Gold, XAU/USD, US Dollar, China, Crude Oil, RBA, AUD/USD, ECB, EUR/USD – Talking Points
- the gold price It seems to be looking for a trend with the price fluctuations
- The Reserve Bank of Australia kept the cash rate at 4.10% and traders sold off Australian dollar / US dollar in the news
- Some of the hawkish comments from the European Central Bank have had little effect on euro. Will further strengthen the discourse EUR/USD?
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The price of gold has stabilized in the trading session on Tuesday as the markets look somewhat dull with the United States out for a holiday.
Treasury yields maintained the gains seen through the end of last week with the benchmark 10-year note trading near 3.85%. The policy-sensitive 2-year note is back above 4.90% as markets await the Fed’s meeting minutes that will be released on Wednesday.
Further hopes of easing tensions between the United States and China took a hit today after Beijing announced export restrictions on gallium and germanium.
Metals are vital to semiconductors, telecommunications and electric vehicles. The move appears to be a retaliatory measure against the US strengthening chip restrictions on China.
Crude oil strengthened after Saudi Arabia and Russia pledged to extend their production cuts ahead of the OPEC+ meeting in Vienna this week. WTI futures hover around $70 while Brent is near $75. Live rates can be found here.
The Reserve Bank of Australia paused in its rate hike cycle today, leaving its cash rate target unchanged at 4.10%. AUD/USD fell while the ASX 200 found a firmer basis in the news.
Japanese Stock Index Nikkei 225 declined with slight decline in USD/JPY. Other Asia-Pacific stocks saw a quiet session.
EUR/USD has not moved much so far despite strong comments yesterday from Joachim Nagel, President of the German Central Bank and policy maker at the European Central Bank.
Mr Nagel will be speaking again today as well as his fellow ECB Governing Council member Yannis Stournaras. Christine Lagarde, President of the European Central Bank, will speak on Friday.
The full economic calendar can be viewed here.
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Gold may have rudderless so far this week into the US holiday, but the lackluster performance is supported by lower volatility as measured by GVZ.
The GVZ measures implied volatility across a gold ETF in a similar way that the VIX measures volatility across the S&P 500 stock index.
The DXY (USD) has also been in a sideways price move this week and it appears that the inflation-adjusted yield on the 10-year Treasury note (the real yield) is also waiting for the US back from vacation.
– By Daniel McCarthy, Strategist for DailyFX.com
Please contact Daniel via @employee on Twitter