After a strong run higher last week, this time out its been far more steady for equities, with most major stock markets trading not far from where they ended last Friday. Having said that, some news out this morning has threatened to cause some weakness into the weekend with a batch of data from the far east coming in worse than expected.

Chinese industrial production in particular was soft, with a year-on-year increase of 5% marking the lowest reading for this metric in 17 years and further supporting the notion of a slowing global economy. The release has caused European stock markets to fall lower while US futures also trade in the red in a small (so far) but broad risk-off move that has seen safe havens such as the Japanese Yen and Gold the biggest beneficiaries.

Gold hits highest level since April 2018

The largest market reaction to the Chinese data can be seen in Gold with the market jumping over 1% in response. The price of bullion has moved up to its highest level since April 2018 and at $1355/oz the market is only just over 1% from the 2016 peak. If the market can get up to $1390/oz then you have to go back to 2013 to find a higher price. The Chinese national stats bureau have since attempted to play down the significance of the poor data, but it's pretty obvious that their economy is slowing. Moreover, given the past lack of credibility associated with economic data from Beijing, the true figures could well actually be even worse.

Perfect storm brewing for Gold?

Perceived safe haven assets such as precious metals often thrive in periods of risk aversion and with US bond yields falling further it seems investors are becoming increasingly pessimistic about future growth prospects and at the same time expecting the US central bank to deliver a first rate cut in over a decade in the not too distant future.

The current economic climate could be seen as highly conducive for Gold bugs with a slowing economic growth and rising expectations of Fed rate cuts potentially providing a perfect storm for the precious metal.

CFD’s, Options and Forex are leveraged products which can result in losses that exceed your initial deposit. These products may not be suitable for all investors and you should seek independent advice if necessary.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: risk-off taking over on trade war escalation

The American Dollar sold off Friday, following US President Trump´s anger discharge on Twitter. The pair soared to 1.1152, its highest for the week, to finally settle at around 1.1140.

EUR/USD News

GBP/USD: Johnson and Tusk engaged in the blame-game

The GBP/USD pair flirted with the 1.2300 figure late Friday, ending the week with substantial gains around 1.2280, backed by Brexit hopes and the dollar’s broad weakness.

GBP/USD News

USD/JPY: lower lows at sight on the run to safety

The USD/JPY pair sunk Friday, following US President Trump’s fury with China and Fed’s head Powell, as the market rushed into safety. US yield curve inverted again, fears of recession rule.

USD/JPY News

Powell powerless against Trump's trade wars – US braces for recession, USD set to move

"The most powerful central banker in the world" – is how we and others characterize Fed Chair Jerome Powell. While that may be true – monetary policy is reaching its limits – especially in the face of a trade war.

Read more

Gold gains more than $30, eyes 2019 highs on Trump’s tweet

Gold continues to rise sharply amid concerns about the impact of the escalation in the US-China trade war. The demand for safe-haven assets emerged over the last hours, leading to a rally in the yellow metal. 

Gold News

Majors

Cryptocurrencies

Signatures