedged down during early Wednesday trading, remaining under pressure from an increasingly hawkish Federal Reserve. The non-yielding precious metal is losing appeal as the US central bank’s commitment to control inflation through tighter monetary policies is creating a dynamic that has pushed yields on the 10-year treasury note to levels close to 3%. At the same time, the Fed’s drive to tighten policies also offers support to the US dollar, with the greenback remaining close to the 20-year high watermark reached during the previous week, a scenario that also penalizes gold prices due to the inverted correlation with the dollar.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader


Stocks were little changed in Europe on Wednesday – despite Asian shares extending yesterday’s gains by closing in the green overnight – as market operators brace for a busy day.

Most EU benchmarks trade towards their opening price, with utilities paring losses from the real estate sector, marking a pause in the current very short-term rally on stocks. This week’s growing appetite for riskier assets is mostly due to “technical” reasons rather than any major economic breakthrough, as investors reduced their exposure to treasuries in order to seize the opportunity of much more attractive prices on stocks. However, this “buy the dip” move may be short lived as market operators will need solid macro developments before driving markets in a more directional trend. Traders are waiting for the next EU CPI print, due later this morning, as well as the G7 Finance minister and Central bank meeting to have a better assessment of the economic conditions in Europe.

The DAX-40 index registered one of the worst performances today as the market trades below 14,150.0pts, in a corrective move following the recent clearing of its bearish mid-term trendline.

Pierre Veyret– Technical analyst, ActivTrades

Source: ActivTrader


The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.

All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.

Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.