GOLD
Gold prices are trading nearly flat as Tuesday's session begins in Europe. The precious metal's price appears to have stabilised after a nearly 1.5% drop on Monday, triggered by traders hurriedly closing positions to meet margin calls elsewhere. Tuesday presents a different picture, with Asian markets recovering and setting the stage for a similar trend elsewhere. However, bullion prices are still not showing much upward movement. With treasury yields and the US dollar recovering some of their recent losses, gold prices have yet to rebound. Nonetheless, once the dust settles and traders' nerves calm, there could be potential for gains in the precious metal's price. Recession fears will likely lead to a more dovish Federal Reserve, resulting in lower treasury yields and a weaker dollar, creating a favourable scenario for bullion prices.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Equities in Europe rebounded on Tuesday, mirroring the global trend, as a sense of relief now prevails among riskier assets following yesterday’s sharp sell-off. The strong bearish price action observed on Monday, which brought many benchmarks close to correction territory, has now subsided, at least temporarily. Calm is returning to the markets, pushing safer havens lower, while risk appetite grows back after stock indices hit major long-term support levels.
Fears of a US recession have been partly offset by more robust US ISM data than expected, while Fed officials also moved to reassure investors, saying rate cuts were highly likely for the next FOMC meetings. With no significant change in the fundamentals, many traders will seize this opportunity to take advantage of discounted prices on share markets to buy the dip provided by yesterday’s turbulence.
This situation can be clearly seen as the STOXX-50 index successfully rebounded over a long-term double support level provided by its long-term bullish trendline and with an overlap on the last market top registered a year ago.
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.