GOLD
In early Friday trading, gold prices surged by close to 1%, buoyed by lower treasury yields and a weakened dollar, and are poised to conclude the week with gains following two consecutive weekly losses. These upward movements can be largely attributed to evolving expectations regarding the Federal Reserve's future actions, with analysts now leaning towards at least two rate cuts in 2024. The latest impetus for this shift occurred on Thursday, when US jobless claims surpassed expectations, amplifying sentiments stirred by last week's disappointing non-farm payrolls report and further exposing vulnerabilities in the American labour market. Against this backdrop, the Federal Reserve is encountering diminishing leeway to maintain higher rates for an extended period, with this changing dynamic auguring well for the value of the non-yielding precious metal.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
EU equities extended their rally on Friday, following the global bullish trend for stocks, as investors cheered on corporate results and macro data. Investor appetite for risk continues to rise, leading benchmarks towards one of their best weekly performances since the beginning of 2024. Most indices have cleared major resistance levels, unlocking new targets in the short to mid-term view, as the market correction that started in April has come to an end.
This bullish impulsion has taken root after investors, who have previously been disappointed by hawkish hints from the Fed and geopolitical tensions, welcomed strong corporate results for Q1 in both the US and EU. More importantly, with the latest batch of US data suggesting the Fed may be unable to keep its hawkish stance much longer, dovish hopes are back under the spotlight, fueling market sentiment towards risky assets.
Elsewhere, traders in UK stocks have also cheered on this morning’s slew of economic developments after it showed the region’s recession was officially over while manufacturing production also topped estimates. We expect markets to remain directional for the last trading session of the week, confirming the bullish tone further, while investors will slowly start shifting their focus to next week’s US data with a crucial inflation reading in sight.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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