Gold recovers from monthly low amid lackluster markets ahead of US CPI

Traders remain sidelined as anxiety ahead of the US inflation escalates on the key Tuesday. Not only the US CPI but GDP data from Japan and Eurozone, as well as the UK’s employment report, also decorates today’s economic calendar. 

The pre-event anxiety joins downbeat US Treasury bond yields to weigh on the US Dollar, which in turn allowed major commodities and Antipodeans to remain firmer. That said, Gold recovers from a five-week low but Crude oil buyers struggle amid mixed fundamentals. 

Further, GBPUSD cheers mostly upbeat UK jobs data while USDJPY bears benefit from better-than-forecast Japan GDP and Ueda’s nomination for the BoJ Governor’s post. Additionally, NZDUSD drops despite the softer US Dollar as RBNZ inflation expectations recede.

On a different page, BTCUSD and ETHUSD remain sluggish after bouncing off multi-day low as hopes of more participation contrast with the regulatory fears.

Following are the latest moves of the key assets:

• Brent oil snaps two-day downtrend but prints mild gains above $86.00.
• Gold rebounds from five-week low to mark the biggest intraday gains since February 01, up 0.30% near $1,860 at the latest.
• USD Index drops for the second consecutive day as bears flirt with 103.00.
• Wall Street closed on the positive and favored mild gains of the equities in the Asia-Pacific region, as well as the shares in Europe and the UK.
• BTCUSD and ETHUSD both appear indecisive near $21,800 and $1,530.

A nail-biting day!

The downbeat US Dollar joins softer yields and mostly positive data from Japan and the UK to underpin cautious optimism during early Tuesday. However, a divergence between the market’s “positive surprise” expectations from the US CPI and downbeat clues of US inflation restrict the trading momentum. Elsewhere, the US-China tussles are back to the table as American politicians push for investigations of the balloon over alleged spying attempts from Beijing. It should be noted that the central bankers across the board have recently turned cautious and highlighted incoming data as a source of the next move, which in turn amplifies today’s data and increases the market’s cautious mood.

Gold, however, ignores the market’s inaction and manages to lure buyers from the monthly low, mostly amid softer USD and yields. The GBPUSD pair, however, struggles to defend the UK data-led rise as traders brace for the key US statistics. Crude oil also remains mildly bid but bears stay hopeful as the US keeps releasing strategic oil reserves to supersede Russia-linked output crunch.

Cryptocurrencies aren’t away from the financial planet and remain sluggish even as whales appear piling up longs at lower levels even as fears of harsh regulations loom.

• Strong buy: USDJPY
• Strong sell: ETHUSD, GBPUSD
• Buy: USD Index, USDCAD, Nasdaq, EURUSD
• Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

US CPI is the key

Although the Eurozone GDP is also left for publishing, traders place their eyes on the US CPI for January amid policy pivot fears and recently hawkish market bets. It’s worth observing that the inflation data generally prints higher numbers during the early year and hence hopes of positive surprise also keep the traders on the dicey floor, which if met could recall the US Dollar buyers while exerting downside pressure on the riskier assets.

May the trading luck be with you!