Gold prices rose amidst fears of Russian intervention in Ukraine
Gold prices rose during early Monday trading as risk aversion continues to grow amongst investors. A Russian military intervention in eastern Ukraine could be imminent, a scenario that may lead to increasing difficulties in the supply of energy and even greater animosity between the west and Vladimir Putin’s Russia. Meanwhile, with inflation remaining a worry, investors are awaiting this week’s Federal Reserve meeting with some concern, fearing a further hawkish tilt by the US central bank, which, if confirmed, would be likely to create more downside for risk related assets. This conjecture looks supportive for gold, but it is also supportive of the US dollar and the inverted correlation between the two assets could cap the scope for greater gold gains as risk aversion gains traction on the markets.
Ricardo Evangelista – Senior Analyst, ActivTrades
European shares drifted lower, alongside Asian stocks, as market sentiment remains weighed down at the beginning of the week. Uncertainty reigns following last week’s sell-off and ahead of an extremely busy agenda this week. All eyes will be on the macro front as investors wait for new market drivers before taking significant decisions with their trading strategies. Even if EU PMI, BoC decision on rates, as well as the batch of major US data – including GDP, jobless claims and durable goods releases – will keep investors’ minds busy, most of this week’s focus will lay around the FOMC meeting on Wednesday. Last week’s important bearish corrections on most benchmarks can be seen as a sign the hawkish switch from the Fed was already being priced in. That said, Fed Chairman Jerome Powell’s words will be cautiously analysed in order to get more clues about the schedule and pace of incoming rates hikes and balance sheet reductions, which is likely to spark increased volatility towards riskier assets. Meanwhile, the earning season continues to roll and investors will cautiously monitor results from Apple, Boeing, Tesla, Microsoft, Samsung and Deutsche Bank due later this week.
Pierre Veyret– Technical analyst, ActivTrades
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.