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MTrading Team • 2023-05-19

Gold recovers as Fed Chair Powell’s speech, US default news awaited

Gold recovers as Fed Chair Powell’s speech, US default news awaited

Markets turn dicey as traders await crucial events scheduled for late Friday and Sunday. The consolidation mode allows the US Dollar bulls to take a breather at a multi-day high, which in turn favors the Gold price to lick its wounds. On the same line, other commodities like crude oil and silver, join the Antipodeans to portray a corrective bounce.

However, GBPUSD remains indecisive as BoE policymakers failed to defend hawkish moves on Thursday’s monetary policy hearings. In the same way, EURUSD also hesitates to cheer the US Dollar’s retreat amid downbeat EU data and somewhat downbeat comments from the ECB officials.

Even so, Wall Street closed positive and allowed the Asia-Pacific shares to grind higher, even if US stock futures struggle around a multi-day high.

Elsewhere, BTCUSD and ETHUSD rebound from the 100-DMA but hesitate in extending the bounces amid price-negative options market signals.

Following are the latest moves of the key assets:

  • Brent oil braces for the first weekly gain in five by printing mild gains near $76.50.
  • Gold price licks its wounds around $1,965, pressured near the six-week low at the latest.
  • USD Index prints mild losses at the highest levels in two months, close to 103.40 by the press time.
  • Wall Street closed with gains and favored the Asia-Pacific shares to grind higher. However, equities in Europe and the UK print remain mildly bid as we write.
  • BTCUSD and ETHUSD ink minor gains around $26,900 and $1,810 as we write.
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Previous optimism fades amid mixed clues

The latest market moves can be considered as a consolidation ahead of Fed Chair Jerome Powell’s speech and US President Joe Biden’s debt ceiling announcements. Also challenging the mood are the recent chatters that some among the US policymakers stay ready for default but are stuck on their demands. Further, the likely US-China tension due to the trade deal between Washington and Taipei joins hawkish Fed concerns to also challenge market sentiment.

Even so, the recent increase in the hawkish Fed bets and US President Biden’s determination keep the US Dollar buyers hopeful. As a result, today’s Fed Chair Powell’s speech will be the key to a decisive market close. Following that, Sunday’s US President Biden conference should gain attention.

On a different page, equities are lackluster amid fresh fears surrounding easy Retail Sales and recession whereas cryptos can’t overcome regulatory fears and challenges the latest bounce of the BTCUSD and ETHUSD.

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

All eyes on Powell

While some second-tier data from Europe and other central bankers are also likely to offer an entertaining Friday, traders will be more concerned about Fed Chair Powell’s monetary policy outlook amid recently firmer calls for a 0.25% rate hike in June. Should that happen, the US Dollar can quickly refresh the two-month high marked the previous day while prices of Commodities and Antipodeans may witness further downside. It should be noted, however, that US President Biden’s failure to offer a debt ceiling extension might offer a gap-down opening for the US Dollar on Monday.

May the trading luck be with you!