Daily market commentary: Gold likely to have its worst month of the last few years

GOLD

Gold remains on the back foot during early Wednesday trading, with the precious metal likely to have its worst month of the last few years. These losses clearly correlate with the strengthening of the dollar, with the markets pricing in the Federal Reserve’s shift to a more hawking stance. In the current context, Friday’s release of non-farm payrolls will be closely followed by gold traders and could either accentuate the current trend or, if the numbers disappoint, offer some support for bullion prices.

Ricardo Evangelista – Senior analyst, ActivTrades

EUROPEAN SHARES

Stock markets in Europe fluctuated on Wednesday with tech and healthcare stocks offsetting losses from the travel & leisure sector as fear brought by the Delta variant lingers. However, the risk-on trading stance continues to prevail as investors welcomed another batch of reassuring economic data from the old continent while the ECB keeps on supporting the market. With the impact of the new variant downplayed by most investors amid successful vaccination campaigns, this bullish trading mood is likely to stay alive as long as Christine Lagarde keeps her dovish stance. However, this could change sooner than anticipated if solid macro data continues to pile up in Europe as the ECB, like the Fed, may have to adopt a more hawkish shift to achieve its inflation goals. That said, traders will keep their focus on the EU’s CPI data today, which could bring increased intraday volatility on most European benchmarks.