Gold – Potential for the bigger drop [Video]
![Gold – Potential for the bigger drop [Video]](https://editorial.fxsstatic.com/images/i/gold-02.jpg)
Sell trade idea explained.
Author
Petar Jaćimović
FXCentrum
Petar Jaćimović was born on 8 July 1989 in Jagodina, Serbia.
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GBP/USD trades with mild losses below 1.3550 in the European session. The US Dollar recovers some ground amid ongoing Middle East tensions and hawkish expectations around the Fed's interest rate outlook, weighing on the pair ahead of US data releases.
EUR/USD struggles to capitalize on the overnight bounce and trades below 1.1600 in the European session on Tuesday. The data from the Eurozone showed that the annual HICP inflation rose to 3.3% in August from 2.9% in July, matching the market expectation, while the core HICP inflation edged lower to 2.4% from 2.5% in this period. In the second half of the day, JOLTS Job Openings and ISM Manufacturing PMI data will be featured in the US economic calendar.
Gold sticks to modest intraday losses around the $4,430 region heading into the European session, and remains well within striking distance of a one-and-a-half-week low, which was touched the previous day. US Federal Reserve Chair Kevin Warsh's comments last Friday lifted market bets for an imminent interest rate hike and undermined the non-yielding yellow metal.
Ripple, Cardano, and Dogecoin remain weak after double-digit losses last week, testing their crucial Exponential Moving Averages for immediate support. The technical outlook warns of further weakness in the prices of XRP, ADA, and DOGE as bullish momentum eases.
The rise in global yields continues unabatedly. Ongoing elevated oil/energy prices, markets anticipating tighter monetary policy and higher (fiscal) risk premia all are possible explanations for this trend move. Ongoing tensions in the Middle East pushed the oil price back to the $90/b area. While the move wasn’t that big as such, it supported a higher for longer narrative.
The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.
