Gold reaffirms haven status, hits two-week high ahead of PMI, despite stronger US Dollar

Cautious mood prevails ahead of key PMIs

Following recent market volatility, traders are focused on the upcoming November PMI data and UK Retail Sales on Friday. Mixed geopolitical news from Russia, Ukraine, and the Middle East, along with a hawkish Fed, has supported the US Dollar's weekly gains. However, Gold is still rising, hitting a two-week high as investors seek safe-haven assets in uncertain times.

On Thursday, mixed US economic data, including Jobless Claims, the Philly Fed Index, and Existing Home Sales, didn’t deter US Dollar bulls, supported by hawkish remarks from Chicago Fed President Alan Goolsbee. Geopolitical tensions, with Russia’s missile attacks on Ukraine and escalating Iran-Israel tensions, also boosted the Greenback. As a result, the US Dollar Index (DXY) hit a new high since October 2023, marking its third straight day of gains. However, Gold continued its rally, reaching a two-week high and extending its five-day winning streak.

EURUSD renews 2024 bottom, GBPUSD drops to six-month low but USDJPY struggles

The US Dollar's weakness outweighed hawkish comments from ECB and BoE officials, sending EURUSD and GBPUSD to fresh multi-month lows. EURUSD fell to its lowest level since October 2023, despite ECB's Robert Holzmann stressing the need for continued restrictive policies. GBPUSD hit a six-month low as BoE's Catherine Mann suggested holding rates longer to assess inflation persistence.

Meanwhile, USDJPY remained subdued, impacted by mixed PMI data, inflation figures, and uncertainty over the Bank of Japan's next moves. Japan's November PMIs showed a dip in Manufacturing but an improvement in Services, keeping the Composite stable. Japan’s inflation eased slightly to 2.3% YoY in October, while Prime Minister Shigeru Ishiba announced a ¥39 trillion stimulus plan.

AUDUSD resumes decline, NZDUSD slumps and USDCAD grinds higher

AUDUSD drops, reversing its previous bounce, weighed down by weak household income data in Australia, which has fallen to 2009 levels, and a stronger US Dollar.

NZDUSD extends its losing streak for a third day, hitting the lowest level since November 2023, amid concerns about possible steep rate cuts from the Reserve Bank of New Zealand (RBNZ).

Canada’s Producer Price Index (PPI) for October, strong Consumer Price Index (CPI) data and rising Crude Oil prices, helped limit USDCAD’s gains despite the US Dollar’s strength.

Gold buyers keep the reins, Crude Oil lacks upside momentum

Gold rises for the fourth straight day, hitting a two-week high, driven by stimulus news from China and Japan, alongside market uncertainty over central bank policies and geopolitical tensions. Despite a stronger US Dollar, Gold is targeting the key $2,710-2,715 resistance zone.

Crude Oil also defies the US Dollar’s strength, supported by ongoing concerns over Russia, Ukraine, and the Middle East. However, market sentiment is mixed, with worries about lower energy demand in China and higher supplies from OPEC+ putting pressure on oil prices.

Crypto bulls dominate

Bitcoin (BTCUSD) hits a new all-time high near $99,000, while Ethereum (ETHUSD) remains strong at an eight-day high, following its biggest rise in three weeks. The surge in crypto prices is driven by growing optimism, partly fueled by the potential return of a Trump presidency. US Senator Cynthia Lummis has backed a strategic Bitcoin reserve and suggested selling some gold reserves to buy Bitcoin. Additionally, speculation about SEC Chair Gary Gensler’s resignation is boosting crypto sentiment, further driving up Bitcoin and Ethereum prices.

Latest moves of key assets

• WTI crude oil remains sidelined at the highest level in two weeks, mildly bid near $70.10 at the latest.
• Gold rises for the fifth consecutive day to refresh a two-week high near $2,688.
• The USD Index has risen to the highest level since October 2023, posting minor gains near 107.20, as we write.
• Wall Street closed with minor gains but the Asia-Pacific shares remain directionless. However, European and British equities post minor gains during the initial trading hour.
• BTCUSD remains on the front foot around the all-time high, mildly bid near $99,000, whereas ETHUSD rises to an eight-day high near $3,380 by the press time.

PMIs in the spotlight

On Friday, UK Retail Sales for October will catch the eye of momentum traders, but the focus will shift to the preliminary November PMIs for the Eurozone, Germany, the UK, and the US. While UK and EU data may not boost GBPUSD or EURUSD, strong US PMI numbers could fuel further US Dollar gains, potentially challenging Gold buyers around the key $2,710-2,715 resistance zone.

Predictions for Key Assets

• Recovery Expected: USDCAD, USDJPY, US Dollar, Silver, BTCUSD, ETHUSD
• Further Downside Likely: AUDUSD, NZDUSD, GBPUSD
• Mostly Sideways Expectations: Nasdaq, Gold, DJI30, USDCNH
• Slow & Gradual Fall Expected: DAX, FTSE 100, EURUSD, Crude Oil

May the trading luck be with you!