NASDAQ 100, GOLD PRICE FORECAST:

• Gold and the Nasdaq 100 current an unattractive risk-reward profile at this exact second following current U.S. financial information
• With U.S. inflation operating above the two.0% goal and the labor market showcasing distinctive resilience, Fed rhetoric may begin shifting in a extra hawkish course within the close to time period
• Fedspeak will likely be key within the close to time period

Most Learn: US Greenback Bid as Sticky CPI Poses Dilemma for Fed, Setups on EUR/USD, GBP/USD

Gold costs and the Nasdaq 100 may very well be in danger of a bigger downward correction following the newest set of shopper worth and unemployment claims figures launched on Thursday. Which means that new all-time highs for the dear steel and the know-how index could have to attend a bit longer.

On the inflation entrance, the December CPI report shocked to the upside, with the all-items index accelerating to three.4% from 3.1% prior. By way of labor market information, final week’s functions for jobless advantages sank to the bottom degree in three months, indicating that layoffs stay very restricted within the economic system.

US ECONOMIC DATA

Supply: DailyFX Financial Calendar

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With shopper costs comfortably above the Fed’s 2.0% goal and the job market showcasing distinctive resilience, the U.S. central financial institution will likely be reluctant to chop rates of interest sharply in 2024. This might shock markets given present expectations for about 135 foundation factors of easing for the 12 months.

Whereas Treasury yields moved decrease on the day, opposite to instinct, the pullback might not be associated to Thursday’s information, however maybe to safe-haven demand following stories that the U.S. and its allies could conduct airstrikes in opposition to Houthi rebels in Yemen.

Geopolitical dangers are all the time a wild card, however this example needs to be contained, that means no escalation right into a broader regional battle within the Center East. On that word, yields are prone to resume their advance as soon as the mud settles, however to get a greater sense of their trajectory, merchants ought to intently observe Fedspeak.

The next chart reveals current inflation developments for each the headline and core indicator.

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Supply: BLS

In mild of current occasions, merchants shouldn’t be shocked if Fed rhetoric begins to shift in a extra hawkish course, with policymakers pushing again in opposition to a fee reduce in March arguing that extra proof on disinflation is required to tug the set off. This may very well be fairly bearish for treasured metals and tech shares.

For the explanations outlined earlier than, the risk-reward profile for each gold and the Nasdaq 100 doesn’t look engaging at this exact second. Whereas the outlook may change with the introduction of recent data, merchants ought to train warning for now, avoiding blindly chasing suspicious rallies.

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