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EUR/USD clings to gains around 1.1200; focus is on US Midterms

EUR/USD clings to gains around 1.1200; focus is on US Midterms

EUR/USD looks to consolidate its daily gains, navigating around the 1.1200 region on Tuesday. The pair’s marginal advance comes on the back of the equally humble gains in the US Dollar, as investors remain cautious ahead of the US Midterm elections, with results expected to start emerging early on Wednesday in Europe.

GBP/USD extends the upside momentum past 1.3400

GBP/USD extends the upside momentum past 1.3400

GBP/USD adds to its ongoing multi-day positive streak, managing to reclaim the area beyond 1.3400 the figure on turnaround Tuesday. Indeed, Cable’s continuation of the uptrend follows the Greenback’s inconclusive price action as the US Midterm elections are under way, while bets for a rate hike by the BoE on Thursday also underpins the upbeat tone.

AUD/USD weakens to two-week lows near 0.6960

AUD/USD weakens to two-week lows near 0.6960

AUD/USD clinches its second consecutive daily pullback as market participants continue to assess the RBA’s rate hike earlier in the day. Indeed, the pair slipped back toward the 0.6960 zone, or multi-day troughs, following the less-hawkish-than-expected message from the RBA after it hiked the OCR by 25 bps, as widely anticipated.

Crypto Today: Bitcoin, Ethereum, XRP under pressure as investors pull capital

Crypto Today: Bitcoin, Ethereum, XRP under pressure as investors pull capital

Bitcoin trades downward at $76,566 on Tuesday, testing six-week lows. Ethereum, like Bitcoin, trades under pressure as it consolidates within a narrow support range. Meanwhile, Ripple hovers marginally above $1.25.

US Dollar Index edges up within range with midterm elections front and centre

US Dollar Index edges up within range with midterm elections front and centre

The US Dollar Index is picking up from session lows but remains within previous ranges, below 102.00. The Greenback is drawing support from hostilities in Iran and higher Oil prices, but US political uncertainty is capping gains.

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XAU/USD, GOLD

In the Forex market, Gold functions as a currency. The particularity of Gold is that it is traded against the United States Dollar (USD), with the internationally accepted code for gold being XAU. Known as a safe-haven asset, Gold is expected to appreciate in periods of market volatility and economic uncertainty. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
The XAU/USD pair tells the trader how many US Dollars are needed to purchase one troy ounce of Gold.

HISTORIC HIGHS AND LOWS FOR XAU/USD

  • All-time records: Max: $2,790.11 on 25/10/2024 – Min: $34.78 on 27/01/1970
  • Last 5 years: Max: $2,790.11 on 25/10/2024 – Min: $1,451.32 on 13/03/2020

* Data as of December 2024

ASSETS THAT INFLUENCE XAU/USD THE MOST

  • Currencies: The US Dollar (USD) and the Euro (EUR) are the primary currencies influencing Gold prices. Other important currency pairs include EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD, and USD/CAD.
  • Commodities: Silver and Gold are the most important precious metal commodities.
  • Bonds: Influential fixed-income securities include the German Bund (a federal government-issued bond) and the US Treasury Note (T-Note).
  • Indices: Key indices related to Gold and mining include the HUI (NYSE Arca Gold BUGS), the XAU (Philadelphia Gold and Silver Index) and the GDM (NYSE Arca Gold Miners Index).
  • Exchanges: The most important stock exchanges for Gold are the New York Mercantile Exchange (COMEX), the Chicago Board of Trade, the Euronext/LIFFE, the London Bullion Market, the Tokyo Commodity Exchange, the Bolsa der Mercadorias e Futuros and the Korea Futures Exchange.

INFLUENTIAL ORGANIZATIONS FOR THE XAU/USD

  • WGC (World Gold Council) is the market development organization for the Gold industry. Its aim is to stimulate and sustain demand for the precious metal.
  • LBMA (London Bullion Market Association) is an organization whose members participate in this wholesale over-the-counter market for trading Gold and Silver. It is loosely overseen by the Bank of England. Most LBMA members are major international banks, bullion dealers, and refiners.
  • COMEX (Commodity Exchange) is the primary market for trading metals. The COMEX merged with the New York Mercantile Exchange (NYMEX) in 1994 and joined the CME Group in 2008.
  • CGSE (Chinese Gold and Silver Exchange Society). It is an organization of Gold trading firms in Hong Kong that are participants of the Chinese Gold and Silver Exchange, the first exchange in Hong Kong.
  • Central banks like the Federal Reserve (Fed), the European Central Bank (ECB) or the People’s Bank of China (PBoC) significantly influence Gold prices through their monetary policies.

INFLUENTIAL PEOPLE FOR THE XAU/USD

  • Neal Froneman, the World Gold Council’s Chairman.
  • Scott Bessent, the US Treasury Secretary.
  • Xi Jinping, President of the People's Republic of China.
  • The London Bullion Market Association members.

CIRCUMSTANCES THAT INFLUENCE XAU/USD THE MOST

  • Demand and supply: The balance between global Gold demand and its availability impacts its price.
  • Economic uncertainty and currency devaluation: Gold is widely known as a safe-haven asset for investors in periods of economic uncertainty or when a currency faces devaluation.
  • Practical applications: The use of Gold in technology innovations, jewelry manufacturing and other industrial applications.