GOLD
As Tuesday trading got underway, gold prices eased off the weekly maximums touched during the previous session. Nevertheless, the precious metal remains near the $2,000 level. Demand for gold increased this week as its haven appeal was revived by the gloominess that has fallen over general market sentiment. A string of worse-than-expected economic data released on Monday, and the announcement by OPEC+ of its intention to reduce oil production, led to some pessimism and a reassessment of the growth prospects for the global economy. Against a background that is slightly more pessimistic than at the end of last week, and with the US dollar also showing signs of weakness, there may be scope for further gold price gains.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Stock indices traded sideways at the beginning of the trading session on Tuesday, extending the mixed sentiment registered overnight in Asia, as investors weigh the recent oil shock and the rising prospects of recession while waiting for key data this week.
Consolidation continues in Europe, after reassuring Spanish unemployment figures were offset by disappointing German trade balance data. Risk appetite is having a break so far this week after investors took some profit out following the bull run registered at the end of March. Most traders are likely to wait for further bullish catalysts before driving equities higher, especially as inflation and recession worries return following the announcement of a cut in oil output by OPEC+ countries. All eyes will be on this Friday’s new US NFP release, a key measure to the Fed’s monetary policy, expected to show a significant decrease in job creation compared to last month. Meanwhile, investors will pay attention to today’s EU PPI data as well as the US factory orders, durable goods and a speech from Cleveland Fed president Loretta Mester which could spark further market volatility in the afternoon.
Technically speaking, a market correction would be seen as normal following the sharp bullish rally witnessed in the second half of March. However, the recent intervention from central banks to bring stability and confidence back to the market tends to support market sentiment in the short-term, which makes any prediction of a correction very difficult.
The DAX-40 index trades sideways between 15,600pts and 15,665pts, with 15,470pts as the first support level for prices. 15,710pts and 15,820pts should be interesting resistance levels if the market manages to clear the 15,665pts level on the short-term basis.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
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