Gold consolidates weekly loss on global inaction

Global markets pare weekly moves during sluggish Friday as mixed messages from macros and a light calendar challenge the traders.

The US Dollar traces softer Treasury yields but stays on the way to print the weekly gains. As a result, the gold price posts the daily upside despite bracing for the first week-on-week loss in three. That said, crude oil also prints restricted moves with intraday gains and weekly downside.

USDJPY and GBPUSD have additional reasons, in the form of key data at home, to cheer the USD weakness but USDCAD remained downbeat amid dovish bias for the Bank of Canada (BOC).

On a different page, ETHUSD and BTCUSD also cheered the US dollar weakness despite pessimism at home.

Following are the latest moves of the key assets:

• Brent oil braces for the biggest weekly loss since August around $90.50.
• Gold prints mild gains around $1,765 but stays on the course of the first weekly negative in three.
• USD Index fades the previous day’s recovery by printing mild losses near 106.55.
• Stocks in Europe and the UK are mildly bid even as Wall Street closed in the red.
• BTCUSD and ETHUSD both print gains near $16,600 and $1,200 respectively.

It is NOT optimism!

Although the US dollar’s weakness and a retreat in the US Treasury yields favored the risk-on mood on early Friday, the yield curve and the latest hawkish Fedspeak keep flashing red signals for the market players. This week’s strong prints of the US Retail Sales and PPI also questioned the adjustment of the Fed bets and challenge the sentiment.

That being said, the strong prints of Japanese inflation and the UK Retail Sales growth, backed by the sound British fiscal policy, seem to help the Yen and Pound. It should be noted that the NZDUSD braces for the five-week uptrend as traders anticipate stronger rate hikes from the RBNZ.

Gold balances the recent losses as China expects a strong rebound in growth during the second half of 2023. The same also favored oil buyers amid fresh supply crunch fears emanating from the Middle East.

Elsewhere, the crypto market’s pessimism surrounding the FTX fiasco and a higher volume of outflow keeps the BTCUSD and ETHUSD bears hopeful despite the latest gains.

• Strong buy: USDJPY
• Strong sell: ETHUSD
• Buy: USD Index, USDCAD, Nasdaq, EURUSD
• Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

Nothing major on the table

A lack of the key catalysts, except for ECB President Lagarde’s speech and second-tier statistics from the US and Canada, allowed traders to consolidate the weekly moves. However, risk aversion may continue teasing the US dollar buyers. It should be noted that the headlines surrounding China, Russia and the next moves of the top-tier central banks could entertain the market players during the last working day of the week.

May the trading luck be with you!