Quiet Markets to Start the Week
US markets were closed yesterday, so most financial products had a relatively quiet day to start what could be a very busy week. US stock futures ticked a bit higher in trading, in line with moves higher in Europe and a tech rally on Asian bourses. FX markets were, of course, open, and the dollar moved lower ahead of key jobs updates this week, the DXY down 0.09% to 97.68. Oil markets did move, with contracts on Brent up 0.99% to $68.15 and on WTI up 0.94% to $64.61, as investor concern increased that the war in Ukraine will escalate further as both sides increase airstrikes rather than head towards the hoped-for ceasefire. Gold also gained ground again on haven flows to move within touching distance of the all-time high, eventually closing up 0.81% at $3,476.07 an ounce.
Gold in Focus as All-Time Record Set
Gold is in focus for traders today as it jumped early in the Asian session to power through resistance levels and record a fresh all-time high at $3,508.50. Most other financial products have been relatively quiet over the last few sessions, but Gold has pushed just over 2% from its low early Monday morning. An anticipated rate cut from the Fed in a couple of weeks’ time has led to some downside for the dollar, and this has helped contribute to the move higher for the world’s favourite precious metal. However, increased concerns over geopolitical issues—primarily the continued conflict, and signs of escalation, in Ukraine—have led to this recent move higher. The week ahead could be pivotal for XAUUSD from a fundamental perspective, with key US jobs numbers due out, and any further weakening should see this move continue. The risk for this move probably comes from positive geopolitical updates, which could see a sharp correction. However, until we see any change in the current environment, expect Gold to continue to remain bid on any dips.
Calendar Picks Up Today into a Busy Week
It was a quiet start to the week yesterday for traders, with mainly rangebound conditions persisting as desks took advantage of a US holiday to keep their powder dry. However, things will start to build up today, both on the calendar and with US traders returning to their desks. The Asian session should remain relatively quiet with nothing of note on the cards, but things should liven up once Europe enters the fray. Inflation data is in focus in the EU, with the CPI Flash Estimate (exp. +2.1% y/y) and the Core CPI Flash Estimate (exp. +2.2% y/y) data out, and traders are expecting the Euro to move around the release. The New York session sees the first tier-one data release of the week, with the ISM Manufacturing PMI (exp. 49.0) and the ISM Manufacturing Prices (exp. 65.1) data due out early in the session. Also, this will be the first trading session that US markets have to react to the weekend’s tariff updates, so traders are expecting to see plenty of moves as the day progresses.
