The gold rush is on!

Stephen Innes SPI Asset Management

Gold Markets

Gold moved higher on trade concerns, and US rate expectations but has blasted through the critical 1350 level. With Geopolitical risk premium ratcheting higher on the back of Middle East tension and autonomy protest in Hong Kong, gold represents dependable insurance against those mounting geopolitical risk. Lots of headline risk to navigate through this weekend and beyond. Today's price action suggests the market is not long enough gold, especially by historical standards, for this elevated level risk as investors have remained far too complacent to mounting risk in Hong Kong and the smoulder explosive political powder keg in the Middle East.

In this environment, gold will remain super reactive to both headline risk and global recessionary waxing, so any negative will trigger another wave of buying. Buckle up !!

Oil Markets

Focus remains on oil markets

Oil prices have stayed bid during the Asia session. After yesterday's geopolitically induced oil spike; oil bears have gone into temporary hibernation as potential weekend news flow risk remains elevated.

The bearish narrative hasn't changed, the massive US inventory build in a wobbly economic climate hardly supports a bullish story. And that not even factoring in an escalation of US tariffs. So while I expect the downside to open next week, the set up is not great to run short into the weekend given probability of more animated and aggressive posturing from the US administration Iran hawks.

Author

Stephen Innes

SPI Asset Management

With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.