GOLD
Gold prices dipped slightly during early Tuesday trading but continue to hover near last week's all-time high. In recent sessions, the price of the precious metal has shown a nearly perfect inverse correlation with that of the US dollar, with gains in bullion reflecting losses in the greenback. Today, we observe a similar pattern. Mixed labour data released on Friday and hawkish comments from Fed officials have tempered some of the optimism that had dominated the markets, allowing the dollar to recover some of last week's losses and creating resistance to further increases in gold prices. However, with the Federal Reserve poised to begin unwinding its restrictive monetary policy and geopolitical tensions, along with concerns over global economic growth, driving haven demand, the downside for gold prices is limited, and they are likely to remain supported around current levels.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Equities traded higher in Europe on Tuesday, rebounding over fresh support zones ahead of today's US inflation report.
Most European benchmarks were on the rise this morning, led mainly by energy and tech shares, as appetite for risk remained intact following German CPI data matching expectations.
The technical pull-back of the pan-European STOXX-50 index over 4,920.0pts occurred, as expected following the new all-time high registered by the market on last week.
Even if most traders and analysts don't expect any significant inflation improvements or dovish monetary switch in the mid-term, this week's batch of macro data may still bring more volatility to the markets.
Today will be particularly busy as investors brace for the US CPI report, ECB member Robert Holzmann's speech, and the EU Finance ministers' meetings in Brussels.
The market still trades above its bullish trendline, with no reversal sign in sight yet. For the very short term, a second challenge towards the last top registered last Thursday remains possible.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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