Gold Defies Speculation Despite U.S. Debt Ceiling Deal

03 Jun 2023

Consumer Confidence (May), EUR

WHEN: WHAT IT HAD INFLUENCED:

30 MAY 2023 GBP and its subsequent pairs

WHAT HAPPENED: Consumer Confidence gauges the sentiment amongst consumers across the eurozone. A rising trend is often correlated with stronger consumption expenditure boosting GDP.

CB Consumer Confidence (May), U.S.

WHEN: WHAT IT HAD INFLUENCED:

30 MAY 2023 USD and its subsequent pairs

WHAT HAPPENED: Conference Board (CB) Consumer Confidence measures the level of confidence consumers have in the economy. When consumers are optimistic, they tend to spend more which increases consumption and overall economic growth.

USDZAR is currently in the upward channel. Further upside can be seen in the coming week.

CPI (YoY), AUD

WHEN: WHAT IT HAD INFLUENCED:

31 MAY 2023 AUD and its subsequent pairs

WHAT HAPPENED: The Consumer Price Index (CPI) measures the change in the prices of goods and services contained in a basket of consumer items. The Central Bank pays very close attention to this figure in its role of maintaining price stability.

AUDUSD is trading in downward channel. A further downside can be seen in the coming week.

Despite gold’s 3-day surge ending, it is still up on the week due to the ‘done’ status of the US debt deal.

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: The U.S. debt ceiling deal is done but gold isn’t quite dead yet, as some had been speculating.

Futures of the yellow metal settled down on Friday for the first time in three days. But the drop could not wipe gains over the three previous days, leaving gold in the positive for the week.

The front-month gold contract on New York’s Comex settled at $1,969.60 an ounce, down $25.90, or 1.3%, on the day. The benchmark for gold futures hit a two-week high of $2,000.65 in the previous session. For the week, Comex’s front-month gold contract posted a return of 1.3%.

The spot price of gold, which reflects physical trades in bullion and is more closely followed than futures by some traders, was at $1,953.19 by 13:30 ET (17:30 GMT), down $24.33, or 1.2%, as futures trading came to a close. Spot gold hit a one-week high of $1,983.44 on Friday before reversing.

Gold had a positive week despite the dollar rising for a second time in three sessions as forex traders reacted to the Senate passage for the debt ceiling deal that only needs President Joe Biden’s signature next.

GOLD is trading in a down channel; a downside will be seen in the coming days.

Oil up over 2% after US debt deal and jobs data; focus turns to OPEC+

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: -Oil prices rose over 2% on Friday after the U.S. Congress passed a debt ceiling deal that averted a government default in the world’s biggest oil consumer and jobs data fuelled hopes for a possible pause in Federal Reserve interest rate hikes.

The focus is now turning to a meeting of OPEC and its allies this weekend.

Brent futures rose $1.85, or 2.5%, to settle at $76.13 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.64, or 2.3%, to settle at $71.74.

The closes were the highest since May 26 for WTI and May 29 for Brent. For the week, both contracts were down about 1%, in their first weekly losses in three weeks.

Open interest in futures contracts rose on Thursday to the highest since July 2021 for Brent and March 2022 for WTI.

Oil traders will watch the June 4 meeting of OPEC+, the Organization of the Petroleum Exporting Countries (OPEC), and its allies including Russia.

WTI CRUDE OIL is trading in a down channel; a downside will be seen in the coming days.

Although Bitcoin has dropped under $26.5K, traders are looking for a “bullish surprise.”

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED: Bitcoin (BTC $27,096) bounced near multiple support trend lines into June 2 as market indecision remained in force.

Data from Coin Telegraph Markets Pro and Trading View showed BTC/USD hitting lows of $26,519 on Bit Stamp after the daily close.

The pair showed little signs of a trend change as a stalemate between bulls and bears continued to produce little volatility.

The collection of moving averages (MAs) and the short-term holder (STH) realized a price near $26,000, thus staying untested on intraday timeframes.

