Article by: ETO Markets
According to the most recent Australian foreign trade data released by the Australian Bureau of Statistics, the country's trade surplus increased to 11,437 million MoM in December from 7,500 million projected and 7,129 million in the previous reading. Whereas imports show what is being demanded domestically, export data can provide a significant window into Australia's growth. The trade balance provides a preliminary indicator of the performance of net exports. A stable demand for Australian exports would result in a positive growth in the trade balance, which would be advantageous for the Australian dollar.
Before making directional bets, traders are waiting for clarity on the Federal Reserve's plan for rate cuts, which has kept the precious metal trapped in a trading range that has been in place for many days. The yellow metal is also very close to a multi-week bottom that was struck on Monday. As a result, the market's attention will be fixed on the publication of the most recent US consumer inflation data.
The US Dollar is expected continuing its consolidative price move in a well-known range leading up to the major data risk, notwithstanding the uncertainty around the exact date of the Fed's interest rate reduction. In addition to China's economic problems and geopolitical worries, this maintains a floor on the safe-haven gold price. Nonetheless, in light of the US economy's resilience, investors have been reducing their expectations for a more aggressive policy easing by the Fed. This ought to curb the non-yielding yellow metal and supports higher US Treasury bond yields.
Investors anticipate the report because they appear certain that the US Federal Reserve will cut interest rates by almost 150 basis points at the end of the year in response to remarks made by Fed Chairman Jerome Powell and colleagues that rates are almost at their high. Softer-than-expected US CPI data could therefore be good for the yellow metal and bad for the US dollar since a decline in US Treasury bond yields is anticipated. Conversely, traders would be unprepared if US inflation increased since they are heavily weighted toward a dovish Fed.
Gold's daily chart indicates a neutral bias in the yellow metal because buyers were unable to break through the most recent cycle high, which was reached on December 28 at $... The short-term trend for XAU/USD is slightly negative, and a decline to test the $… mark may intensify if sellers drive prices below the 50-DMA of $... Alternatively, if buyers enter the market and push prices over $…, that may open the door for a test of the cycle high noted above, which is around $…, before a rebound to $...
The significant decline that the API recorded overnight has not caused the price of oil to change. The primary cause of this was the simultaneous big rises in distillates and gasoline alongside the hefty decrease in crude barrels. In the event that the EIA's overnight figures show a decline on all fronts, oil prices are likely to rise.
WTI US Crude Oil fell back from its peak bids on Wednesday, which were at $…, to retest the $… handle as the 200-HMA continued to weigh on bids. The strategy remains a tough chop on an intraday basis, with WTI prices whipsawing in an undefined range in the first few weeks of 2024.
WTI has been forced into the low side by daily candlesticks, and the 200-DMA, which is priced in at $…, is the technical ceiling that will cap short-term price activity.
