GOLD
As European trading begins, gold prices have hit new all-time highs for the third consecutive session, fuelled by optimism following the Federal Reserve's first rate cut in four years. Last week's 50 basis point reduction and indications of further cuts have initiated a cycle conducive to lower treasury yields and a softer dollar, boosting demand for bullion, a non-yielding asset. In this environment, gold traders are now focusing on Jerome Powell's forthcoming public address and Friday's release of the latest Personal Consumption Expenditures data, the Fed's preferred inflation gauge. Demand for gold remains strong, and if these key events reinforce the dovish outlook, further price increases seem likely. At this point, traders don't need much prompting to keep demand high, and any additional support from these risk events could easily drive gold prices even higher.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
OIL
Brent oil prices rose in early Tuesday trading, hovering just below $75 per barrel. The recent gains were mainly driven by China's announcement of a stimulus package, including lower lending rates, aimed at jumpstarting its slowing economy. This move helped alleviate concerns about weak Chinese economic activity, which had previously weighed on oil prices. In response, traders are adjusting their forecasts to factor in higher demand, lending support to crude prices. Additional factors bolstering prices include ongoing tensions between Israel and Iran's proxies in Lebanon, which pose a risk of escalation that could disrupt global oil supply, as well as hurricane threats in the US Gulf Coast. With these elements combining to support oil prices, further gains would not surprise.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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