Gold dribbles near multi-month top, US Dollar plummets amid cautious markets

Market players extend the previous day’s moves with a lesser pace during early Friday as more clues of US inflation loom on the calendar. Even so, the US Dollar renews the one-year low and allows the commodities, as well as Antipodeans, to remain firmer.

With this, USDCNY leads the G10 currency pair gainers versus the USD followed by NZDUSD and EURUSD. While the downbeat USD can be considered the first reason for these moves, China’s optimism and hawkish ECB calls are some extra catalysts that play their parts.

Elsewhere, Gold remains firmer around the 13-month high marked the previous day while Crude Oil extends Thursday’s pullback from the highest levels since late January, mainly due to the recession woes.

Equities in Asia-Pacific grind higher while tracking sluggish US stock futures. However, shares in Europe and the UK remain firmer at the latest.

Cryptocurrencies aren’t left behind as BTCUSD and ETHUSD refresh the highest levels in 10 and 11 months respectively.

Following are the latest moves of the key assets:

• Brent oil extends the previous day’s pullback from 11-week high to $86.00, down 0.50% at the latest.
• Gold seesaws around 13-month high, around $2,040 as we write.
• USD Index drops to the lowest levels since late April 2022, printing four-day south run near 100.85 by the press time.
• Wall Street closed with notable gains while equities in the Asia-Pacific region stayed mildly positive. However, shares in Europe and the UK seem slightly positive during the initial hour.
• BTCUSD and ETHUSD seesaw at the multi-month high of around $31,000 and $2,100 at the latest.

It's all about inflation…

Although the chatters surrounding recession and geopolitics do provide background music to the latest market moves, traders are more concerned with the inflation phenomenon as the key central banks suggest policy pivot. Among them, the Fed’s inability to hike rates further, except from May’s already-given 0.25% lift, gain major attention amid recently downbeat signals about the easing price pressure in the world’s biggest economy.

As a result, the bonds remain in demand and weigh on yields, despite the latest corrective bounce, whereas the equities grind higher amid the upbeat start of the Q1 earnings season. The same drowns the US Dollar and propels the Gold price toward an all-time high. Further, Brent oil fails to cheer OPEC+ demand forecasts as a looming recession in the West joins Russia’s floating Oil for which there are fewer major buyers outside Asia.

EURUSD approaches multi-day top while NZDUSD struggles amid likely RBNZ pause in rate hikes after the recent bumper moves. Further, GBPUSD cheers Brexit optimism and mostly upbeat data at home while printing the 10-month high.

On a different page, BTCUSD and ETHUSD rally as the US Dollar weakness joins a successful break of psychological hurdles and no major negative reactions to the industry events which previously signaled the downside of the key cryptocurrencies.

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

US Retail Sales, Consumer Sentiment eyed

While the final prints of Eurozone inflation may entertain markets, major attention will be given to the monthly prints of US Retail Sales and the University of Michigan’s (UoM) Consumer Sentiment Index, as well as the inflation expectation figures. Should the US consumer-centric data fail to improve the US Dollar can extend the latest fall, which in turn may propel the Gold price toward the $2,100 hurdle.

May the trading luck be with you!