Market Analysis

Gold is starting the week on the front foot


Gold is starting the week on the front foot, with prices holding above the $1,660 level. The precious metal is finding support amidst a climate of global uncertainty that enhances its haven appeal. As inflation forces the hand of central banks to raise interest rates even though growth remains stagnant, continued economic concerns are weighing on the sentiment of investors, leading to a drop in risk appetite that benefits traditional refuge assets such as gold. The US dollar has also helped; the greenback eased down from the 20-year maximums reached last week, creating upside for bullion because of the inverted price correlation between the two assets. However, despite today’s gains, the path for gold prices remains uncertain. Central banks are expected to continue to hike rates, in a dynamic that is likely to drive up bond yields and penalize the non-yielding precious metal.

Ricardo Evangelista – Senior Analyst, ActivTrades



Source: ActivTrader


Share markets fluctuated in Europe on Monday, following the mixed trading session registered overnight in Asia, as traders start their week on a cautious note.

The bearish sentiment remains towards riskier assets as investors are weighed down by lingering inflation fears and tightening monetary conditions ahead of another busy week on the macro front. However, today’s volatility seems to be mostly due to the prospect of a record oil output cut from OPEC+ countries this week, with indication that more than 1 million barrels a day could be slashed. This news is already boosting oil prices as well as oil-related shares, preventing stock indices from registering new lows following last week’s sell-off extension.

That said, investors remain very cautious with equities so far, especially ahead of another batch of major macro news this week (PMIs, PPIs, OPEC meeting, speeches from Central banks’ officials and US NFP) while corporates earnings loom next week.

The DAX-40 index still trades inside its bearish mid-term channel, while the RSI doesn’t show any early signs of a bullish break-out to come and the DMI indicates an environment still under bearish pressure.


Pierre Veyret– Technical analyst, ActivTrades           


Source: ActivTrader



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