Gold prints four-day uptrend amid sluggish market

Traders remain cautious ahead of this week’s top-tier data, especially amid mixed news, early Thursday. The same stops the US Dollar from cheering Fed policymakers’ hawkish comments, edging higher of late. However, the EURUSD and GBPUSD hold lower grounds while the USDJPY stops the previous day’s retreat from a multi-year high.

Gold price rose for the fourth consecutive day amid the market’s peace with the clues suggesting the Fed’s June rate cut whereas Crude Oil printed mild gains by ignoring the downbeat inventories.

Further, AUDUSD and NZDUSD portray downside bias whereas the USDCHF seesaws around a multi-month high. That said, USDCAD snaps a three-day losing streak despite upbeat prints of Canada’s key export item, namely crude oil.

BTCUSD and ETHUSD pick up bids to reverse the previous day’s mild losses backed by grim concerns about the US SEC’s verdict on Coinbase.

Following are the latest moves of the key assets:

• Brent oil extends the previous day’s rebound from a two-week low to $86.50 by the press time.
• Gold price prints a four-day uptrend around $2,195 at the latest, poking ascending resistance line from May 2023.
• USD Index stays on the front foot at the weekly high of near 104.50 as we write.
• Wall Street closed on the positive side and the Asia-Pacific stocks also edged higher. Further, the shares in Europe and the UK remain dicey during the initial hour.
• BTCUSD and ETHUSD both reverse the previous day’s losses to around $70,500 and $3,575 at the latest.

US Dollar grinds higher but Gold ignores that…

The US Dollar Index (DXY) seesaws around the weekly top while struggling to defend the previous two-week uptrend ahead of the key data. The hawkish comments from Fed Governor Christopher Waller joined the cautious mood ahead of the key US data to renew the US Dollar strength early Thursday. That said, Fed’s Waller said that the US central bank may need to hold the current rate for longer than expected while also adding that there is no rush to cut (the rates).

Elsewhere, US Treasury Secretary Janet Yellen pushed back concerns about the US retaliation to China’s excess capacity and subsidies while showing readiness to have 'constructive' talks with Chinese officials. However, the trade war fears prevail as a piece of news suggests that the US urges allies to bar companies from servicing certain Chinese chipmaking tools.

It’s worth noting, however, that the US Dollar’s rejection of the bearish bias fails to tame the Gold buyers as XAUUSD remains mildly bid at the highest level on record, marked last Thursday. The reason could be linked to the market’s conviction in the yellow metal’s allure during uncertain times like this when the central banks are unsure of the next moves and the economic details are dicey. Furthermore, upbeat catalysts from Asia, one of the biggest Gold customers, also strengthen the precious metal.

Elsewhere, EURUSD and GBPUSD stay depressed as the latest comments from the European Central Bank (ECB) officials suggest a sooner rate cut while the Bank of England (BoE) policymakers’ hawkish statements lack acceptance amid fears about the UK’s economic transition. That said, USDJPY remains dicey after retreating from the highest level since 1990 the previous day as Minutes of the latest Bank of Japan (BoJ) monetary policy meeting hesitates favoring the first rate hike in nearly two decades.

Crude oil fails to justify an unexpectedly higher build in the US weekly oil inventories, as well as the US Dollar’s strength, as traders fear more geopolitical tensions will propel supply crunch while OPEC+ defends output cut policy. With this, the Light Sweet Crude Oil and Brent Oil both defend the previous day’s recovery from a two-week low.

Despite the firmer Crude Oil, the USDCAD prints the first daily gain in four amid a slightly firmer US Dollar and the market’s preparation for a firmer print of the Canadian Monthly GDP for January.

USDCHF remains firmer at the highest level since early November as Swiss National Bank (SNB) Chairman Thomas Jordan defends the latest rate cuts by saying, “Lower inflation pressure allowed them to lower interest rates.”

NZDUSD dropped to a fresh low since mid-November 2023 after New Zealand’s ANZ-Roy Morgan Consumer Confidence for March slumped to a six-month low. Further, AUDUSD also remains pressured as fears of the US-China trade war join the market’s cautious mood and downbeat Australian Consumer Inflation Expectations for March.

• Strong buy: USDCAD, USDJPY
• Strong sell: Crude Oil, US Dollar, GBPUSD
• Buy: BTCUSD, ETHUSD, Nasdaq, Gold
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

A slew of US data to entertain momentum traders…

Looking ahead, the US Weekly Jobless Claims, Monthly Personal Consumption Expenditure (PCE) and the final prints of the US Gross Domestic Product (GDP) for the fourth quarter (Q4) of 2023 will entertain the market players. That said, most of the scheduled data aren’t expected to confirm the Fed’s hawkish bias, which in turn can challenge the US Dollar bulls and allow the commodities to remain firmer. It should be noted, however, that Friday’s US Core PCE Price Index will be too important and hence a major move isn’t expected ahead of that unless today’s figures print extreme outcomes.

May the trading luck be with you!