Market Rebound Continues; Gold Under Pressure
MarketPulse | Jan 08, 2019 10:40
- Markets
- Gold
US futures are back in the green ahead of the open on Tuesday, as risk appetite continues to gradually improve following Friday’s jobs data and Powell comments.
The combination of healthy labour market data and dovish commentary from the Fed Chair has provided relief to stock markets that endured a rough fourth quarter, to put it mildly. It’s too early to claim that the worst is behind us but the environment currently looks more favourable than it has for a few months. With the US and China in talks to de-escalate their trade conflict, the central bank showing a willingness to slow its tightening cycle and the economy still performing well, the markets may be looking a little more attractive.
That said, there’s still a sense of vulnerability that could quickly unravel any rebound we see. Trump remains unpredictable and talks could take a turn for the worse at any point.
The US government remains in partial shutdown and with Samsung (LON:0593xq) becoming the latest company to deliver a profit warning, not long after rival Apple (NASDAQ:AAPL) warned of weaker iPhone sales, there are red flags popping up everywhere. This will likely act as a drag on the markets in the near-term, at least.
Gold is under a little pressure on Tuesday, still struggling to tackle the $1,300 level that has prompted some profit taking following an impressive rally. The dollar is continuing to put up a fight even as it continues to look vulnerable, which would offer support to gold in its bid to break through its resistance. A more dovish Fed has clearly aided this move but still the dollar index continues to hold just above 95.5, although I do wonder for how long. It’s not looking good at the moment.
The improved risk environment at the start of the week doesn’t help the bullish case for gold at a time when the profit-takers are taking some of the shine off of it. Perhaps in the near-term we’ll see a bit of a corrective move, with $1,280 and $1,260 offering possible support, but I do think we’ll see a much stronger run at $1,300 soon that will test just how bullish the market really is.
Disclaimer: This article is for general information purposes only. It is not investment advice, an inducement to trade, or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. Ensure you fully understand all of the risks involved and seek independent advice if necessary. Losses can exceed investment.
Get The App
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.