Central banks to switch from FX to gold reserves [Video]

Ipek Ozkardeskaya Swissquote Bank Ltd

Gains in equities reversed on Thursday, but industrial metals traded south, and crude oil cheapened despite a tense geopolitical environment, as the worries that such a spike in energy and commodity prices would certainly curb the economic growth and slow the global demand took over the worries of a tighter supply.

The central banks are increasingly concerned about inflation, and the major ones start giving out signals that they won’t let inflation run too hot, even if it means a slower growth. Christine Lagarde announced on Thursday that the ECB is ready to take ‘whatever action is needed to pursue price stability and to safeguard financial stability’ in Europe.

Inflation in the US advanced to 7.9% in February as expected, and that number doesn’t even take into account the latest surge in energy and commodity prices due to the Ukrainian war.

In commodities, the upside potential in gold is more than just a safe haven hedge, as the rising geopolitical tensions and the latest sanctions imposed on the Russian central bank will bring the central banks around the world to reconsider their FX holdings, and start shifting towards a nationless gold.

The price of an ounce eased below the $2000 mark, yet the price pullbacks could be seen as interesting buying opportunities for those who bet that it’s time for gold to shine again.

Inequities, the high market volatility and limited visibility makes it hard to give a clear prediction yet the Chinese stocks continue suffering badly, as the prospects are getting worse by the day.

Author

Ipek Ozkardeskaya

Swissquote Bank Ltd

Ipek Ozkardeskaya began her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked in HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients.

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.