By Lukman Otunuga, Senior Market Analyst at FXTM
Asian markets were painted red on Tuesday with Chinese stocks leading losses, as disappointing PMI services data fuelled concerns over the nation’s sluggish economic recovery.
Europe saw a negative open amid the souring sentiment with investors focusing on final PMI data across the region, as well as a speech by ECB President Christine Lagarde.
In the currency space, the dollar is advancing across the G10 space amid the cautious mood, while Aussie bears are on a tear after the Reserve Bank of Australia kept rates on hold for a third time in the final meeting under Governor Philip Lowe.
Regarding commodities, oil is hovering around levels not seen since November amid OPEC+ supply cuts, while gold waits for a fresh fundamental spark.
Despite US markets being closed on Monday for the Labour Day holiday, this promises to be another eventful few days for world markets in the build-up to numerous central bank meetings in the weeks ahead.
All eyes will be on the Bank of Canada rate decision on Wednesday, which is expected to conclude with rates remaining at 5% amid the softening labour market and GDP growth.
Gold wobbles around $1935
Gold wobbled around $1935 in early trading on Tuesday, pressured by a stronger dollar and rising Treasury yields.
Despite last Friday’s choppy price action following the mixed US jobs report, gold seems to be searching for a fresh fundamental catalyst to trigger its next significant move.
In the meantime, the precious metal is showing signs of exhaustion on the daily charts with weakness below the 50-day SMA opening a path back toward $1920. Should the $1935 level prove to be reliable support, prices could retest the 100-day SMA around $1953.
For information, disclaimer and risk warning note visit: FXTM
FXTM Brand: ForexTime Limited is regulated by CySEC and licensed by the SA FSCA. Forextime UK Limited is authorised and regulated by the FCA, Exinity Limited is regulated by the Financial Services Commission of Mauritius