Gold prices hit a nearly two-week high on Wednesday, trading above $3,320 at one point during Wednesday’s Asian session. Market confidence boomed this week based off a slew of critical economic reports. This generally positive long-term trend is deservedly big news for the US and UK economies in particular.
Gold prices have gone through the roof as of late. This jump is motivated by deepening fiscal fears over the United States government, which just had its sovereign credit rating downgraded last Friday. This recent downgrade has played a role in driving down the strength of the US dollar, making gold even more attractive as an alternative investment. Gold prices are poised to rally even more, according to analysts, completing a bullish three-week uptrend.
The latest UK economic data has been the big change to the market influencers. In reality, it’s been frontline in changing the way traders and investors have made decisions. In April, year-on-year CPI inflation in the UK reached 3.5%. This was a bigger jump than the market forecast of 3.3%. This jump represents a significant leap from the 2.6% inflation rate seen in March. The Pound Sterling has been taking off. Following the release of unexpectedly strong UK inflation data, GBP/USD rose sharply on the day, climbing towards 1.3450 in European morning trade.
Despite gold price action, bears have not quickly dashed to the downside, keeping intraday advances above the $3,300 level. The industrial metal hit a one-and-a-half-week high throughout the Asian trading day. For now, it is poised to keep its rising trajectory.
No wonder that in April, China’s economic activity weakened sharply. The abruptness of this decline is alarming enough, but its implications for future global markets are even more troublesome. Analysts lament that uncertainty caused by continuing trade spats is eroding confidence from all corners of the Chinese economy.
“China April slowdown shows the impact of economic uncertainty” – www.fxstreet.com