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Global markets kicked off the week on a positive note as softer U.S. PCE inflation data reinforced expectations of Fed rate cuts, fueling demand for risk assets. Gold surged near record highs, oil prices eyed further gains, and major currencies like GBP, AUD, and NZD found support against the Dollar, while government shutdown concerns added to the USD’s weakness.
Gold (XAU/USD) is trading just below record highs near $3,750, extending its upside as U.S. PCE inflation data came in softer than expected. This has boosted market confidence that the Federal Reserve may move toward rate cuts sooner, enhancing Gold’s appeal as a non-yielding safe-haven asset.
Geopolitical Risks: Geopolitical Risks: Ongoing concerns over U.S. fiscal instability and global tensions are lending additional safe-haven support to Gold.
US Economic Data: Softer-than-expected PCE inflation confirmed cooling price pressures, reinforcing dovish Fed expectations.
FOMC Outcome: Markets now see a higher probability of rate cuts in upcoming meetings, which could reduce Treasury yields and support Gold.
Trade Policy: U.S. tariff risks remain in the background but have not significantly impacted Gold’s trajectory today.
Monetary Policy: The Fed’s dovish tilt continues to be the primary driver, with investors betting on policy easing into year-end.
Trend: Strong bullish momentum continues after holding above the $3,700 support zone.
Resistance: Immediate resistance is seen at $3,780, followed by the all-time high near $3,800.
Support: Initial support lies at $3,720, with stronger support at $3,680.
Forecast: Gold is likely to test new record highs if Fed dovish sentiment persists, though profit-taking near $3,800 could trigger short-term pullbacks.
Market Sentiment: Strongly bullish as investors rotate into safe-haven assets amid lower yields and a weaker Dollar.
Catalysts: U.S. government shutdown risks, upcoming Fed speeches, and fresh inflation data will determine whether Gold can sustain its rally above resistance.
WTI crude oil is trading around $63.20–$63.50, attempting to resume its upside after recent consolidation. Softer U.S. PCE inflation data has weakened the U.S. Dollar and boosted expectations of Fed rate cuts, which in turn support demand prospects for oil.
Geopolitical Risks: Ongoing Middle East tensions and global supply chain concerns continue to add a risk premium to oil prices.
US Economic Data: Softer inflation has raised hopes of stronger U.S. demand recovery, aiding oil bulls.
Trade Policy: U.S. tariffs remain focused on pharmaceuticals, with limited direct impact on energy markets for now.
Trend: Consolidation phase with signs of bullish reversal.
Forecast: WTI is likely to climb higher if Fed dovishness continues, though oversupply concerns may cap gains near $65.00.
Market Sentiment: Cautiously bullish, with traders weighing Fed optimism against oversupply concerns.
Catalysts: U.S. inventory data, Fed commentary, and geopolitical developments will be key drivers of WTI’s short-term direction.
GBP/USD is trading above 1.3400, supported by softer U.S. PCE inflation data that reinforced Fed rate cut bets. The weaker U.S. Dollar has provided tailwinds to Sterling, even as the UK economy continues to face growth headwinds.
Geopolitical Risks: Uncertainty around U.S. government stability and global trade risks maintain investor caution.
US Economic Data: Softer PCE data fuels speculation of Fed easing, weighing on the Dollar.
FOMC Outcome: Expectations for rate cuts remain intact, lowering U.S. yields and boosting GBP/USD.
Trend: Short-term bullish bias as the pair extends recovery.
Resistance: First resistance at 1.3450, followed by 1.3500.
Support: Immediate support rests at 1.3360, then 1.3320.
Market Sentiment: Positive for Sterling as Dollar weakness dominates.
Catalysts: UK economic releases, U.S. government shutdown risks, and Fed commentary will shape near-term price action.
AUD/USD is holding firm, benefiting from broad U.S. Dollar weakness after soft U.S. PCE data and rising risks of a U.S. government shutdown. Traders also expect the Reserve Bank of Australia (RBA) to keep interest rates unchanged, reinforcing stability for the Australian Dollar.
Geopolitical Risks: Global growth concerns and U.S. fiscal uncertainty influence sentiment.
US Economic Data: Softer inflation data continues to weaken the Dollar, favoring AUD.
FOMC Outcome: Fed dovish expectations support higher-yielding currencies like the Aussie.
Trend: Short-term bullish as buyers step in near recent lows.
Resistance: Key resistance at 0.6530, followed by 0.6570.
Support: Immediate support sits near 0.6470, then 0.6430.
Forecast: If AUD/USD sustains above 0.6500, further upside toward 0.6570 is likely.
Market Sentiment: Improving, as traders favor risk currencies amid Fed dovish bias.
Catalysts: RBA policy decision, Chinese economic data, and U.S. shutdown developments will guide momentum.
NZD/USD is trading firmer above 0.5750, supported by growing concerns over a potential U.S. government shutdown that has weighed on the Dollar. Coupled with dovish expectations from the Fed, the Kiwi is gaining traction despite broader global uncertainties.
Geopolitical Risks: Heightened U.S. fiscal uncertainty drives safe-haven unwinding of the Dollar.
US Economic Data: Softer PCE inflation reinforces downside pressure on USD.
FOMC Outcome: Dovish Fed expectations continue to back NZD strength.
Trade Policy: New Zealand’s trade ties with China provide indirect support as Chinese stimulus lifts sentiment.
Trend: Short-term bullish recovery above recent lows.
Resistance: Initial resistance at 0.5790, with stronger barrier at 0.5830.
Support: First support at 0.5720, followed by 0.5680.
Forecast: Sustained momentum above 0.5750 could target 0.5830, though U.S. fiscal headlines remain decisive.
Market Sentiment: Risk appetite is cautiously improving as Dollar weakens.
Catalysts: U.S. government shutdown developments, Fed commentary, and Chinese growth signals will be key drivers.
With rate cut bets gaining momentum and U.S. fiscal risks in play, traders are recalibrating their positions across commodities and FX markets. Attention now turns to upcoming Fed commentary and key data releases, which will determine whether the bullish momentum in Gold and risk-sensitive currencies can extend further into the week.
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