Gold Surges to New All-Time High as Markets Hone in on Cuts

In this video update, Richard Snow from Daily FX talks about the recent surge in the gold market. Gold prices have been soaring, reaching record highs and breaking important levels of resistance. The interesting thing is that despite this upward trend, US yields haven’t seen a significant decrease to bring about such a large response in the precious metal. However, many people are looking ahead to the June Federal Reserve meeting, where there is a high chance of interest rate cuts. Market expectations suggest there will be a 25 basis point cut instead of a 50 basis point cut.

There are a few other things happening that are affecting the market as well. China has expressed its goal of achieving 5% growth during the Chinese National People’s Congress. In addition, people are eagerly waiting for the US ISM services PMI data after being disappointed by manufacturing data last week. The Federal Reserve’s Vice Chair for Supervision, Michael Barr, is also speaking twice, which could provide more information on potential rate cuts. This week is packed with important events, including Jerome Powell’s testimony in front of Congress, the European Central Bank’s update on their monetary policy meeting, and the release of non-farm payrolls on Friday.

In Europe, the DAX index has seen some highs recently but is currently trading slightly lower. This may be because negative news is affecting US equities, such as fines against Apple, declining sales for Tesla, and difficulties with chip exports to China for AMD. Despite these potential setbacks, the overall trend suggests that pullbacks have presented opportunities to re-enter the bullish trend.

Looking ahead, there is some relief expected from the UK spring statement, which could include changes to national insurance contributions. The pound has shown some upward movement and is currently trading within a wide range. While it remains above the 200 SMA and 50 SMA, there is a possibility of a bullish bias. However, it may face resistance around the 1.2710 level.