GOLD
Gold prices surged to fresh highs during early Friday trading, breaching the $2,400 threshold for the first time. Bullion's ascent is buoyed by mounting apprehension surrounding a potential escalation in the tensions between Israel and Iran. As rhetoric between the two adversarial powers grows increasingly belligerent, the allure of haven assets intensifies, with investors bracing for a conflict fraught with significant geopolitical and economic ramifications. The ascent of gold prices is especially noteworthy against the backdrop of a strengthening dollar and the uptick in treasury yields, spurred by US consumer and producer prices surpassing expectations and consequently delaying the anticipated timing of the Federal Reserve's inaugural rate cut from June to November. Given these prevailing conditions, the trajectory for gold prices appears poised for further upside.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Stock markets edged higher in Europe on Friday despite uneven performances across Asia overnight and rising global uncertainty.
Despite a few volatility spikes, EU stock investors reacted positively to ECB President Christine Lagarde’s speech yesterday. The central banker reassured everyone, saying the ECB would stick to its rate-cut plan regardless of the recent hot inflation report in the US.
Most sectors are on the rise this morning, with tech, transportation, and energy shares being the top movers so far. This has led the STOXX-50 index above the 5,010pts level.
However, market volatility may not have decreased just yet, as investors are now switching their focus from monetary policies to rising geopolitical tensions in the Middle East and corporate profits with the kick-off of the Q1 earnings season.
The situation in the Middle East is indeed worrying, especially as the world now waits for Iran’s reaction to the recent attack on its embassy in Syria, which is having a significant impact on commodity-linked equities, such as mining and energy shares.
Regarding the corporate front, the European agenda isn’t going to be very busy for traders, but all eyes are likely to be on the other side of the Atlantic ocean as major banks such as JPMorgan Chase & Co, Wells Fargo & Co and Citigroup Inc. report their quarterly results.
Despite all these uncertain market drivers, the situation on EU indices looks positive from a technical standpoint.
The STOXX-50 index trades above the upper bound of its bearish flag pattern, which could mean that the correction started in April could be over and that investors are ready to take prices back to their last tops and beyond.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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