Gold, Dow Jones, US Dollar, GDP Data – Asia Pacific Market Open
- Gold costs sink because the US Dollar rallies and the Dow Jones tumbles
- Supportive Q3 US GDP revisions underscored a extra hawkish Fed
- Asia-Pacific markets probably in danger to skinny buying and selling circumstances forward
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Asia-Pacific Market Briefing – US GDP Data Underscored a Hawkish Fed
Gold costs fell 1.2% on Thursday as normal market sentiment deteriorated, producing a risky Wall Street buying and selling session. The Dow Jones, S&P 500 and Nasdaq 100 sank 1.05%, 1.45% and a couple of.18%, respectively. As a end result, the VIX market ‘fear gauge’ soared about 9.6%, essentially the most since September. Meanwhile, the haven-linked US Dollar gained cautiously.
Reduced liquidity attributable to thinner buying and selling circumstances earlier than Christmas means markets will be delicate to occasion threat. This got here in the type of revisions to US third-quarter GDP information. Growth clocked in at an annualized tempo of three.2% q/q versus the two.9% estimate. Meanwhile, private consumption, a very powerful phase of GDP, shocked at 2.3% versus the 1.7% consensus.
The information underscored the Federal Reserve’s ongoing struggle towards the best inflation in a long time. Improving development may improve the probability of the so-called ‘soft landing’ and level to a extra strong economic system. In flip, that would imply a extra hawkish Fed. You can see that mirrored in Treasury yields, which rallied alongside the US Dollar.
Gold Technical Analysis
XAU/USD left behind an Evening Star candlestick sample, which is a bearish formation. Meanwhile, costs proceed buying and selling throughout the boundaries of a bearish Rising Wedge. A breakout and affirmation are missing presently, however a draw back push could open the door to resuming the broader downtrend that began earlier this yr. That locations the give attention to the 50-day Simple Moving Average (SMA). Otherwise, closing above 1824 exposes the June excessive at 1879.
XAU/USD Daily Chart
Friday’s Asia Pacific Trading Session – ASX 200, Nikkei 225, ASX 200 at Risk?
Friday’s Asia-Pacific buying and selling session is missing notable financial occasion threat. That locations the main target for merchants on threat urge for food. An additional deterioration in sentiment in the wake of Wall Street’s volatility locations the ASX 200, Nikkei 225 and Hang Seng Index in danger. This may depart gold weak to a rising US Dollar.
US Dollar Technical Analysis
The DXY US Dollar Index continues to idle above the important thing 103.93 – 104.39 help zone. This follows a string of losses since September. Prices stay below the downward-sloping 20- and 50-day SMAs. The latter continues to keep up a near-term draw back focus. Breaking above the latter may open the door to a bullish reversal. Otherwise, breaking help exposes the May low at 101.29.
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— Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com
To contact Daniel, comply with him on Twitter:@ddubrovskyFX