After the parabolic rise of recent days, gold experienced a very pronounced correction yesterday. From the intraday high of $5,626, it moved dynamically downward to the area around $5,200. The price is currently consolidating exactly there (spot & futures between approx. $5,180–5,230), after yesterday's Fed meeting (no further rate cut, dampened expectations for future steps) initially triggered selling pressure.
Silver behaves similarly: Here too there was a sharp correction from the all-time high of around $120 to the zone just above $100. The price is currently finding support here. Both precious metals are showing a clear consolidation phase after the previous overbought condition.
USD stabilizes for now
The US Dollar Index (DXY) experienced a slight stabilization yesterday and this morning. It is currently trading at around 96.50 and shows a support zone around 96.20–96.30. Against the EUR (EUR/USD ~1.19), GBP and Yen, the dollar has partially made up for yesterday's losses – the basic tendency remains weak, however.
This afternoon (14:30 CET) the US Producer Price Index (PPI) data is expected, which could provide clues about inflation developments in the US. If they come in lower than expected, hopes for a further rate cut could strengthen again and provide an impulse for precious metals prices. A higher reading could, however, have the opposite effect, but would probably support the USD.
Indices under pressure – slight recovery
The major US indices (S&P 500, Nasdaq, Dow) were initially clearly in the red yesterday evening and overnight (–0.8 to –1.5 % after the Fed). In the morning there is a partial recovery: Pre-market the S&P 500 is again nearly unchanged to slightly positive, Nasdaq and Dow also somewhat firmer. Nevertheless, sentiment remains fragile – a PPI (Producer Price Index) suggesting a decline in inflation could improve sentiment and give the stock market at least limited support.
In Europe, the indices are initially friendly after market open on the last trading day of the week. The DAX is currently (10:00 CET) showing a gain of around 0.89 % and the Euro Stoxx 50 a gain of 0.65 %.
Conclusion
The entire market continues to show high nervousness. Gold and silver correct sharply, the dollar stabilizes for now, and the indices oscillate between pressure and slight recovery. Any new impulse (this afternoon the PPI data) can lead to significant swings up or down. There is currently a kind of „holding pattern“ – the direction will probably only become clear with the next important data points.
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