Gold regains upside momentum on Taiwan concerns, oil struggles ahead of OPEC meet

Global markets turn dicey as traders struggle to calculate risks emanating from US House Speaker Nancy Pelosi’s Taiwan visit. Even so, China PMI joined mixed comments from the Federal Reserve (Fed) officials to favor cautious optimism, despite recession woes.

US dollar tracked yields to reverse the bounce off the monthly low, which in turn helped commodities and Antipodeans to consolidate recent losses. However, fears of US-China tussles and anxiety ahead of the OPEC meeting seem to challenge the market participants. That said, gold stays firmer around the monthly peak but the crude oil prices remain pressured amid fears of more output.

NZDUSD justifies a surprisingly downbeat NZ jobs report while AUDUSD and EURUSD cheer the greenback’s weakness. Further, USDCHF also joins the line of the Kiwi pair while posting mild gains.

Cryptocurrencies, however, fail to benefit from the softer USD amid fears of looming heavy selling pressure.

Following are the latest moves of the key assets:

  • Brent oil remains pressured around $103.50, down 0.20% intraday.
  • Gold reverses the previous day’s pullback, up 0.40% near $1,768 by the press time.
  • USD Index fades bounce off monthly low, down 0.13% on a day near 106.20 at the latest.
  • FTSE 100 and Eurostoxx both print mild losses while DAX declined 0.30% at the latest.
  • Wall Street marked another day filled with losses with Dow Jones’ 1.23% daily fall.
  • BTCUSD and ETHUSD seesaw around $23,000 and $1,630 of late.

Sino-American tussles battle China data ahead of US PMI

China’s warnings to the US and Taiwan couldn’t shake markets much amid the absence of any actual action. Even so, the European Union (EU) raised possibilities of peace talks and the White House tried to placate the dragon nation by reiterating its One China policy.

On the other hand, Fed policymakers appear less hawkish and joined strong China Caixin Services PMI to contribute to the market’s cautious optimism.

Other than the aforementioned mixed clues, anxiety ahead of the US ISM Services PMI and the key OPEC meeting also restricts the market moves.

Gold appears to benefit the most from the market’s indecision while oil pares earlier gains amid hopes of more output, mainly due to the recent push from the US.

BTCUSD and ETHUSD remain pressured as traders fear a multi-billion dollar's worth of impending short. However, a report showing more market participation and a softer USD tames the bears of late.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD

US ISM Services PMI, OPEC will be in focus

Although talks surrounding Taiwan, recession and Fed are the hot catalysts, traders will also pay attention to the US PMI data amid recently downbeat figures. Should the actual number flash economic slowdown fears, with higher inflation precursor, the US dollar may rebound. On the other hand, OPEC could also surprise markets amid the need for more energy output even as the initial chatters suggest no change in its previously announced policies.

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