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NASDAQ 100, GOLD PRICE FORECAST:
Gold and the Nasdaq 100 current an unattractive risk-reward profile at this exact second following latest U.S. financial knowledgeWith U.S. inflation operating above the two.0% goal and the labor market showcasing distinctive resilience, Fed rhetoric might begin shifting in a extra hawkish route within the close to time periodFedspeak can be key within the close to time period
Most Learn: US Greenback Bid as Sticky CPI Poses Dilemma for Fed, Setups on EUR/USD, GBP/USD
Gold costs and the Nasdaq 100 could possibly be in danger of a bigger downward correction following the most recent set of client value and unemployment claims figures launched on Thursday. Because of this new all-time highs for the dear metallic and the know-how index might have to attend a bit longer.
On the inflation entrance, the December CPI report stunned to the upside, with the all-items index accelerating to three.4% from 3.1% prior. By way of labor market knowledge, final week’s purposes for jobless advantages sank to the bottom stage in three months, indicating that layoffs stay very restricted within the economic system.
US ECONOMIC DATA
Supply: DailyFX Financial Calendar
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With client costs comfortably above the Fed’s 2.0% goal and the job market showcasing distinctive resilience, the U.S. central financial institution can be reluctant to chop rates of interest sharply in 2024. This might shock markets given present expectations for about 135 foundation factors of easing for the yr.
Whereas Treasury yields moved decrease on the day, opposite to instinct, the pullback might not be associated to Thursday’s knowledge, however maybe to safe-haven demand following reviews that the U.S. and its allies might conduct airstrikes in opposition to Houthi rebels in Yemen.
Geopolitical dangers are at all times a wild card, however this example needs to be contained, that means no escalation right into a broader regional battle within the Center East. On that word, yields are prone to resume their advance as soon as the mud settles, however to get a greater sense of their trajectory, merchants ought to carefully comply with Fedspeak.
The next chart exhibits latest inflation developments for each the headline and core indicator.
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Supply: BLS
In gentle of latest occasions, merchants shouldn’t be stunned if Fed rhetoric begins to shift in a extra hawkish route, with policymakers pushing again in opposition to a charge minimize in March arguing that extra proof on disinflation is required to tug the set off. This could possibly be fairly bearish for valuable metals and tech shares.
For the explanations outlined earlier than, the risk-reward profile for each gold and the Nasdaq 100 doesn’t look enticing at this exact second. Whereas the outlook might change with the introduction of recent data, merchants ought to train warning for now, avoiding blindly chasing suspicious rallies.
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