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MTrading Team • 2023-09-07

Gold pauses downward trajectory at weekly low as bears seek more clues

Gold pauses downward trajectory at weekly low as bears seek more clues

The turnaround on Thursday proves its worth as traders reassess the previous moves with mixed economic details and a light calendar ahead. Even so, the US Dollar and yields remain on the front foot as fears of recession in major economies outside the US keep fueling the Greenback’s haven demand.

The same joins mixed China foreign trade numbers and hopes of more stimulus from the Dragon nation to put a floor under the Gold price even as the bullion fails to defend the recovery of late.

EURUSD also slips on downbeat German numbers while the GBPUSD bears the burden of dovish BOE monetary policy hearings. Alternatively, USDJPY drops for the second consecutive day while USDCAD, AUDUSD and NZDUSD stick to mild gains. It should be observed that Australia's trade surplus shrinks and the RBA Governor appeared hawkish in his last speech as the Aussie central bank leader but failed to impress Aussie much, despite the latest rebound from a yearly low.

Elsewhere, fears of heavy liquidation by Bitcoin whales join the mixed concerns about Ethereum to confuse BTCUSD and ETHUSD traders.

Following are the latest moves of the key assets:

  • Brent oil retreats from the yearly high to print mild losses around $90.60 by the press time.
  • Gold price snaps five-day losing streak despite lacking upside momentum near $1,920 at the latest.
  • USD Index remains firmer at the highest level since March to poke 104.95 level as we write.
  • Wall Street closed with minor losses and so did the Asia-Pacific stocks while equities in Europe and the UK remain edge lower by the press time.
  • BTCUSD remains indecisive near $25,700 while ETHUSD seesaws around $1,640 at the latest.
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US Dollar stays firmer amid a mixed day

Although the Asian traders sought more clues to extend the previous day’s risk aversion and probed the US Dollar bulls, the Western moves remained intact and recalled the Greenback buyers, which in turn exerted downside pressure on the riskier assets like commodities and Antipodeans. Even so, the market’s consolidation allows them to be defensive while the Crude Oil reverses from the yearly top and the Gold rebounds from the weekly bottom.

Strong US data and hawkish Fed bets regain the market’s attention and suggest that the US economy will be able to avoid recession, which in turn allows the policymakers to defend the restrictive policy and favor the US Dollar bulls. Even so, traders will need more clues of economic weakness in the rest of the major economies, as well as the strength of the US economy to keep the Greenback firmer.

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

Second-tier data, policymakers’ comments eyed

Eurozone GDP, US Jobless Claims and other employment clues will precede a slew of central bankers’ speeches to entertain momentum traders late Thursday. However, the ECB blackout period could join the absence of top-tier data/events to allow the traders to continue with the early-week moves.

May the trading luck be with you!