Gold exploded upward on Thursday, continuing its newly-resumed bullish momentum. It hit some spectacular all-time highs daily, firmly penetrating the important $3,200 psychological barrier level per troy ounce. The yellow metal traded right on this big psychological barrier. It was the result of a combination of positive and negative market factors, including lackluster consumer consumption and persistent currency headwinds.
The USDJPY currency pair maintained its downtrend through the Asian session. It set a new weekly low, marking its fourth day in a row of decline. Such was the decline Japan’s weaker-than-expected Q1 GDP print, leaving many questioning the country’s economic momentum, and failing to offset. Analysts noted that the lackluster GDP data did not provide much support for the yen. At the same time, the USD/JPY reached a new weekly bottom as traders turned their attention to the possible changes in US monetary policy.
In other currency news, AUD/USD traders saw the pair continue to hold below the 0.6400 level. The Aussie dollar trades choppily during that Australian dollar at the jobless rate on… Read more » It responded to a combination of positive and negative economic signals from home and abroad. The Reserve Bank of Australia (RBA) looks set to follow suit with a rate cut next week. This change will add to the volatility already inherent in the Australian dollar’s character.
On the international front, traders are sharply attuned to the effects of the recent US-China trade agreement. Some of the buzz created by the surprise adoption of the agreement has already worn off, adding to risk-averse attitude in markets. US inflation came in softer than expected earlier this week. This has further fortified the argument for additional rate cuts by the Federal Reserve. Consequently, USD bulls are on the backfoot, overcoming a scene dictated by stormy economic data.
The broader impact of these developments is already being felt by gold’s performance. As investors seek a safe-haven asset amid rising economic concerns and currency risks, interest in gold investments has surged. As we go to press, gold prices are at around $3,200 per troy ounce. Right now, market participants have their eyes trained on possible changes in US and foreign monetary policies.