GOLD
Gold prices touched an all-time high during early Monday trading, reflecting growing expectations of a Federal Reserve rate cut within the first quarter of 2024 and simmering geopolitical instability in the Middle East. With inflation coming down faster than expected and economic activity showing signs of weakness, investors are growing increasingly hopeful that the next Fed move will be a cut, which could, according to the most optimistic, come as early as March next year. Against this background, with softening treasury yields, the opportunity cost of holding the non-yielding metal is decreasing, with demand and prices moving in the opposite direction. At the same time, tensions are again rising in the Middle East, with attacks on ships in the Red Sea driving the precious metal's haven appeal.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Equities traded sideways in Europe on Monday amid mixed market sentiment towards risk ahead of a significant batch of new macro data this week.
The STOXX-50 index drifted shortly after the opening bell before bouncing back as gains in consumer non-cyclicals, industrials, and real estate shares offset losses seen in basic material and energy stocks.
Investors’ appetite for risk remains, however, fragile for two reasons.
This week’s macro agenda is busy, with most traders waiting for PMIs and ISM data from the US, UK and EU while a batch of US job data looms. Investors will also wait and see where economies are going, checking that the anticipations that drove the autumn rally were on point before adjusting their portfolio’s exposure to risk.
The second reason is technical: as previously mentioned, the market has already gone a long way up since its rebound at the end of October. With the impact on key resistance levels, investors may want to consider taking out some profit while waiting for this week’s macro developments.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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