On Wednesday, markets continue to exhibit caution, influenced by the negative performance of Wall Street in the previous session. This downward trend was primarily driven by declines in Apple and Oracle shares. Investors are carefully considering the potential impact of hawkish expectations surrounding both the European Central Bank (ECB) and Bank of Japan (BoJ). Additionally, they are assessing how these expectations could affect global economic growth and shape central banks' outlooks amidst the ongoing rise in oil prices. The price of oil is currently experiencing a surge due to cuts led by OPEC+ that have tightened oil markets.
As risk aversion grows, there is an increased demand for the US Dollar as a safe-haven asset. Consequently, this demand has put downward pressure on gold prices. Furthermore, US Treasury bond yields are rebounding after previously declining because market participants anticipate hot CPI data from the United States. This expectation may lead to another interest rate hike from the Federal Reserve either in November or December since there is a 93% probability that there will be no pause in September. These factors combined pose downside risks for gold prices which could fall below $1,900.
As risk aversion grows, there is an increased demand for the US Dollar as a safe-haven asset. Consequently, this demand has put downward pressure on gold prices. Furthermore, US Treasury bond yields are rebounding after previously declining because market participants anticipate hot CPI data from the United States. This expectation may lead to another interest rate hike from the Federal Reserve either in November or December since there is a 93% probability that there will be no pause in September. These factors combined pose downside risks for gold prices which could fall below $1,900.
