Weaker USD and reversal in positioning to buoy Gold - TD Securities

Eren Sengezer FXStreet

In a recently published report, TD Securities analysts argued that a weaker USD and reversal in positioning could open the door for further gains in Gold.

Key quotes

"The USD's strong momentum is set to lose steam, as recent statements from President Trump accusing America's trading partners off currency manipulation and his break with tradition to criticize Fed policy provides a catalyst for fundamental factors. The severe flattening of the US yield curve and the lack of positive carry across the Treasury curve when hedging costs are factored in will be major headwinds that start to work against the greenback into 2018. With the ECB QE unwinding on the way, we see the euro trend towards the low 1.20s later this year. This should help deflate the DXY currency index, which has been such a negative for gold of late."

"USD optimism, trade and EM angst have prompted investors to shun gold, dragging net positioning near the lower bound as money mangers hold excessive shorts and are significantly underweight. In fact, further analysis suggests gold traders hold significant amount of dry-powder to increase their bullish bets, but are constrained on the short-side."

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD weakens to four-week lows near 1.1750

EUR/USD’s selling pressure is gathering pace now, approaching the area of multi-week troughs in the mid-1.1700s on Thursday. The pair’s intense decline comes on the back of another day of solid gains in the US Dollar, particulalry exacerbated following firm prints from the weekly US labour market.

GBP/USD drops further, hovers around 1.3460

In line with the rest of its risk-linked peers, GBP/USD faces increasing selling pressure and recedes toward the 1.3460 region, or four-week lows, on Thursday. Cable’s persistent pullback comes in response to the continuation of the recovery in the Greenback amid a solid US data and a divided FOMC when it comes to the Fed’s rate path.

Gold clings to daily gains near $5,000

Gold struggles for direction and clings to its daily gains around the key $5,000 mark per troy ounce on Thursday. The precious metal sticks to the bid bias amid reignited geopolitical tensions in the Middle East and despite marked gains in the US Dollar and rising US Treasury yields across the curve.

Ripple slips toward $1.40 despite SG-FORGE tapping protocol for EUR CoinVertible

XRP extends its decline, nearing $1.40 support, as risk appetite fades in the broader market. SG-FORGE’s EUR CoinVertible launches on the XRP Ledger, leveraging the blockchain’s scalability, speed, security, and decentralization.

Hawkish Fed minutes and a market finding its footing

It was green across the board for US Stock market indexes at the close on Wednesday, with most S&P 500 names ending higher, adding 38 points (0.6%) to 6,881 overall. At the GICS sector level, energy led gains, followed by technology and consumer discretionary, while utilities and real estate posted the largest losses.

Injective token surges over 13% following the approval of the mainnet upgrade proposal

Injective price rallies over 13% on Thursday after the network confirmed the approval of its IIP-619 proposal. The green light for the mainnet upgrade has boosted traders’ sentiment, as the upgrade aims to scale Injective’s real-time Ethereum Virtual Machine architecture and enhance its capabilities to support next-generation payments.