Market Snapshot – Markets Begin to Stabilise

Markets Stable

The markets have been able to stabilise over the last 24 hours as the improvement of the situation in Italy and Germany has helped the markets to consolidate and range. We saw the release of the ADP and the GDP data from the US yesterday but both these pieces of data came out to be weaker than what was expected by the markets. This has continued the trend of weak data from the US which we have been seeing over the last few weeks and it puts in doubt the pace of the rate hikes from the Fed in the following months. The Fed seems to be in a mood to hike the rates atleast 2 more times during the course of the year but they would need ome cooperation from the incoming data so that it can support their decisions in the upcoming period.

Gold Struggles

The gold prices have been struggling to break higher and this was the case yesterday and this has been the case for today as well. The broken support turned resistance around the $1305 region has been acting as a ceiling for the gold prices over the last few days and this is something that is understandable as the market had taken so long for the prices to crash through the support and hence now we are seeing a lot of selling in this region. We do not believe that the market has enough momentum as yet to break back through the lows and we believe that this move higher is only a correction of the fall through the support region and we should see the prices going back lower in the days to come. Till the market makes up its mind, it is better to wait and watch the price action in the short term and then decide.