Market Overview
- Silver (XAG/USD) prices fell for a second consecutive day after reaching a 12-year high, despite bullish medium-term outlook due to geopolitical tensions and supply deficits.
- Gold (XAU/USD) prices remained flat as markets balanced the Fed's data-dependent stance with rising geopolitical risks.
- The Indian Rupee weakened against the US Dollar, hitting a three-month low due to escalating Middle East tensions and elevated Crude Oil prices.
- The British Pound strengthened against the Yen as the Bank of England maintained interest rates at 4.25%.
- The Euro weakened against the British Pound as the Bank of England maintained its interest rate due to persistent inflation concerns.
- The Turkish Lira weakened following the central bank's decision to maintain its One-Week Repo Rate at 46%.
Fundamental Analysis
- The Federal Reserve maintained a cautious policy stance, leading to a stronger US Dollar.
- Central banks are major Gold holders, with Gold seen as a safe-haven asset and a hedge against inflation and depreciating currencies.
- Geopolitical tensions, particularly between Israel and Iran, continue to influence global markets and currencies.
- The Bank of England kept interest rates steady at 4.25%, boosting the Pound against other currencies.
Technical Analysis
- EUR/USD: The pair is consolidating just below 1.15 with little movement in light US-holiday trade.
- GBP/USD: Despite recent decline, the long-term trend remains intact as the pair tests the 50-day MA support level at 1.3390.
- USD/JPY: The pair is trading defensively with near-term risk associated with the release of national CPI data.
- XAU/USD: Gold prices are consolidating below $3,400 as investors wait for clarity on potential US strikes on Iran.
Conclusion
- Market sentiment remains cautious due to geopolitical tensions and central bank statements.
- The US Dollar has strengthened against several currencies due to the Federal Reserve's policy stance and geopolitical concerns.
- Gold prices remain flat as markets balance the Fed's data-dependent stance with rising geopolitical risks.
- Investors should monitor key economic events, data releases, and central bank statements for potential trading opportunities.
