Spreadex Market Update
Gold to stay firm? Asian market up
An imminent hike in US interest rates is often followed by a large downturn on gold prices; however, this time round analysts believe the commodity’s status as a safe haven could well hold firm owing to uncertainties in the United States and Europe. Indeed, the last time the Fed raised interest rates, back in December, gold fell to a 10 month low but investors don't appear to be as nervous ahead of the inevitable hike next week. Speculative long positions held by hedge funds and other money managers have nearly tripled this year.
However, the 121,720 lots held as of the end of February are still woefully short of the 286,921 contracts held in July 2016. That was when gold was at its 2 year highs at $1,374.91 an ounce. Nevertheless, this smaller speculative position is actually another point in favour of gold remaining stable as it reduces the threat of a sharp drop should a flurry of positions be unwound. In general, higher interest rates make it less attractive to hold gold because the rate does not bear on its price. There is also the issue of a strong US dollar which makes gold more expensive for prospective buyers in other currencies.
"Eyes will no doubt be cast to the US’ non-farms payroll which is released this afternoon."
In Asia, stocks were edging up and the USD climbed to a seven week high against the yen. Most notably Japan’s Nikkei index rose by 1.5% with the change in the currency pair working in the favour of these big, global companies. Eyes will no doubt be cast to the US’ nonfarms payroll which is released this afternoon.
It's easy to open an account
- Fill in our simple online application form
- Fund your account
- Start trading the global markets instantly!
SEARCH FOR AN ARTICLE:
Enter a keyword and search for all relevant articlesMARKET ANALYSIS
RECENT POSTS
DISCLAIMER
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. For professional clients, spread betting and CFD trading can also result in losses larger than your initial stake or deposit.
Spreadex Ltd is authorised and regulated by the Financial Conduct Authority, provides an execution only service and does not provide advice in any way. Nothing within this update should be deemed to constitute the provision of investment advice, recommendations, any other professional advice in any way, or a record of our trading prices. This update does not constitute or form part of an offer of, or solicitation for a transaction in any financial instrument, nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefore. Any persons placing trades based on their interpretation of the comments or information within this update does so entirely at their own risk.
No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained within this update by Spreadex Ltd or any of its employees and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained within this update.
The information contained within this update is the intellectual property of Spreadex Ltd and is protected by UK and International copyright laws. All rights reserved. Users may however freely download, distribute and reproduce extracts of the contents, subject always to accrediting Spreadex Ltd as the source and providing a hyperlink to www.spreadex.com.
