(02 March 2020)DAILY MARKET BRIEF 2: Gold recorded wild swings
Gold recorded wild swings last Friday. The price of an ounce tanked to $1562 despite the heavy sell-off in the equity space. The precious metal
traded near the $1600 on Monday. The record-high speculative long positions warn that improved risk appetite could trigger decent
headwinds in gold prices moving forward. A return to $1500 per oz would not be extravagant.
In the currency markets, it is about time
for the US 10-year yield to rebound from an all-time low near 1% and give a boost to the US dollar.
The euro, which had a fantastic week
against the greenback, is expected to lose some field as levels above 1.10 should be tempting for entering a bearish bet on the single
currency. A move below 1.0960, the major 38.2% Fibonacci retracement should send the pair back to the bearish consolidation zone.
An
upturn in the US dollar could further accelerate the sell-off in Cable. Mounting no-deal Brexit worries could encourage a further downside
development in Sterling toward the 200-day moving average, which currently stands a touch above the 1.27 mark.
Due today, the final
PMI manufacturing data in Europe and the US deserves some attention, but a downside revision in data should not slow the market recovery.
By Ipek Ozkardeskaya
