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.

 

This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD recovers toward 1.0850 ahead of US data

EUR/USD recovers toward 1.0850 ahead of US data

EUR/USD regained its traction and recovered to the 1.0850 area after falling toward 1.0800 earlier in the day. The upbeat PMI data from Germany and the EU support the Euro on Thursday as market focus shifts to Manufacturing and Services PMI data from the US.

EUR/USD News

GBP/USD clings to small gains above 1.2700

GBP/USD clings to small gains above 1.2700

GBP/USD trades marginally higher on the day above 1.2700. The PMI data from the UK showed that Composite PMI edged lower to 52.8 in May (preliminary) from 54.1 in April, limiting Pound Sterling's gains ahead of key data releases from the US.

GBP/USD News

Gold stays in negative territory below $2,370

Gold stays in negative territory below $2,370

Gold struggles to stage a rebound and trades in negative territory below $2,370 following Wednesday's sharp decline. The benchmark 10-year US Treasury bond yield holds steady above 4.4% and makes it difficult for XAU/USD to keep its footing ahead of US PMI data.

Gold News

As Ethereum spot ETF approval nears, these altcoins could explode

As Ethereum spot ETF approval nears, these altcoins could explode

It is not surprising that altcoins related to Bitcoin saw a major rally post-Bitcoin spot ETF approval. Likewise, tokens closely related to Ether could ride the ETF approval wave. Ethereum Classic, Pepe, Floki and other DeFi tokens could gain momentum as the ETH ETF approval deadline nears. 

Read more

US S&P Global PMIs Preview: Economic expansion set to persist in May

US S&P Global PMIs Preview: Economic expansion set to persist in May

On Thursday, S&P Global will issue its flash estimates of the United States (US) Purchasing Managers Indexes (PMIs), a monthly survey of business activity. The survey is separated into services and manufacturing output and aggregated into a single statistic, the Composite PMI.

Read more

Majors

Cryptocurrencies

Signatures