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Daily wrap up 26 October 2021: Markets await central banks' meetings

26 Oct 2021 04:25 PM

Gold prices had noticeable fluctuations since the beginning of this week’s trading, and it declined today for the first time after 5 consecutive sessions of gains, as markets awaits meetings of a number of central banks and the signals, they may provide regarding the date of raising interest rates amid fears of high inflation.

Gold prices are currently trading below the $1,790 levels, which is an important support area above the uptrend line, after failing to surpass the $1,808 areas, these levels remain an obstacle to the continuation of gains for the yellow metal. On the other hand, US bond yields rose, which helped the US dollar recover from its losses over the past few days.

consumer confidence unexpectedly rose in October, pushing gold prices to decline, as confidence in improving labor market conditions offset concern about rising inflation, in a sign of the possibility of economic growth pick up during the last quarter of this year.

The Conference Board's Consumer Confidence Index rose in October to 113.8 compared to September's reading of 109.8.

Markets are awaiting meetings of the European Central Bank, the Bank of Canada, and the Bank of Japan, this week while the Fed will meet next week. Jerome Powell, Federal Reserve Chairman, has confirmed the start of the process of reducing the asset purchase program, indicating that inflation may continue to rise next year.

On the other hand, oil prices are heading towards their highest levels in several years, supported by global supply shortages and strong global demand, especially from the United States, the largest oil consumer in the world. Brent crude contracts are currently trading slightly above the levels of $85 a barrel, amid expectations from Goldman Sachs that it will reach the levels of $90 by the end of 2021, with the possibility of reaching the $100 levels.

With the beginning of the American session trading, the major stock indices hit record highs considering the markets anticipation of the earnings of many companies, led by technology companies, especially Facebook. Yesterday, Tesla's market value surpassed the $1 trillion barrier, surpassing Facebook to become the fifth largest company in terms of market value, after a car rental company ordered 100K cars from Tesla.

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