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Yulya Lobanova • 2022-03-25

Gold benefits from slow-paced risk-aversion but USD, oil struggle for traction, ETH supersede BTC

Gold benefits from slow-paced risk-aversion but USD, oil struggle for traction, ETH supersede BTC

The chatters over Russia-Ukraine joined hawkish Fedspeak to propel risk-off mood on Thursday, as well as during early Friday. However, the markets turned dicey, with the choppy yields activating the US dollar pullback, during the initial hours of the week’s last trading day.

The sour sentiment weighed on the Asian and European equities even as Wall Street managed to regain upside traction the previous day. Further, the yen cheered hopes of BOJ intervention whereas oil prices struggle for clear direction amid mixed clues and the market’s anxiety.

BTC/USD and ETH/USD remain on the way to the second positive week but Bitcoin buyers struggle of late.

Following is the detailed performance report of the key financial assets:

  • BRENT OIL drops for the second day, down 1.40% around $116.00 rate.
  • GOLD remains mildly bid around $1,960.
  • USD INDEX pauses on the way to 99.00, down 0.17% near 98.60 at the latest.
  • DOW JONES, NASDAQ and S&P 500 all regained upside traction.
  • DAX drops 0.50% reaching 14,270 rate whereas FTSE 100 reaches 7,450 level, down 0.40% intraday.
  • BTC/USD remains indecisive around $44,000 but ETH/USD rises 0.55% to $3,120 rate.

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Drama over Russia sanctions continue, Fed speakers keep 0.50% rate-hike on the table

US President Joe Biden pushed for harsh sanctions on Russia but the divide among the European Union (EU) members, due to their reliance on Moscow, failed to generate a harsh response. Even so, NATO offered four battle groups to Ukraine and criticized China for its support to Moscow. Further, Biden went ahead with sanctioning over 400 key personals from Russia although he failed to eliminate Moscow from G20. As a result, Washington signaled to help Brussels in overcoming gas supplies and win a favor, which in turn played a part on Friday when Germany signaled that they’ll soon be independent of Russia’s energy imports.

The Fed policymakers kept singing tunes of heavy rate hikes and Quantitative Tightening (QT) but mixed data at home raised doubts over the USD’s strength. China, on the other hand, showed readiness for easy money extension as the latest covid woes require liquid markets.

On a different page, Japan’s government bonds rallied to the multi-month high, flagging risk of Bank of Japan’s (BOJ) 2015-like intervention, which in turn propelled the yen.

Talking about cryptocurrencies, Russia’s readiness to accept Bitcoin for oil and gas offered a positive push to the BTC and ETH. However, technical details and higher burnout of Ethereum, as well as the popularity of NFTs, keep ETH ahead of BTC.

Current trends

Risk-aversion continues with slow grind but Antipodeans play different songs:

⏫ 🟢 Strong buy: DAX, FTSE 100, and ETH/USD

⏬ 🔴Strong sell: DOW JONES, S&P 500

⬆️ 🟢Buy: Gold, USD Index, BTC/USD, Nasdaq

⬇️ 🔴 Sell: Brent oil, Silver

Geopolitical fears, Fed woes are the key but fewer surprises expected

Global markets are likely to remain risk-averse as Ukraine-Russia tussles are far from over. While the geopolitical fears can exert downside pressure on the riskier assets, Fed’s push for faster tightening adds to the safe-havens’ strength.

The EU members will have another day to chatter about the grim conditions in Kyiv during the Eurogroup meeting. However, a lighter play is expected by the weekend.

This in turn could help gold and the US dollar to end the week on a positive side while oil may struggle.

Elsewhere, ETH and BTC could stay firmer and remain on the bull’s radar but a slow grind to the north is more likely.

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