Russia/China woes underpin gold prices amid mixed sentiment

Global markets remain jittery, despite Friday’s cautious optimism, as Russian default joins the chatters surrounding the ban on gold imports from Moscow. Adding to the risk-aversion could be the fears of a tough stand on China, as well as an economic slowdown in the US.

The US dollar, however, fail to gain bids amid anxiety ahead of the key data/events, which in turn offered additional support to the yellow metal prices. It should be observed that a rebound in the US Treasury yields failed to convince buyers of Antipodeans even as commodities manage to recover.

Cryptocurrencies cheer softer USD to extend the weekly gains but bulls remain cautious as regulatory concerns join fears of faster rate hikes.

Following are the latest moves of the key assets:

• Brent oil rises for the third consecutive day, up 1.0% at around $113.70.
• Gold prints the biggest intraday gains in more than a week as buyers poke $1,835.
• USD Index extends the previous weekly loss, down 0.25% intraday near 103.85.
• FTSE 100 marks 0.30% intraday gains but STOXX50 and DAX are both up around 1.20% by the press time.
• Wall Street closed with heavy gains on Friday, Nasdaq rallied more than 3.30%.
• BTCUSD rises 1.4% to float above $21,000 while ETHUSD more than 2.50% as bulls keep reins past $1,200.

Bear’s focus shifts to gold

Even if the market sentiment did improve on Friday, the risk-on has a short life during the new week as fears surrounding economic slowdown and central bank aggression join geopolitical headlines.

Russia is likely to witness further hardships as it registers the first default on the payment of bonds since 1918. Additionally challenging the risk profile are the headlines suggesting that four of the Group of Seven (G7) nations brace for banning gold and oil imports from Russia.

Elsewhere, the news that the US hints at North Atlantic Treaty Organization’s (NATO) hard stand on China joins the IMF’s fears of US economic weakness to drown the sentiment.

With this, the US dollar remains pressured after the first weekly loss in four but the AUDUSD fails to improve amid economic fears surrounding Australia. Further, the NZD/USD also couldn’t cheer the greenback’s weakness as the market’s grapevine hints at the RBNZ’s limited scope for aggressive rate lifts, as well as broad pessimism surrounding China, the key customer to Australia and New Zealand.

It should be observed that oil prices also rebound from a six-week low as the Western leaders prepare for more sanctions on Russian energy.

On a different page, BTCUSD and ETHUSD manage to extend the previous week’s rebound from a multi-month low as bears take a breather amid a softer USD. Even so, the bullish momentum remains questionable amid looming regulatory fears and the market’s indecision over the future of cryptocurrencies.

⏫ 🟢 Strong buy: USDCAD

⏬ 🔴 Strong sell: Nasdaq, silver, ETHUSD, Brent oil

⬆️ 🟢 Buy: USD Index, USDJPY

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD

US Durable Goods Orders, ECB’s Lagarde in focus

It will be another busy week for the global markets, starting with the monthly prints of the US Durable Goods Orders and a speech from ECB President Christine Lagarde. 

While today’s data and ECBspeak may entertain intraday traders, Wednesday’s ECB Forum will be crucial as the heads of the ECB, BOE and Fed will debate their next moves.

Additionally, qualitative headlines are also likely to keep traders active, which in turn requires more caution while trading any major moves.

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