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Daily market commentary: Gold rose with its safe-haven appeal increasing as several countries in the APAC region continue to tighten restrictions
The dollar is edging lower during early Wednesday trading, cancelling some of the previous session gains. On Tuesday, the Dollar Index gained more than 0.5 following the publication of US inflation numbers that surprised to the upside, with the year on year reading reaching 5.4%. It was the highest jump in inflation since 2008, increasing the pressure on the Fed to bring forward the timing of the tapering of its policies, a scenario that clearly supports the dollar.
Gold rose during early Wednesday trading, with its safe-haven appeal increasing as investors reacted to news that several countries in the Asia-Pacific region continue to tighten restrictions in efforts to halt rising COVID cases. However, the precious metal’s gains were capped by the strengthening of the dollar, that followed the publication of US inflation data showing the greatest jump in consumer prices since 2008.
Shares slid slightly lower after the opening bell on Wednesday, driven down by travel and leisure stocks as Delta variant worries continue to weigh on market sentiment. Most benchmarks are now testing their short-term major support levels, in a pull-back move, after this morning’s slew of solid inflation data from Spain and Sweden following yesterday’s spike in US data. Worries over rising prices remain the most important market driver this week with many investors questioning the “transitory” effect first described by the Fed. Most market operators are likely to scrutinize Jerome Powell’s tone about the economic and monetary outlook during his testimony tomorrow before taking any significant decisions. Meanwhile, traders will pay attention to the US PPI release as well as Crude Oil Inventories data due later today, while digesting another batch of corporate results from the banking sector with reports from Bank of America, Blackrock, CitiGroup and Wells Fargo.
Pierre Veyret– Technical analyst, ActivTrades
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Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
