USD flying, Gold correcting!
As you know, today and at 4 am in local time, the Russian Army attacked Ukraine, and it was enough to raise the storm in the markets.
Stocks tumbled at the open in New York on Thursday, while Asian markets already closed in red, and European markets also are losing ground. European markets opened just a few hours after Russia launched an invasion of Ukraine, and now, in the last hours Footsie lost 3.2%, DAX is down more than 4%, and France CAC40 lost 3.7%. This negative sentiment continued in the US markets as well. While western nations are preparing to announce more sanctions on Russia, in the first trading hours, Dow Jones lost 1.8%, SP500 eased1.2%, and NASDAQ is down by 0.7%, to test 20% below its record high.
On the other hand, while the main market driver was the Russian and Ukrainian conflict, we should not ignore the economic data. According to the US Department of Labor, initial jobless claims in the week ended February 18, are down to 232K from 249K in the week earlier. These great numbers decreased the four-week average also to 236.25K. In line with employment data, final numbers of Q4 GDP at 7.0%, in line with expectations, were higher than the initial 6.9% estimates.
These great data with a sharply increasing US dollar rate, put pressure on the Gold price to fall down towards the same level, where today started its fast uptrend. 20 DMA at 1911 is the level that bulls started their rally earlier today and it seems it is a strong support level there. On the other hand, USVIX also falling a bit which can decrease the Gold demand. However, as it is clear on the ground, the market risk still increasing and it cannot be positive news for the stock markets. Higher risk in the markets also still moving the liquidities to the more save assets, including Gold and US dollar. Therefore, if Gold still can hold itself above 1,911, which is so likely also, we can see the earlier records above 1,970 once again in the next few days. Technical indicators mostly remain bullish.
