GOLD
Gold prices edged up in early Wednesday trading, albeit modestly, with gains limited by the US dollar strengthening against other major currencies. Bullion prices are hovering above the $2,400 level, as the background narrative for traders remains positive due to the recent slowdown in US economic activity and lowering inflation, which has increased the likelihood of a Fed rate cut in September. Nevertheless, gold price gains are capped by uncertainty over the outcome of the US presidential election. Many see Donald Trump as the favourite to win, meaning a more protectionist administration in Washington. This scenario entails a stronger dollar, as more expensive imports could increase inflation and drive higher interest rates, creating headwinds for the precious metal's price.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European markets slid lower on Wednesday as risk appetite dropped following a disappointing start of the earning season in Europe and the US. Investors were disillusioned with the first slew of corporate results from the US tech sector after Alphabet and Tesla published results falling short of expectations.
Traders also face the same situation in Europe, but with the luxury sector this time, after LVMH showed a significant decrease in sales due to uncertain global economic conditions as well as a drop in Chinese Demand.
Of course, the earnings season will continue to roll, and investors will pay attention to today’s corporate results, with Kering’s Q2 report as the main event today, to see if the same trend will be echoed.
But so far, these disappointing results have only provided investors more reasons to take some profits out, naturally leading to corrective moves across many benchmarks. The STOXX-50 index is back below the 4,900pts zone following another failure to clear a short-term resistance above 4,945pts yesterday.
All sectors are in the red apart from utility shares, and the worst performers can be seen among consumer cyclicals, led lower by luxury stocks.
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.