Title: Asia-Pacific Forex Market Wrap: Gold Reaches Record High Above $2,350 Amid Global Economic Concerns
Original Author: Justin Low, ForexLive via TradingView News
The Asia-Pacific foreign exchange (FX) session on April 9, 2024, unfolded against a backdrop of volatility in global markets, with traders closely monitoring developments in precious metals, central bank policies, and geopolitical tensions. The standout move of the session was a fresh surge in gold prices, which continued its relentless march higher to breach yet another record, climbing above $2,350 per ounce. This milestone reflects growing investor interest in havens amid persistent economic uncertainty, inflationary concerns, and shifting rate expectations.
Gold Hits New Historic High Above $2,350
Gold continued its explosive rally during Asia-Pacific trading hours, advancing to another all-time high and exceeding the coveted $2,350 level. Investors remained firmly in buy mode, extending the six-week streak of gains for the precious metal.
Key drivers of the gold rally:
– Safe-haven demand in response to geopolitical tensions, including ongoing conflict in the Middle East and strained relations between the US and China.
– A weakening US dollar in recent sessions as expectations build around eventual rate cuts by the Federal Reserve.
– Focus on real yields, which remain compressed and supportive of gold, a non-interest paying asset.
During the Asia session, gold reached an intraday high of $2,365. Spot prices were trading strongly in early European hours, displaying resilience against a slight rebound in the US dollar. The bullish momentum has been building ever since gold decisively cleared the psychological barrier near $2,200 in March. Since then, dip buying has increased dramatically, with speculators, central banks, and institutional investors all participating in the rally.
A variety of technical indicators continued to align with the ongoing uptrend:
– Relative strength index (RSI) remained elevated but not overbought, giving room for further upside before a pullback might occur.
– Moving averages, including the 50-day and 200-day, maintained their upward slope, supporting the broader bullish bias.
– Breakout patterns on the daily and weekly charts signal that gold’s gains have further room to run if key support levels hold.
Little Movement in Major Currency Pairs
Despite the excitement in commodities, Asia-Pacific FX markets were relatively subdued throughout Tuesday’s session, with most currency pairs trading in narrow bands. Many traders appeared to remain on the sidelines ahead of more significant market-moving events later in the week, such as the release of US Consumer Price Index (CPI) data due Wednesday and various central bank speeches.
Notable activity and developments from the session included:
1. US Dollar (DXY index)
– The US dollar attempted a modest rebound after a soft performance in the previous New York session.
– DXY found partial support at 104.00 but lacked strong follow-through to reclaim prior highs.
– Traders remain cautious ahead of the CPI report, which could influence upcoming Federal Reserve rate decisions.
2. Japanese Yen (USD/JPY)
– USD/JPY traded mostly sideways around the 151.60–151.70 area after a volatile start earlier in the week.
– Yen watchers stayed alert for further potential intervention from Japanese monetary authorities. No official comments or actions were made overnight, but verbal jawboning in previous sessions signaled elevated sensitivity to excessive yen weakening.
– Traders speculated that the Bank of Japan could step in if the USD/JPY exchange rate tested the 152.00 barrier, which many see as a red line for policymakers.
3. Australian Dollar (AUD/USD)
– The Aussie dollar saw limited movement, fluctuating slightly below 0.6600. Concerns about Chinese economic weakness are weighing on AUD sentiment, given Australia’s trade reliance on China.
– Lack of major domestic economic data kept the pair rangebound.
4. Chinese Yuan (USD/CNH)
– Offshore yuan (USD/C
Explore this further here: USD/JPY trading.