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Daily market commentary: Lower volatility on gold


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ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for January 16, 2020. This is not a trading advice. See details below:

FOREX

Despite the signing of a ‘Phase One’ trade deal between the US and China, which was supposed to reassure the markets and drive risk-on sentiment, trading has been somehow subdued without significant movement in the major currency pairs. This probably means that the impact of this event had already been baked into the forex markets in the build-up.

A currency pair that has certainly been interesting to follow during the last 24 hours is the ruble against the US dollar, with the Russian currency losing the best part of 0.5%, following the resignation of prime minister Medvedev. The unfolding of this political crisis will be followed by investors, as it could potentially disrupt President Putin’s long-term economic plans for the country.

Ricardo Evangelista – Senior Analyst, ActivTrades

GOLD

We are seeing lower volatility again on gold, with the bullion price steady just above the support level of $1,550. The recovery to this threshold is positive for gold, as it’s showing a healthy appetite for bullion, despite the general risk-on scenario which has followed the signing of the Phase One deal between US and China. On a broader perspective, investors are waiting for any further easing comments from central banks (starting with the Bank of England) which could be supportive for the yellow metal.

Carlo Alberto De Casa – Chief analyst, ActivTrades

EUROPEAN SHARES

Most European shares declined shortly after the opening bell before recovering minutes after. This volatile open in Europe is underlining investors’ state of uncertainty. The signing of the initial US-China trade deal hasn’t really impacted market sentiment, despite the expectation of the agreement having driven stock markets up almost everywhere in the globe for the past few months. Instead investors are preferring to stay cautious as there remains a wide distance between the two countries before Phase Two can be agreed.

China needs more time before entering into further talks with Washington as the nation must assess the effect of the Phase One deal first. In investors’ minds, this second round of negotiations is likely to set the pace on stocks and other risky assets for the first part of 2020 at least. So far, the Stoxx-50 Index is edging slightly higher with carmakers the worst performer despite solid data in December.

The DAX-30 Index is flying a bullish flag which could unlock further upward potential towards 13,500pts and 13,585pts by extension. The OMX-30 in Stockholm is also performing strongly so far with prices trading above 1,800pts.

Pierre Veyret– Technical analyst, ActivTrades

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Daily market commentary: Lower volatility on gold

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