GOLD
Gold prices dipped in early Tuesday trading, sliding further from the all-time high reached earlier in March, yet lingering near the $2,150 support threshold. The retreat in the precious metal's value is tied to the strengthening of the US dollar. This morning, the greenback reached a multi-week peak, signalling market anticipation of a hawkish stance from the Federal Reserve, potentially bolstering the dollar's standing. As the US central bank concludes its March meeting tomorrow, traders anticipate interest rates will remain unchanged. Nevertheless, persistent inflation and the robustness of the US economy suggest that the Fed may uphold its tight monetary policy for an extended period. In this context, the dollar's risk remains skewed to the upside, limiting the potential for gold price appreciation.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European stocks edged slightly higher this morning, paring some of yesterday’s losses, and most benchmarks pulled back towards support levels amid decreased risk appetite.
Market sentiment continued to cool down on equities as investors followed the development in Japan, where the BoJ proceeded with its first hawkish monetary move since 2007. Meanwhile, investors braced for tomorrow’s big day on the macro front.
Traders will have a lot to digest on Wednesday, and all eyes will be on UK CPI data, speeches from ECB officials, including President Christine Lagarde, and the FOMC rate decision and press conference.
With that in mind, it is no surprise to witness a certain lack of direction in today’s price action as uncertainty tends to rise ahead of such big events.
Technically speaking, the mid-term bullish rally on the STOXX-50 index has officially ended after the market broke out the lower bound of its bullish channel started mid-january.
Prices are however reacting well to their first support level around 4,990.0pts so far, thanks to energy and financial shares, leading them to a lateral consolidation.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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