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MTrading Team • 2023-06-29

Gold bears keep control as Fed Chair Powell, other central bankers favor higher rates

Gold bears keep control as Fed Chair Powell, other central bankers favor higher rates

Markets remain dicey even as Fed Chairman Jerome Powell repeats his hawkish comments early Thursday, after joining multiple central bankers the previous day to advocate higher rates. Even so, the US Dollar edges lower and the Gold price drops for the third consecutive day to refresh the lowest levels since March.

Apart from the major central bankers’ favor for restrictive monetary policies, mixed concerns about China and fears emanating from Russia also spoil the risk appetite. However, the absence of witnessing anything new from what’s already heard from every corner of the markets seems to tame the bearish bias.

The same join the upbeat Aussie Retail Sales to propel AUDUSD while firmer prints of New Zealand’s ANZ sentiment gauges allowed NZDUSD to trace its neighbor, namely the Australian Dollar.

Elsewhere, Brent oil retreats from a two-week high whereas USDJPY also refreshes the yearly peak before posting minor intraday losses of late.

It should be noted that the EURUSD and GBPUSD print mild gains as the US Dollar struggles to defend the previous day’s run-up ahead of another slew of US data about inflation, growth and employment.

Talking about cryptos, BTCUSD and ETHUSD ignores looming regulatory fears and the industry players’ tussles with the US SEC to print minor gains.

Following are the latest moves of the key assets:

  • Brent oil prints minor losses around $73.60 as it reverses the previous day’s recovery from a 13-day low.
  • Gold price drops for the third consecutive day to refresh three-month low near $1,905 at the latest.
  • USD Index prints mild losses after refreshing weekly top, down 0.05% intraday near 102.95 at the latest.
  • Wall Street closed mixed but Asia-Pacific shares edged lower. That said, equities in Europe and UK are mildly offered of late.
  • BTCUSD and ETHUSD print minor gains to around $30,400 and $1,850 by the press time.
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Higher rates are already known but gold drops

The global central bankers did their best to convince the markets that they are far from returning to easy monetary policies and are still capable of lifting the rates. However, the fact is already chewed multiple times in the market and hence has a limited shelf life after offering an initial USD-positive reaction. Even so, the Gold sellers cheered the hawkish statement, together with the expectations of more drama surrounding the US-China ties, to print a three-day downtrend while bracing for the third consecutive week and refreshes a three-month low.

Further, Australia’s Retail Sales jumped for May and New Zealand’s ANZ confidence gauges also improved, which in turn allowed AUDUSD and NZDUSD to pare the previous day’s losses. That said, the GBPUSD and EURUSD remain sidelined whereas USDJPY cheers upbeat prints of second-tier data amid fears of Japan intervention as it initially renewed a multi-month high before reversing below 145.00.

On the other hand, Crypto industry leaders like Coinbase and Binance are jostling with the US SEC but a slew of new ETF registrations join the US Dollar’s retreat to help the BTCUSD and ETHUSD lick their wounds.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

A slew of data eyed

Final readings of the US Q1 GDP, Weekly Jobless Claims and PCE spending figures will entertain the market players on Thursday. Also important to watch are the final readings of German inflation and certain other central bankers’ speeches

It’s worth noting that the risk catalysts will be more important than the data for intraday directions.

May the trading luck be with you!