Precious metals like gold and silver prices extended declines in early trading on Friday. The strong bearish sentiment fueled by fed Chairman Jerome Powell's hawkish stance on Wednesday encouraged dollar bulls and pressured metal prices lower. As of this writing, gold price trades below the support of $1800 and silver price has already broken below the $20 psychological support area.
European and UK shares started the fresh month on a bearish note driven by weak economic data and an escalating risk of a global recession. Meanwhile, the US futures slightly recovered from the early session losses, and focus shifted to the US manufacturing data which is set to be released later today.
Crude oil futures rebounded while the overall momentum remains bearish. While the OPEC+ ended its meeting yesterday with an agreement to boost production by 648,000 bpd in August. On the other hand, the oil investors are closely monitoring US President Biden’s trip to Saudi Arabia to increase supplies further.
In the currency market, the dollar index, which gauges the greenback's strength against a basket of six currencies remains in favour as a safe haven currency owing to the high level of uncertainty in financial markets. The Australian dollar fell back below 0.6800 as commodity prices reversed and as global investors repositioned for higher US interest rates.
The precious metal stays below the $1800 psychological level ahead of the US ISM manufacturing report. The metal dips to a fresh weekly low of $1794 on Friday weighed down by the prospect of higher interest rates.
On the data front, the personal consumption expenditure price index in the United States increased 0.6% month-over-month in May of 2022, higher than 0.2% in April. The US weekly jobless claims decreased by 2K to 231K in the week that ended June 25th, compared with market forecasts of 228K.
Going into the US session we have the ISM manufacturing PMI report, the report calculates a manufacturing activity-based survey conducted every month by the Institute for Supply Management (ISM) of purchasing managers from more than 300 manufacturing companies.
Worldwide, more than 543 million people have been confirmed infected and more than 6.3 million have died. The United States has confirmed over 86.9 million cases and has had more than 1015,200 deaths from COVID-19, the highest total in the world.
Technical Outlook and Review
EURUSD: The pair broke to below 1.0400 on Thursday. The next immediate support sitting around 1.0370 and 1.0350. On the other side, a break above 1.0500 will open 1.0550 and 1.0580.
The important levels to watch for today: Support- 1.0400 and 1.0350 Resistance- 1.0500 and 1.0550.
GOLD: The precious metal remains under pressure a clear breakdown of the support at $1790 could open space for further declines while only a recovery to $1,830 would reverse the short-term negative trend.
The important levels to watch for today: Support- 1790 and 1785 Resistance- 1800 and 1812.
Quote of the day - Volatility is greatest at turning points, diminishing as a new trend becomes established – George Soros.