Gold reverses US election-linked losses after FOMC rate cut

Fed reverses Trump-led moves ahead of mid-tier US data

On Thursday, Fed Chair Jerome Powell reassured markets about his job security, easing concerns over a potential dismissal by President Trump, even amid a hawkish FOMC statement. This led to a pullback in the US Dollar, allowing Gold to recover from earlier losses and boosting riskier assets like the Antipodeans.

Although the Fed's 0.25% rate cut holds less appeal for Dollar bears, ongoing trade tensions and geopolitical risks continue to drive demand for safe-haven assets. As a result, market sentiment remains cautiously optimistic, with the US Dollar Index (DXY) set for a weekly gain, while Gold fights to avoid a two-week downtrend.

However, a cautious mood ahead of the upcoming preliminary US University of Michigan (UoM) Consumer Sentiment Index and Inflation Expectations for November is keeping market momentum in check.

EURUSD, GBPUSD remain under pressure, USDJPY faces weekly loss

Despite recent retreats in the US Dollar, EURUSD and GBPUSD continue to struggle, heading for weekly losses. Concerns over economic challenges in the Eurozone, amplified by President Trump's tariff plans, weigh on the euro, while GBPUSD suffers from the Bank of England's rate cut and a lack of optimism around the new UK government and budget.

In contrast, USDJPY faces pressure as speculation grows over Japan’s potential market intervention to defend the Yen, alongside the Bank of Japan’s readiness for further rate hikes, despite political challenges.

Antipodeans eye positive weekly close

Unlike major currencies, the Australian, New Zealand, and Canadian dollars are on track to post weekly gains. This strength comes due to China’s stimulus measures, which have supported global demand, particularly for commodities. Alongside this, a wave of mostly upbeat economic data has lifted market sentiment, further bolstering the value of these currencies. The recovery in commodity prices, including key exports like oil, metals, and agricultural goods, has also contributed to the positive outlook for the Antipodean and Canadian dollars. These factors combined are helping the currencies of Australia, New Zealand, and Canada outperform their major counterparts this week. As a result, AUDUSD and NZDUSD prepare for the first weekly gain in six while USDCAD snaps a five-week uptrend.

Gold stays depressed but Crude Oil recovers

Despite a recent rebound, gold remains under pressure, held back by a stronger US Dollar and worries over global economic growth. Concerns are particularly focused on slowing growth in China and a pause in India’s festive demand, which has historically supported gold prices.

On the other hand, Crude oil prices remain resilient weekly, shrugging off a build in oil inventories. This strength is likely driven by delays in the planned supply increase from OPEC+ and rising geopolitical tensions in the Middle East, especially following President Trump’s victory.

Cryptocurrencies surge on Trump’s victory

The crypto market is emerging as a key beneficiary of Trump’s election victory, with Bitcoin (BTCUSD) and Ethereum (ETHUSD) set for their biggest weekly gains since mid-July and late May, respectively. This surge is likely driven by Trump’s past favorable stance towards cryptocurrencies and a significant influx of ETF investments, boosting market confidence and driving prices higher.

Latest moves of key assets

• WTI crude oil stays within an immediate trading range, posting mild losses around $71.90 by press time.
• Gold fades the previous day’s recovery from a three-week low, down half a percent to around $2,695 at the latest.
• The USD Index seesaws near 104.50 after reversing from a four-month high as we write.
• Wall Street closed mixed and so did the Asia-Pacific shares. Further, European and British equities also lack clear directions during the initial trading hour.
• BTCUSD and ETHUSD both remain on the front foot to around $79,950 and $2,920 respectively as we write.

US, Canada statistics eyed

After a busy week, market momentum is expected to be subdued on Friday, despite the release of important data. The Canadian monthly employment report, along with the US University of Michigan Consumer Sentiment Index and Inflation Expectations, will be closely watched, though they may not trigger significant market moves.

That said, the US Dollar could edge higher, supported by the Fed’s data-driven approach and Trump’s push for aggressive policies aimed at boosting growth. This may put pressure on EURUSD, GBPUSD, and Gold prices. On the other hand, USDCAD could join its Antipodean counterparts in posting weekly gains if Canada’s jobs report comes in stronger than expected.

Predictions for Key Assets

• Recovery Expected: USDCAD, USDJPY, US Dollar, Silver
• Further Downside Likely: AUDUSD, NZDUSD, GBPUSD
• Mostly Sideways Expectations: BTCUSD, ETHUSD, Nasdaq, Gold, DJI30, USDCNH
• Slow & Gradual Fall Expected: DAX, FTSE 100, EURUSD, Crude Oil

May the trading luck be with you!