Gold prices have surpassed the $2,720 mark per troy ounce for the first time since mid-December, marking a significant milestone in the precious metals market. This surge comes amidst a corrective move in gold that has persisted for another week. Meanwhile, global markets remain on edge as the Bank of Japan (BoJ) is anticipated to raise interest rates at its first meeting in 2025. The USD/JPY currency pair experienced intraday selling pressure following Japan's positive Machinery Orders data release. Additionally, the AUD/USD pair saw a weakening to around 0.6190 during the early Asian session on Monday, reversing a two-day losing streak.
In the context of foreign exchange markets, Euro and Pound traders are shifting their focus towards Purchasing Managers' Index (PMI) data. The backdrop of tax cuts and the Federal Reserve's future actions remains a topic of speculation. Monday's US market closure due to the Martin Luther King Day bank holiday further slowed trading activities, with attention turning towards former President Trump's upcoming inauguration.
The USD/JPY pair's recovery stalled from sub-155.00 levels, which was a near four-week low reached last Friday. The recent upbeat Machinery Orders data from Japan contributed to this intraday selling pressure. As traders anticipate potential moves by the BoJ, rising bets on a rate hike have added pressure to the AUD/USD pair, capping its gains.
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The AUD/USD pair's recent activity highlights a shift in sentiment as traders react to global economic indicators and central bank policies. As the markets brace for potential impacts from geopolitical events and economic policy shifts, currency pairs like USD/JPY and AUD/USD remain under close scrutiny by investors and analysts alike.