Analyzing the current setup, popular trader Crypto Ed considered the potential for upside topping out at $27,500.

To break the current impasse, Crypto Ed continued, Bitcoin would nonetheless need to tackle the area above $27,600.

“Now I think we bounce back toward $27,500 — resistance of the previous range high — and from there I will be looking for, possibly, shorts toward $25,000,” he confirmed.

Fellow trader Crypto Tony likewise urged caution until $27,500 returned. His focus was on the largest altcoin Ether (ETH $1,891), which rebounded from lows of $1,840 at the May monthly close to hitting $1,897 on the day.

Bitcoin is trading in a down channel; a downside will be seen in the coming days.

5 KEY EVENTS TO WATCH OUT

Retail Sales (MoM) (Apr) U.K.

WHEN: WHAT IT INFLUENCES:

06 JUNE 2023 GBP and its subsequent pairs

WHAT’S HAPPENING: Retail Sales gauges the change in the aggregate value of sales at the retail level across the country. It is an important indicator of consumer spending accounting for most overall economic activity.

A reading that is stronger than the forecast is generally supportive (bullish) for the EUR, while a weaker-than-forecast reading is generally negative (bearish) for the EUR.

Initial Jobless Claims, U.S.

WHEN: WHAT IT INFLUENCES:

08 JUNE 2023 USD and its subsequent pairs

WHAT’S HAPPENING: Initial Jobless Claims measures the number of people who filed for unemployment insurance for the first time during the past week. This is the timeliest U.S. economic data, but the market impact varies from week to week.

A reading that is stronger than forecast is generally supportive (bullish) for the USD, while a weaker-than-forecast reading is generally negative (bearish) for the USD

RBA Interest Rate Decision (June), AUD

WHEN: WHAT IT INFLUENCES:

06 JUNE 2023 AUD and its subsequent pairs

WHAT’S HAPPENING: The Reserve Bank of Australia (RBA) reports its decision on where to set the benchmark interest rate. As short-term interest rates are an important determinant of currency valuation, traders watch interest rate changes closely.

A reading that is stronger than the forecast is generally supportive (bullish) for the AUD, while a weaker-than-forecast reading is generally negative (bearish) for the AUD.

BoC Interest Rate Decision, CAD

WHEN: WHAT IT INFLUENCES:

07 JUNE 2023 CAD and its subsequent pairs

WHAT’S HAPPENING: The Bank of Canada (BOC) publishes its decision on where to set the benchmark interest rate. As short-term interest rates are an important determinant of currency valuation, traders watch interest rate changes closely.

A reading that is stronger than the forecast is generally supportive (bullish) for the CAD, while a weaker-than-forecast reading is generally negative (bearish) for the CAD.

GDP (QoQ) (Q1), JPY

WHEN: WHAT IT INFLUENCES:

30 MAY 2023 JPY and its subsequent pairs

WHAT’S HAPPENING: Gross Domestic Product (GDP) measures the change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

A reading that is stronger than forecast is generally supportive (bullish) for the JPY, while a weaker-than-forecast reading is generally negative (bearish) for the JPY.

EQUITIES IN THE COMING WEEK

FERGUSON PLC (FERG) to announce its Quarterly Results on 06 JUNE 2023, EPS estimated to 2.16 per share while revenue estimated 7.089B.
CAMPBELL SOUP COMPANY (CPB) to announce its Quarterly Results on 07 JUNE 2023, EPS estimated to 0.65 per share while revenue estimated 2.236B.
NIO INC. (NIO) to announce its Quarterly Results on 09 JUNE 2023, EPS estimated to –0.40 per share while revenue estimated 1.735B.
VAIL RESORTS, INC. (MTN) to announce its Quarterly Results on 08 JUNE 2023, EPS estimated to 8.80 per share while revenue estimated 1.27B.
GAMESTOP CORPORATION (GME) to announce its Quarterly Results on 07 JUNE 2023 EPS estimated -0.15 per share while revenue estimated 7.508B.