GOLD
Gold prices edged up in early Tuesday trading and are approaching the all-time high reached last December. Concerns surrounding global economic prospects, geopolitical tensions, and shifting expectations towards earlier interest rate cuts have fuelled increased demand for the precious metal, leading to its upward price trajectory. Of these factors, US interest rates stand out as the primary risk factor influencing gold prices, with the potential upside constrained by uncertainty surrounding the Federal Reserve's plans to unwind its restrictive monetary policy. Given this backdrop, this week's data releases, including US services PMI and labour figures, along with Jerome Powell's testimony to the US Congress, will be closely monitored by traders, likely impacting gold prices accordingly.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European shares opened mixed on Tuesday, extending the uncertain sentiment registered during the Asian trading session amid rising economic uncertainties.
The trend started overnight by Asian benchmarks, was brought by mixed feelings from investors following announcements made during China’s National People’s Congress, and has set the stage for today’s mood.
Indeed, while new economic targets were seen as positively ambitious from China, investors were disappointed to see a lack of significant fiscal reforms.
This situation increased market volatility on Asian benchmarks and made investors somewhat cautious after the opening bell in Europe, as many are bracing for US data in the afternoon (PMI and ISM Non-Manufacturing) and the highly awaited semi-annual testimony from Jerome Powell.
The Fed Chairman is widely expected to maintain a hawkish stance and say the FOMC is in no hurry to cut interest rates, explaining the current risk-off approach on equities. However, this trading stance could dramatically change in the afternoon following a potential reversal price action after the news, or even more if Jerome Powell brings a dovish surprise to his statement.
The STOXX-50 index is trading above its bullish trendline, just below the 4,900.0pts level.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTarder
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