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MTrading Team • 2023-01-26

Gold retreats amid dicey markets ahead of US GDP

Gold retreats amid dicey markets ahead of US GDP

After a week-long wait, the D day is finally here with the US GDP and the pre-data anxiety escalates. Adding strength to the market’s inaction, at least in the Asia-Pacific region, could be the off in China, Australia and India. Furthermore, a light calendar and ECB blackout also allow trades to keep their eyes on the economic calendar.

With this, the US Dollar licks its wounds even as the Treasury bond yields remain depressed. The resulting move weighs on the Gold price and probes other commodities, as well as Antipodeans, amid a sluggish start to the all-important day.

AUDUSD could be seen printing mild gains while the rest are struggling for clear directions, with the EURUSD and USDCNY being the lazy pairs among the majors. Crude oil also tracks gold and prints mild losses.

Cryptocurrencies are also paring recent gains at a slower pace as regulatory pressure escalates.

Following are the latest moves of the key assets:

  • Brent oil drops for the third consecutive day by printing mild losses near $86.40.
  • Gold prints the first daily loss in three, after refreshing nine-month high.
  • USD Index bounces off the lowest levels since June and steadies near 101.65.
  • Wall Street closed mixed and confused traders in the Asia-Pacific region amid a thin presence of traders. However, equities in Europe and the UK are mildly bid at the latest.
  • BTCUSD and ETHUSD seesaw near the multi-day high, close to $23,000 and $1,600 as we write.
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The nail-biting hours to US GDP

Global markets portray the typical pre-data anxiety and trade mostly unchanged while off in certain markets and pre-ECB silence adds restrictions to the lackluster session. 

Additionally confusing traders could be the contrast between cautious optimism in China and the latest poll from Reuters suggesting a global economic slowdown. Furthermore, the BoJ policymakers’ indecision over the next move probe USDJPY bears even as the yields aren’t off the three-week downtrend.

Even so, the US Dollar traders seem to brace for the downbeat US data and pare recent losses, or at least pausing further downside, as Fed bets remain dovish while the ECB policymakers keep signaling higher rate hikes. 

As a result, the Gold price is down and takes Crude oil with it while the talks of more supplies from the US and OPEC+ exert additional downside pressure on the energy markets.

Elsewhere, the BTCUSD and ETHUSD also slip into the consolidation zone after Bitcoin refreshed a three-month high while Ethereum pare weekly gains.

  • Strong buy: GBPUSD
  • Strong sell: ETHUSD, USDJPY
  • Buy: USD Index, USDCAD, Nasdaq, EURUSD
  • Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

All eyes on US Q4 GDP

Although the US Durable Goods Orders, Goods Trade Balance and PCE Price are up for publishing later today, market players are most interested in the Advance readings of the US Q4 GDP amid recession fears. Should the actual data suggest a lack of positive economic transition from the Covid-led woes, the Fed will have a hard time pushing back the policy pivot concerns which have been dragging the US Dollar down.

May the trading luck be with you!