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Gold prices fell to a two-week low on Thursday as signs of easing trade tensions boosted risk appetite and reduced golds safe-haven appeal, while a stronger dollar also weighed on gold prices. "The market remains confident that the United States will soon sign a lower tariff agreement with other countries, and this optimism, coupled with a stronger dollar, is weighing on gold prices," said Giovanni Staunovo, an analyst at UBS. Investors are waiting for Fridays non-farm payrolls report to gain further insight into the Feds policy direction. "A weak jobs report should support the Feds calls for further rate cuts this year and push gold prices back to $3,500 an ounce in the coming months," said Giovanni Staunovo.On May 1, institutional analysis pointed out that gold futures plummeted due to easing trade tensions and declining safe-haven demand. The strengthening of the US dollar further dampened enthusiasm for gold as a safe-haven asset and made dollar-denominated commodities more expensive for international buyers. The United States is likely to reach a trade agreement, and market optimism and risk appetite are rising. However, further losses may be limited because expectations of interest rate cuts have also been raised after the United States released a series of weak economic data. The US economy contracted by 0.3% in the first quarter. Lower interest rates usually stimulate demand for non-interest-bearing gold.Ukraines Foreign Minister: The EUs top diplomat has been informed of the mineral agreement reached with the United States.According to the Wall Street Journal: Citigroup hired Trumps former trade chief Robert Lighthizer.According to the Wall Street Journal: The U.S. government has commissioned L3Harris to completely transform a Boeing 747 once used by the Qatari government.

As the Fed Minutes weigh on the U.S. Dollar, AUD/USD bulls seek acceptance over 0.6700

Daniel Rogers

Nov 24, 2022 14:55

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Despite quiet around 0.6730-40 during Thursday's Asian session, the AUD/USD remained on buyers' radar. Possible causes include the massive selling of the US currency and the cautious optimism of the market.

 

The US Dollar Index (DXY) dropped the most in two weeks the day before the release of the minutes from the most recent meeting of the Federal Open Market Committee (FOMC), which revealed that policymakers addressed the need to delay rate hikes. According to the Federal Reserve Minutes, reports about the Federal Reserve's (Fed) "sufficiently restrictive" interest rate level also weighed on the dollar.

 

Significant bearish drivers for the AUD/USD pair in November were the worse US PMIs and the high Jobless Claims data. The US S&P Global Manufacturing PMI for November declined to 47.6 from 50.0 expected and 50.4 previously, while the Services PMI decreased to 46.1 from 47.9 anticipated and 47.4 previously. The S&P Global Composite PMI fell to 46.3 in November from 47.7 expected and 48.8 prior readings.

 

Despite this, the United States Weekly Jobless Claims jumped by the most since June, at 240K compared to 225K expected and 220K prior, boosting sentiment and weakening the US Dollar.

 

Alternately, robust prints of the US Durable Goods Orders, up 1.0% in October compared to 0.4% indicated estimates and a downwardly revised 0.3% previously, combined China's covid difficulties and negative prints of Australia's S&P Global PMI for November to challenge the AUD/USD bulls. The market's attention on the Fed Minutes and the likelihood of a Coronavirus recovery appears to have bolstered Aussie pair buyers.

 

Despite these wagers, Wall Street closed in positive territory, while US Treasury yields decreased and devalued the US Dollar.

 

A lack of noteworthy data/events and a US holiday may allow the AUD/USD pair to retain a portion of its recent gains. China's COVID-19 concerns and the Reserve Bank of Australia's dovish inclination may be on the same line (RBA). Bulls are poised to keep dominance despite diminishing prospects for quick Fed rate hikes.

 

A convincing upward breach of the 100-day simple moving average and a one-week-old declining trend line near 0.6695 and 0.6590, respectively, has buyers of the AUD/USD pair eyeing the monthly high above 0.6800.

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