Gold
Although the dollar’s impressive overall performance and concerns about aggressive U.S. interest rate rises impacted on demand for metal and caused prices to fall for a fifth consecutive week, gold edged up on Friday as the dollar gain slowed.
Following a more than 2% decline in bullion prices on Thursday, the dollar gradually backed off recent 20-year highs, alleviating some of the pressure on demand for gold priced in the greenback among foreign investors.
In contrast to the larger rate increase that traders rushed to price in after a report on Wednesday showed inflation was accelerating, two of the most hawkish policymakers at the U.S. Federal Reserve said on Thursday they preferred another 75-basis-point interest rate increase at the central bank’s policy meeting this month.
The potential cost of storing non-yielding metal increases when interest rates and bond yields rise.
OIL
Oil prices are increasing again today as bargain hunters start to enter the market after a sharp decline this week. However, the price of crude and brent oil is now trading below the crucial level of $100, and as long as the price is trading below this level, the least-cost route is downward. This week, there was a significant decline in oil prices, mostly because traders and investors were concerned about the impact of a probable US economic recession. This week’s 41-year-high inflation report further alarmed markets, who were already concerned, and there have been expectations that Biden’s trip to Saudi Arabia will boost the country’s oil supplies.
In terms of technical analysis, the below chart shows that the price is moving above the 50-day SMA which is a positive sign. If the price continues to trade above this SMA, we could see more bulls coming to the market.
Cryptos
The price of bitcoin has struggled to maintain itself above the 20K level this week as it has been under pressure. This week’s cryptocurrency market has seen more bad news, as Celsius has now also fallen prey to increased volatility and Terra Luna’s demise. As a result of the firm filing for bankruptcy, traders and investors had even less trust in the cryptocurrency yield market, which offered ridiculous rates.
In terms of price movement, Ethereum, the second-largest cryptocurrency by market cap, and Bitcoin are both hanging on to two critical price levels: $20,000 for Bitcoin and $1,000 for ETH. Traders are anticipating an immediate price rebound.
From a tech perspective, volatility is low for the BTC as the price is trading near the 20-day SMA and within the Bollinger band. The price is also trading below the 50, 100, and 200-day SMA which means that bears are in control of the price.
Asian Markets
The Asian stock market traded mostly lower on the week’s last trading day. The Nikkei index soared by 0.52%. The HSI index decreased by 1.61%, while the KOPSI index increased d by 0.07%. The Shanghai index dropped by 0.45%.
Dow Jones and S&P 500: Market Breadth
The Dow Jones’ market breadth lost further momentum. 31% of the Dow Jones stocks are trading above their 200-day moving average.
The S&P 500 stock breadth also confirmed some loss in its momentum. 32% of the shares traded above their 200-day moving average.
Dow Jones Futures Today
Today’s trade of the Dow Jones futures is negative. Investors will be examining the US Retail Sales and Core Retail Sales figures in terms of economic indicators. Both figures will be made public at 12:30 PM GMT, with the Retail Sales m/m number expected to increase by 0.9 percent compared to the previous reading of -0.3 percent. The estimate for Core Retail Sales m/m is 0.7 percent, and the actual result was 0.5 percent.
The US Consumer Sentiment index, which will be eagerly monitored by traders, will also be released later today. The previous reading was 50, and the forecast is for 49.
The index has once again failed to break above the 50-day SMA on the daily time frame, and the Dow Jones futures are trading lower. Given that the price rejected the 50-day moving average in less than two weeks, it is expected that the index will see more declines in price. The Dow Jones index also keeps trading below the 100 and 200-day simple moving averages (SA) on the daily time scale, which is more evidence that the path of least resistance is biassed to the negative.
Regarding the RSI, it shows that prices are once more oversold on a daily time frame. The RSI is now trading at 35.
The near-term support is 29,298 while the resistance is 32,146.
Stock Market Rally
The S&P 500 stock index closed lower on Thursday; the index increased by 0.30%. The material sector led the index lower, and nine sectors closed lower yesterday.
The Dow index plunged on the second last trading day of the week; the Dow stocks moved the index lower by 0.46%. 11 shares advanced, while 19 shares closed lower.
The NASDAQ composite, the tech-heavy index, closed higher by 0.03% yesterday.
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