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MTrading Team • 2023-03-29

Gold slips off buyer’s radar as risk-on mood cools, US Dollar recovers

Gold slips off buyer’s radar as risk-on mood cools, US Dollar recovers

Market sentiment fades the previous optimism amid early Wednesday’s lackluster trading. Even so, the yields retreat and the US Dollar manages to pare recent losses. The greenback’s rebound probe commodity price and weigh on Antipodeans but the hopes of no banking crisis and easy rate hikes, or policy pivot, from major central banks, keep the Brent Oil prices firmer. It’s worth noting that the Gold price reverses the previous day’s gains as headlines from China challenge the risk appetite and raise doubts about the dragon nation’s future demand.

Elsewhere, AUDUSD drops as downbeat inflation joins softer Retail Sales to renew talks of RBA’s pause in rate lifts whereas the USDCAD and USDCHF remain mostly inactive amid mixed headlines.

USDJPY rises the most among the G10 currency pair as downbeat Japan data joins BoJ talks defending easy money policy. Further, EURUSD and GBPUSD pare recent gains as optimism surrounding the ECB and the BOE’s future rate hikes recede.

Cryptocurrencies remain firmer and approach the multi-month high marked the last week despite price-negative headlines surrounding BTCUSD and ETHUSD.

Following are the latest moves of the key assets:

  • Brent oil rises for the third consecutive day as it renews two-week top around $79.00 by the press time.
  • Gold reverses the previous day’s recovery moves to drop back to $1,960, down 0.60% intraday at the latest.
  • USD Index prints the first daily gains in three near 102.65 as we write.
  • Wall Street closed with minor losses and so the equities in the Asia-Pacific region traded mixed. However, shares in Europe and the UK remain firmer for the second consecutive day.
  • BTCUSD and ETHUSD bulls keep the reins around $28,00 and $1,800 respectively.
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Quarter-end positioning it is…

Although most traders fancy highlighting China headlines and a recently cooling optimism about banks to signal the shift in the market’s sentiment, there isn’t anything major that challenges the market’s previous risk-on mood. However, the month-end joins the quarter-end positioning to allow the US Dollar bears to take a breather and let the Gold price decline.

On the same line could be the retreat in the EURUSD and GBPUSD even as most fundamentals surrounding the European and the British economies remain intact, apart from the central bankers’ latest hesitance in suggesting more rate hikes.

Crude oil consolidates previous losses amid hopes of more energy demand ahead of next week’s OPEC meeting whereas the USDJPY reverses the previous losses backed by the hawkish chatters about BoJ’s extension from loose monetary policy.

BTCUSD ignores CFTC’s lawsuit against Binance while ETHUSD seems bracing for a heavy liquidation in April.

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

Nothing major still…

Only the Swiss calendar appears to have some top-tier data/events like the ZEW sentiment gauge and SNB’s quarterly bulletin but the rest of the world has nothing major to entertain traders, which in turn can extend the latest moves ahead of the key Thursday and Friday. That said, inflation clues from Europe and the US will be critical to watch during the late week while headlines about banking, China and central banks could be entertaining.

May the trading luck be with you!