Wisunofx Market Update: Powell Teams Up with “Trump Trade” as Strong Dollar Pressures Gold to Retreat to $2,563

Gold: Pressured by a Strong Dollar, Technical Rebounds in Focus

Gold prices remain under pressure, retreating from key resistance levels and currently trading at $2,563 per ounce. The primary factor for gold’s weakness is the strong dollar. In addition, outflows from gold exchange-traded funds (ETFs) indicate that investors are shifting their focus to risk assets.
From a technical standpoint, gold’s downward trend may persist in the short term, though oversold conditions could lead to potential rebounds. Additionally, any dollar pullback or increased safe-haven demand may lend some support to gold prices.

Euro: Weakness Continues Amid Poor Economic Data

The euro remains soft against the dollar, trading near its lows due to disappointing economic data from the Eurozone. Third-quarter GDP growth came in at a modest 0.4%, while industrial production fell sharply, exacerbating concerns about the Eurozone economy. In contrast, the robust performance of the U.S. economy creates a stark divergence, keeping the euro under pressure against the dollar in the near term.

Market Outlook: Potential Movements for the Dollar, Gold, and Euro

• Dollar: Likely to maintain its strength in the short term, supported by the “Trump Trade” and the Fed’s hawkish stance.
• Gold: Prices could face further downward pressure if the dollar remains strong but watch for oversold conditions that may trigger a technical rebound.
• Euro: Unless there is significant improvement in Eurozone economic data, the euro’s weakness against the dollar is expected to persist.

Key factors for investors to monitor:

1. Federal Reserve policy statements: Insights into the trajectory of future rate cuts.
2. Economic data from the U.S. and Europe: Including GDP, inflation, and industrial production figures.
3. Developments in Trump’s policies: Their potential impact on economic growth and market sentiment.

Wisunofx Market Update: Powell Teams Up with “Trump Trade” as Strong Dollar Pressures Gold to Retreat to $2,563

Dollar Strength Persists: Boosted by Trump Trade and Policy Support

On Friday, November 15, the U.S. Dollar Index hit a yearly high of 156.74 before retreating slightly to 156.63. The dollar continues to gain strength, fueled by optimism surrounding the “Trump Trade,” where market participants anticipate economic growth driven by Trump’s policies. While these measures may spark inflation, they are viewed as supportive of a stronger dollar.

Recently, U.S. inflation data showed stable performance, leading markets to expect a minor Fed rate cut of just 1 basis point on December 25. However, while rate cuts are typically considered bearish for the dollar, robust economic data and the Fed’s hawkish stance continue to drive demand for the greenback. Fed Chair Jerome Powell reiterated that the economy remains strong, and there is no urgency for further rate cuts, reinforcing bullish sentiment around the dollar.

Gold: Pressured by a Strong Dollar, Technical Rebounds in Focus

Gold prices remain under pressure, retreating from key resistance levels and currently trading at $2,563 per ounce. The primary factor for gold’s weakness is the strong dollar. In addition, outflows from gold exchange-traded funds (ETFs) indicate that investors are shifting their focus to risk assets.
From a technical standpoint, gold’s downward trend may persist in the short term, though oversold conditions could lead to potential rebounds. Additionally, any dollar pullback or increased safe-haven demand may lend some support to gold prices.

Euro: Weakness Continues Amid Poor Economic Data

The euro remains soft against the dollar, trading near its lows due to disappointing economic data from the Eurozone. Third-quarter GDP growth came in at a modest 0.4%, while industrial production fell sharply, exacerbating concerns about the Eurozone economy. In contrast, the robust performance of the U.S. economy creates a stark divergence, keeping the euro under pressure against the dollar in the near term.

Market Outlook: Potential Movements for the Dollar, Gold, and Euro

• Dollar: Likely to maintain its strength in the short term, supported by the “Trump Trade” and the Fed’s hawkish stance.
• Gold: Prices could face further downward pressure if the dollar remains strong but watch for oversold conditions that may trigger a technical rebound.
• Euro: Unless there is significant improvement in Eurozone economic data, the euro’s weakness against the dollar is expected to persist.

Key factors for investors to monitor:

1. Federal Reserve policy statements: Insights into the trajectory of future rate cuts.
2. Economic data from the U.S. and Europe: Including GDP, inflation, and industrial production figures.
3. Developments in Trump’s policies: Their potential impact on economic growth and market sentiment.