Risk aversion movements can be observed on the global financial markets today, with European stock indices falling by 0.5-1.5%. This is a reaction to the generally rather rough session on Wall Street, when the main American stock indices fell by 0.6-1.7%. The decline on Wall Street was again caused by comments from Fed Chairman Powell, as well as a weak auction of 30-year US bonds. Everything outside the market rates pushed the metals down today.
Fed President Powell Vera said that he is not sure whether the Fed’s position is restrictive enough, and added that the bank will not hesitate to raise rates further if the development of inflation requires it. While the money market still doesn’t see a day out of rates soon, the full price of the first rate dream has been pushed back from June 2024 to July 2024. An hour before, Powell missed, the 30-year Treasury bond auction took place. The supply-to-cover ratio fell to 2.24, the lowest since December 2021, suggesting that demand for bonds has weakened, contrary to recent market movements.
Gold is trading down 0.5% today, stbro down 0.6% and platinum down 1.3%. Palladium was the biggest laggard with a 3.7% drop as the price free-falled after a public dip below the psychological level of $1,000 an ounce. Looking at the GOLD chart in the D1 interval, we can see that the precious metal has erased all public gains and is trading below $1,950 per ounce. If the price continues to decline and gold closes the day below the $1,950 support, it could be a sign that deeper declines may be in the offing.
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