Stocks open lower as gold holds steady below $2,400

Geopolitical tensions in the Middle East bolster demand for safe-haven assets

By Farah Mourad | 16 April 2024

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  • Gold holds below $2,400 mark, displaying resilience amid downward pressure

  • Wall Street downturn echoes across Asia

  • Better-than-expected GDP growth in China


Gold maintains its allure as a focal point of attention, steadfastly holding below the significant $2,400 mark. Despite encountering downward pressure, the metal showcases resilience, hinting at its enduring appeal to investors. The observed narrow trading band suggests a potential consolidation phase, with gold hovering near its all-time peak. Notably, the ongoing crisis in the Middle East acts as a potent catalyst, amplifying investor interest in safe-haven assets like gold. It's intriguing to note, however, that amidst this backdrop, silver, platinum, and palladium register marginal declines, reflecting a nuanced divergence within the precious metals market.

Turning to the influence of the Federal Reserve, geopolitical factors provide support for gold prices, yet reduced expectations of a Fed rate cut exert upward pressure on the U.S. dollar. This dynamic creates a headwind for gold, constraining its upward momentum as the XAU/USD pair navigates resistance levels.

Stock Market

Wall Street witnessed a significant downturn fueled by escalating tensions in the Middle East. This turbulence reverberated across the Asia session, despite China's GDP growth in the first quarter of 2024 surpassing expectations. However, key economic indicators such as industrial production, retail sales, and urban investment fell short of projections, signaling potential headwinds for market sentiment.

As the European session commences, anticipation mounts for a lower opening, reflecting a cautious start amidst prevailing global market apprehensions.

Currency Market

the USD and CAD emerge as frontrunners at the dawn of the trading day, while the AUD and NZD lag behind, mirroring movements in the oil market.