Support
Inflation data boosts market sentiment
The Fed's cautious rate cuts might push US yields and the Dollar higher, which could limit gold's gains
The EUR/USD pair is showing a slight uptick
Gold has recovered from a dip below $2,700
WTI crude oil is trading above $69.90
In today’s market overview, key assets such as the EUR/USD currency pair, gold, and crude oil are showing notable movements as traders await crucial economic data and geopolitical developments.
EUR/USD
The pair is experiencing a slight uptick during the Asian trading session on Thursday, breaking a four-day losing streak that saw it reach a one-week low the day before. Currently, spot prices are hovering around the key 1.0500 level, with a modest increase of 0.10%. Traders are holding off on making significant moves as they await the highly anticipated European Central Bank (ECB) decision, which could provide fresh direction for the currency pair.
Gold market
XAU/USD has recovered from a dip below $2,700 in the Asian session but is still trading below the highest level seen in over a month earlier on Thursday. US consumer inflation data released on Wednesday reinforced expectations that the Federal Reserve will likely implement its third consecutive interest rate cut next week. Additionally, ongoing geopolitical tensions related to the Russia-Ukraine conflict, Middle East unrest, and concerns over potential trade tariffs under the incoming US administration continue to support gold as a safe-haven asset.
Meanwhile, the Fed's cautious approach toward further rate cuts, given stalled progress in lowering inflation to its 2% target, is pushing US Treasury yields higher. This, in turn, supports the US Dollar and limits further upside potential for gold. However, traders are viewing any pullbacks in gold prices as potential buying opportunities, with the US Producer Price Index (PPI) expected to provide the next market catalyst.
Oil Market
West Texas Intermediate (WTI) crude oil is trading just above $69.90 on Thursday, driven by concerns over weaker global demand growth and potential sanctions on Russia and Iran. The Biden administration is reportedly considering tighter sanctions on Russian oil exports, aiming to exert more pressure on the Kremlin ahead of Donald Trump's return to the White House, according to Bloomberg. Additionally, the European Union imposed new sanctions on Russia due to the ongoing war in Ukraine. These developments could lead to a tightening of global oil supplies, providing upward support for WTI prices.
