Market Focus: Gold Soars Amid Anticipated Chinese Fiscal Stimulus

During the Asian session, the U.S. Dollar Index (DXY) remained relatively stable, hovering above 102.80 as no major economic data releases were released. Spot gold prices rose significantly, climbing from $2,630/oz to as high as $2,646/oz by midday, as expectations grew for Chinese fiscal stimulus measures over the weekend. Crude oil prices also remained elevated, with West Texas Intermediate (WTI) oil poised to secure its second consecutive weekly gain. Contributing factors include Hurricane Milton’s landfall in Florida, escalating geopolitical tensions between Israel and Iran, and demand concerns in the U.S. and China.

What Does It Mean for the Europe & U.S. Sessions?

The U.K.’s GDP growth has been lackluster recently, with the economy stagnating in June and July. However, the forecast for August suggests a 0.2% increase, which could boost the British Pound (GBP). Meanwhile, Canada’s labor market shows signs of recovery, with 22.1K jobs added in August and a projected 29.8K for September. However, rising unemployment rates may weigh the Canadian Dollar (CAD). In the U.S., attention will be paid to the Producer Price Index (PPI) data, which could significantly impact the U.S. dollar’s performance later today.

The Dollar Index (DXY)

• Key Event: U.S. PPI Data (12:30 PM GMT)

After Thursday’s higher-than-expected Consumer Price Index (CPI) data, all eyes are on today’s PPI release. A hotter-than-expected reading could reignite inflationary concerns and lead to renewed strength for the U.S. dollar later in the day.

Gold (XAU)

• Key Event: U.S. PPI Data (12:30 PM GMT)

Gold saw a strong rally during the Asia session, and further movement will likely depend on the U.S. PPI data. If inflation pressures in the U.S. remain elevated, gold could see additional gains as it benefits from its safe-haven status.

Australian Dollar (AUD)

With no significant economic releases expected today, the Australian dollar (AUD) remains also range-bound, trading between 0.6710 and 0.6740. The currency will likely stay within these levels, barring unexpected news or global market shifts.

Kiwi Dollar (NZD)

Similarly, the New Zealand dollar (NZD) has remained stable after its sharp decline earlier this week. The currency has rebounded to around 0.6090, with support at 0.6050 and resistance at 0.6150 for today.

Japanese Yen (JPY)

Demand for the U.S. dollar has kept USD/JPY above the 148 mark. The currency pair was trading around 148.60 during the Asian session and could continue to climb if U.S. inflation data later today supports a stronger dollar.

Market Focus: Gold Soars Amid Anticipated Chinese Fiscal Stimulus

Euro (EUR)

The Euro dipped to a low of 1.0900 overnight but has since recovered to trade near 1.0940 as the Asian session concluded. Since the Eurozone has no significant data releases today, analysts expect the currency to remain between 1.0895 and 1.0995.

Swiss Franc (CHF)

The USD/CHF pair saw a slight dip overnight but stabilized around 0.8550 as the Asian session unfolded. Traders expect the pair to face support at 0.8530 and resistance at 0.8630.

Pound (GBP)

The August U.K. GDP release showed a forecasted rebound of 0.2%, which could lift the British Pound. However, broader concerns about the health of the U.K. economy remain, particularly in light of stagnant activity in key sectors.

Canadian Dollar (CAD)

Canada’s labor market report, due at 12:30 PM GMT, is expected to show a second consecutive month of job gains. However, with unemployment increasing, the Canadian Dollar could face downward pressure if the labor market softens more than anticipated.

Oil Prices

Crude oil prices remain volatile, driven by factors such as Hurricane Milton, heightened geopolitical tensions, and demand concerns from the U.S. and China. WTI oil surged above $76 per barrel on Thursday but has since pulled back slightly. Expect high volatility as the trading week comes to a close.

Summary of Market Biases for the Next 24 Hours

• DXY: Weak Bearish
• Gold (XAU): Weak Bullish
• AUD: Weak Bullish
• NZD: Weak Bullish
• JPY: Weak Bearish
• EUR: Weak Bullish
• CHF: Weak Bearish
• GBP: Weak Bullish
• CAD: Medium Bullish
• Oil: Weak Bullish

Markets will likely remain volatile ahead of key data releases, with significant movements expected depending on inflation figures and labor market data from major economies.

Stay Updated with the Latest Market News. Visit our YouTube Channel for the Latest Forex Analysis.