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Forex Market Analysis: Precious Metal Trends 25 Jan 2024

January 24, 2024

Forex Daily Analysis: 25 Jan 2024

CURRENCIES:

Overview: Gold and Silver Struggle

  • Heavyweight US data releases anticipated later this week.
  • Latest Fed rate expectations indicate six quarter-point cuts this year.
  • Gold and Silver prices experience challenges, but the sell-off is contained.

US Rate Expectations: A Shift in Outlook

  • New assessment suggests six quarter-point cuts, with the first expected in May.
  • Contrast to the previous week, where seven cuts were forecasted, starting in March.
  • The UST 2-year daily yield rises from 4.14% to 4.40%, signaling a moderation in rate cut expectations.

Upcoming US Economic Data Releases

  • Three key releases scheduled for the week: US Q4 GDP on Thursday, Durable Goods report, and Core PCE report on Friday.
  • These releases closely monitored by the Fed in anticipation of next week’s FOMC meeting.

Gold Price Action and Trading Range

  • Gold currently trades within a $2,000/oz. – $2,040/oz. range.
  • Series of higher lows provide support, while price action around the 20- and 50-day moving averages remains uncertain.
  • Potential break lower could target prior support at $1,987/oz.

Retail Trader Sentiment for Gold

  • Retail trader data indicates 59.13% are net-long.
  • Changes show a 7.39% decrease in net long positions compared to yesterday.
  • Weekly changes indicate a 4% reduction in net long positions.

Silver’s Recovery and Chart Analysis

  • Silver rebounds today after a multi-week sell-off from late December.
  • Brief dip below $22/oz. on Monday, followed by a recovery, currently trading approximately 1.1% higher.
  • The cluster of lows around $20.71 from early October may face renewed pressure.

STOCK MARKET:

S&P 500 Soars to New Highs:

  • The S&P 500 (^GSPC) continues its record-setting rally, surging nearly 0.3% to achieve a new closing high of 4,864.61.
  • Nasdaq Composite (^IXIC) also gains momentum, rising 0.4%, while Dow Jones Industrial Average (^DJI) experiences a slight dip of about 0.2% following its breakthrough above 38,000 on Monday.

Sector Performances:

Winners:

  • Consumer Staples (XLP) and Communications Services (XLC) lead gains in the S&P 500.
  • Staples surge over 1%, with notable quarterly results from Procter & Gamble (PG) and Verizon (VZ).

Earnings Impact on Dow:

  • Dow faces a setback as 3M (MMM) drops over 10% due to a 2024 profit outlook below Wall Street’s expectations.

Earnings-Driven Moves:

Positive Outlook Lifts Airlines:

  • United Airlines (UAL) provides an optimistic 2024 profit forecast, boosting its shares by 5%.
  • Positive momentum extends to other airlines, including Delta (DAL) and American Airlines (AAL).

Tech Focus – Netflix (NFLX):

  • Netflix (NFLX) takes the spotlight with earnings reported after the bell.
  • The company announces a deal with TKO Group’s WWE (TKO), impacting TKO shares positively.

Ongoing Developments:

3M (MMM) Earnings Disappointment:

  • Dow affected by a more than 10% drop in 3M (MMM) shares due to a below-expectation 2024 profit outlook.

United Airlines (UAL) Resilience:

  • Despite warnings about the Boeing 737 Max 9 planes’ grounding impact, United Airlines (UAL) shares rise with an upbeat 2024 profit forecast.

Netflix (NFLX) Partnership:

  • Netflix (NFLX) strikes a deal with TKO Group’s WWE (TKO), leading to a nearly 15% rise in TKO shares.

Outlook and Market Dynamics:

  • Earnings in various sectors contribute significantly to market movements.
  • Ongoing focus on corporate America’s health and economic indicators.
  • Continued attention to tech-driven rallies and sector-specific earnings for market insights.

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