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MTrading Team • 2023-06-08

Gold recovers amid confused markets, softer US Dollar

Gold recovers amid confused markets, softer US Dollar

Fears that the anticipated economic recovery needs to suffer from higher interest rates contrast with the optimism in China to offer a mixed Asian trading session on Thursday. The same joins a light calendar to keep the markets in the bubbling waters.

Surprise rate hikes from RBA and BoC join OECD forecasts of global growth trajectory gained major attention to offer mixed momentum on Thursday. The moves allowed Treasury bond yields to rise but failed to inspire the US Dollar on mixed Fed concerns.

With this, the Gold Price dropped in the last two consecutive days before recovering early Thursday as traders rush for Gold and Yen amid uncertainty.

Commodities and Antipodeans cheer US Dollar’s weakness despite mixed mood whereas EURUSD, GBPUSD and USDJPY gain from hawkish concerns about the ECB, BoE and BoJ in that order. It should be observed that the upbeat Japan GDP revision adds strength to the JPY.

Oil Price also improves but struggles for clear directions amid fears of lesser supplies whereas cryptocurrencies follow the trend as industry players portray bottom picking.

Following are the latest moves of the key assets:

  • Brent oil extends the previous day’s recovery toward $77.30 by the press time.
  • Gold price prints the first daily gains in three around $1,948 as we write.
  • USD Index drops for the second consecutive day to 103.98 at the latest.
  • Wall Street closed mixed and so did the Asia-Pacific shares. That said, the equities in the UK and Europe dribble as we write.
  • BTCUSD and ETHUSD print mild gains to around $26,500 and $1,840 respectively by the press time.
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Dicey markets propel Gold, Yen…

A lack of clarity for the traders joins an absence of major data/events to trouble momentum traders. Even so, fears that the latest pick-up in global economic transition may fade due to the hawkish central bank actions seem to weigh on the sentiment and allow the traditional safe havens like gold and JPY to remain firmer. It should be noted that commodities got a double advantage from the US Dollar’s weakness on dovish Fed concerns whereas the Antipodeans ignore mixed data from Australia, New Zealand and China to grind higher.

Equities in the Asia-Pacific zone trade mixed while taking clues from Wall Street whereas European and British shares are down in the early hours.

Elsewhere, cryptos consolidate recent losses with mild gains as traders adhere to short-covering moves.

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

Nothing major on the cards

Apart from the weekly US job clues, revised EU GDP and second-tier BoC Officials’ comments, the economic calendar remains silent about any major details. Hence, the risk catalysts are the key to observing for directions, which in turn suggests the continuation of the latest moves again the US Dollar.

May the trading luck be with you!