GOLD
Gold prices edged down amidst low trading volumes early Wednesday as traders focused on this Friday’s release of US PCE data. Personal Core Expenditure, considered the Fed’s favourite inflation gauge, is likely to impact the Federal Reserve’s stance on interest rate cuts, especially if the reading surprises. Markets have leaned towards the greenback following the release of economic data highlighting the resilience of the US economy, creating room for the Fed to maintain elevated interest rates for longer. This scenario supports higher treasury yields and a stronger dollar, penalising the non-yielding precious metal. Against this backdrop, gold prices will likely remain supported above the $2,300 level but with limited upside, at least until Friday’s PCE data release.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Stocks climbed higher in Europe on Wednesday as market sentiment strengthened due to bets on dovish monetary developments in the Euro area. Risk appetite is rising on the old continent despite lingering political uncertainty, as investors cheered on the latest comment from ECB official Olli Rehn, who sees two rate cuts in the euro area this year.
This gives investors more clarity regarding monetary policy and is seen as a significant bullish catalyst for stock traders. The STOXX-50 index gets ever closer to the 5,000pts mark, still trading inside its short-term bullish channel, led higher by all sectors, with top movers found in the tech sector following the sharp rebound registered by NVIDIA at the end of the US trading session yesterday.
We expect market volatility to remain high in Europe for the second half of the week, as investors await more macro developments brought by key macro data in the US, with the highlight put on the latest PCE Price Index release on Friday.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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