North Korea tensions have again dominated the agenda at the start of this week and will continue to remain a major obstacle facing risk-sensitive assets in the near-term.
For gold bugs, and even for their lesser brethren in silver, not only is the sun shining in the summer months, but the sun is truly shining on gold as a confluence of factors helps to propel the precious metal ever higher, and one wonders when the angst laden doom mongers will appear forecasting an overbought position.
Following big falls in some risk-sensitive assets on the back of North Korea tensions, a number of global stock indices and dollar currency pairs ended the session with impressive reversal-looking technical patterns as the dip buyers evidently stepped in to take advantage of the lower prices (see the technical outlook section below).
The current bullish trend for copper shows no sign of slowing just yet with the red metal touching a 3 year high largely driven by increasing demand from China(FXI, quote), along with a fall in inventories in the London warehouses.
The pound, already out of favour ever since the Bank of England’s last policy meeting a couple of weeks ago, fell further yesterday in response to softer-than-expected UK inflation figures.
The Australian dollar has been very volatile during the Friday session, initially dipping to a fresh, new low, and then exploding to the upside.
2018 Features in Ford’s New F-150.
The EURUSD pair initially dipped lower during the day on Friday, but then shot higher impulsively during the American session.
The Bank of England has left interest rates unchanged with only two of its MPC members voting in favour of a hike this month.
The economic calendar is taking a breather today but will return with bang tomorrow. Market participants are looking forward to two major central meetings as the Bank of Japan and especially the European Central Bank take centre stage.