GOLD
Gold prices remained steady during early Wednesday trading, hovering around the $1,970 level, close to where they have been since the market opened on Monday. The price action for the precious metal is caught in a tussle between two opposing forces. On the one hand, despite growing hopes of a diplomatic solution, geopolitical instability and the threat that the conflict in Israel and Gaza could envelop the entire region continue to drive haven demand for the precious metal, a dynamic accentuated by fears of a recession in Europe, after the release of disappointing PMI data on Tuesday. However, the upside for bullion has been limited following the release of better-than-expected US economic data that led to the overnight strengthening of the US dollar, supported treasury yields, and dented the appeal of the non-yielding gold.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European shares traded lower on Wednesday due to the absence of positive drivers, hindering further bullish sentiment.
The STOXX-50 index, led lower by almost all sectors, has now broken out its short-term bullish trendline after failing to clear the key 7,075.0pts resistance yesterday.
The risk-on sentiment is now fading as the technical bullish correction led by the rebound over the 4,000.0pts zone has ended after investors desperately sought more bullish market drivers that never came.
Traders and analysts think there are more reasons to remain cautious with equities rather than buying this market.
Between patchy corporate results, lingering inflation and monetary worries, the spike in treasury yields, and rising geopolitical concerns, investors have a lot to digest. They may want to wait for clear developments from those main topics before increasing their exposure to riskier assets.
Volatility will likely remain high for traders today as many will eye major economic data releases, such as the US new home sales and crude oil inventories, alongside a decision on rates from the BoC ahead of a speech from Fed Chairman Powell later in the afternoon.
The corporate front will keep everyone busy with reports from Air Liquide, Carrefour, Dassault Système and Worldline in Europe, ahead of Boeing and Meta Platforms from the US.
With today’s bearish break-out on the pan-European index, the next target can be found lower towards the 4,000.0pts/4,015.0pts zone previously seen at the end of last week.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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